FEATURE
“ African customers do not seem to need to be incentivised by headline, high-value bonuses”
What are the main differences with established markets such as the UK, and how do you address these? Operators always need to offer good value odds because no matter where you are in the world, a customer who is considering taking a risk on a bet will intrinsically assess the value of taking that risk( or not).
Despite similarities between African and non-African markets, there are also a lot of differences. It is also hard to generalise Africa as a whole, because Africa is so diverse. For example, betting terminology varies between countries, and even within countries. What we might call an“ acca” or“ accumulator” in the UK, might be termed a“ bet bundle” in Nigeria, a“ multiple” in other countries, or something entirely different in a local dialect in Kenya.
Payment methods are largely different in most African countries than in established markets like the UK. As mentioned earlier, in Kenya the M-Pesa payment method is very commonly accepted and trusted( mobile penetration in Kenya is 90 % yet less than half that section of the population even have bank accounts). In other countries players may be familiar with card transactions or bank transfers, whereas in the UK it is commonly accepted that every customer will have a debit or credit card that will facilitate their deposit. When marketing to Africa you have to understand how people transact, and what methods they trust and commonly use. You cannot just refer players to an operator without explaining how they can deposit and bet, unlike the UK where you can take it for granted that every referred customer is likely to have a debit or credit card or bank account.
Player incentives in Africa are less common than in established markets like the UK, so at first sight it might seem difficult as an advertiser or affiliate to attract customers and convert them. However, because acquisition offers are not that common, nor high value where they do exist, African customers do not seem to need to be incentivised by headline, high-value bonuses. It is probably more important to an African player to understand that their money can be trusted online with an operator and that if they win they are going to be paid out in a timely manner.
The way Africans bet, and the reasons why they bet, also appear to differ from established markets like the UK. In general Africans prefer small stakes bets on large multiples that might return very high winnings. It is not uncommon to see 20-fold multiple bets or more, as customers seek to hit a massive life changing return from a small stake. Many African operators therefore promote their own“ jackpot” games whereby for a small stake the customer can predict the outcomes of a number of games and potentially win a massive amount of money, not too dissimilar to the football pools that were very popular in the United Kingdom in the 1980s( and still exist).
Because of the nature of small stakes-high odds betting, the margins in Africa are very good. Profit margins greater than 25 % are not unheard of. In established markets like the UK, most operators are working on sportsbook margins of less than 10 % due to how competitive they need to be in setting odds and providing big headline acquisition offers that will attract customers in an increasingly saturated market.
How do you see the outlook for affiliates and the wider sector in the African region? The outlook for both operators and affiliates in Africa can be seen two ways. On the face of it Africa is a very lucrative and untapped market when it comes to online betting, hence the number of operators emerging in countries like Kenya and Nigeria in recent months.
However, with growth in any industry comes regulation and attention of governments and authorities. Regulation could make operating in some African countries unsustainable for a lot of operators and has already done so in some due to unsustainable taxes being levied on betting activities. Africa needs to remain open for business when it comes to online gaming if it is to succeed.
Conversion will continue to be poor until operators can find local payment methods that work for their customers. It is not just about finding the right payment methods that work. Agreeing commercial deals with the right payment providers and getting these payment methods in place can be a long, bureaucratic and sometimes expensive process. That said, if operators in areas like Nigeria can solve the issues around payments methods, then this will make the large untapped volume of registrations that today are going unconverted more accessible.
Competition will also shape the future of many African markets. The number of online operators in Kenya for example has rocketed in the past 12 months, and mainstay operators like Sportpesa may increasingly find their market share threatened by new operators, many of which are growing their market share via their own affiliate programs. Competition may also come from some of the big European brands entering the African market in a serious way. Some of these brands have always accepted African players, but if they make a concerted effort to target African
“ Because of the nature of small stakes-high odds betting in Africa, profit margins of greater than 25 % are not unheard of” players through the addition of local payment methods and betting in local currencies then this will further erode the market shares of local operators.
Africa is an exciting prospect, but as with all emerging markets only time will tell whether positive change will help this market grow, or whether negative changes will cause it to stagnate and become less lucrative.
42 iGB Affiliate Issue 63 JUN / JUL 2017