INSIGHT
FIXING THE
AFFILIATE CHANNEL
Dominated by a small number of winners who call the shots, the affiliate ecosystem simply doesn’t work
for the vast majority of affiliates, according to 90 Digital CEO and founder of Oshi Bitcoin Casino,
Nick Garner, who explains what he thinks is broken and how it can potentially be fixed.
I WANT TO talk about something quite
personal to me: the affiliate ecosystem and
how broken it is.
If you don’t know my story, I was search
manager at Betfair from 2006 to 2010 and
then head of search for Unibet between
2010 and 2012, then I set up my own SEO
agency 90 Digital and now I’ve launched
a bitcoin casino: Oshi.io. During all these
years, I’ve been an affiliate and now I’ve
become a ‘white label’ operator as well.
Something, in my view, is very wrong
in the affiliate channel and I’m trying to
do something about it. In this article I’ll
explain what I think is broken and what I
want to do to help fix it.
In the years I worked in-house, being the
SEO guy, I constantly ended up working
alongside the affiliate management teams
helping out whenever I could. The reality
was that time after time, I tried to help
the affiliate marketing teams think in a
different way, using better processes and
data to find winning affiliates but somehow,
it all ended rolling back to the usual
haggling over commission with a handful
of elite affiliates.
Of course, broadly speaking the affiliate
ecosystem does “kind of ” work, but there
are so many weaknesses.
To address this, let’s start off by looking
at the affiliate ecosystem.
The affiliate ecosystem
●●The
numbers
If you’re a fairly large operator, you
will probably have between 10,000 and
15,000 affiliates on your books. There will
probably be four or five affiliate managers
looking after these people.
Generally, out of 15,000 affiliates,
around 200 will produce OK monthly
revenue to the operator. 50 will make a
living, 20 will do pretty well and five will be
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iGB Affiliate Issue 52 AUG/SEP 2015
living the dream.
So in reality, there is a 0.03% chance of
being one of those guys driving a Ferrari,
living in the Caribbean and set up for life.
By the way, that’s not a 3% chance, that
is 3% of 1% chance. It’s tiny.
●●Let’s throw buckets of mud
Operators generally work to the “throw
mud against the wall and see what sticks”
principle. In this case, it’s equivalent to
throwing hundred buckets of mud and one
little patch sticking.
To the operator, they will have a queue
of 15,000 people. If one falls over, there’s
another one in the line. Brutal as it is, that’s
how it works. Operators don’t care who is
in the line, as long as they are delivering
good customers.
If you are at the front of the line and a
performer, every operator wants to be your
best friend.
●●Why all the ‘free lunches’?
If you’ve ever wondered why corporate
hospitality is such a big deal in affiliate
marketing, it’s economics. If you look at
the Tier 1 and 2 operators, their offerings
are much the same and customer service
is more or less comparable and retention
strategies are similar, therefore revenues
will be similar per active player.
The only difference will be marketing
and brand differentiation, leading to greater
volumes of converting customers. That’s
why in many ways iGaming is really a
marketing business.
When an affiliate knows there isn’t much
between one operator or another, they
have to take a punt on who will give them
the best conversions and lifetime revenue.
Therefore the question for affiliates
is “which operator gets me the most
conversions?’
As an affiliate, how do I know who is
going to get me the most conversions? All
I can do is work off some very intangible
signals such as who is doing TV, the brands
other successful affiliates working with,
whether they are likely to cut me a good
deal, or if I like the affiliate manager.
●●Ignorance
Because affiliates can only rely on their
own data to say whether one operator is
better than another and because that data is
often very limited, how do you know who
to choose?
Therefore the affiliate ecosystem absorbs
managers who are likeable, can have
“lunch” and cut deals on commissions. Of
course, if you’re an affiliate manager you
will say “I do more than this”, and I’m sure
you do…
Affiliate managers are online marketers.
It’s just that online marketing is a big
subject and I constantly see them with blind
spots that affect their performance.
I’ll give you a little example.
Affiliate managers constantly complain
about not being able to find really high
performing affiliates. So here’s a trick to
help you if you’re on the operator side. I’m
going to get slightly technical here, so I will
keep this short.
Use SEMrush and Majestic (set up the
accounts needed)
1. pick an operator you benchmark against,
maybe it’s Bet365
2. find a banner on an affiliate site to your
target operator
3. use a redirection checker to see where
the banner ad is pointing to
4. go to majestic.com (a link checking tool),
download links to the subfolder or sub
domain you found in the redirection tool
5. pivot table the data and extract your list
of domains which have affiliate banners
going to your target site
6. go to 90Digital.com and download data
grabber