INSIGHT
This symbiotic relationship is one that affiliates and operators can benefit from. At AffiliateFEST, we explore these relationships and help managers to really understand who they work with. There’ s no need to end affiliate programmes, but rather a need to implement effective management and training now becomes increasingly important.
The future of the affiliate channel The closure of the Sky Bet affiliate programme has caused a flurry of activity from affiliates as they attempt to gauge and prepare for the future changes that may affect their businesses. It almost created panic, but affiliates are assured that they will still be highly valued in the sales and conversion funnel simply because of the nature of this industry and the education chain required to convert a customer online. This channel is still important for a multitude of operators, because they’ ve invested heavily in it and it brings in a high proportion of the acquisition traffic that they see.
For most operators, it’ s impossible to provide the same kind of content and visibility that they get from their affiliates. It’ s safe to say that the ecosystem for affiliates is changing, but they won’ t likely ever become redundant, because operators just can’ t work on that same scale. Affiliates have their own audiences that are often much bigger than what one single brand can boast, making them key to attracting new players.
The very structure of affiliate marketing is beneficial for the operator, there’ s no upfront cost and they offer vast amounts of exposure. These brands can be global and allow the operator to access a new market, having to pay only when they get those first time deposits. Compare this to other paid advertising models and you will see why this is such a cost-effective solution for these operators. They could easily spend thousands acquiring new visitors through PPC or paid social campaigns, but there’ s no guarantee they’ ll deposit and the operator must still pay out. For this reason, affiliate marketing will always be valuable to operators, regardless of their size. thoroughly, because they have to find new ways to succeed in an already crowded market, building not only traffic sources but a brand, community or customer base that takes up a service only they can provide.
For operators, super affiliates present a bit of a problem, because they can dictate terms. With one company owning so many of the largest channels, they are in a position of power over the operator and enjoy a natural monopoly of traffic. Larger portals don’ t always promise the greatest results but they have volume.
However, this means that smaller affiliates very much still have the ability to take on the big dogs because they can innovate and move quicker than a conglomerate. The ones that succeed are the ones that create their own niche and provide a real service to the consumer to form a valuable place in the sales funnel.
Many affiliates are now choosing to acquire or launch their own operator brands. This is a natural step for them, because they have traffic and know how to make it work for them. By doing so, they’ re getting the full cut of the deposits, without having to skim from the top of an operator brand. Affiliates have a great general knowledge base to build on their own brand, although there are also challenges to be faced here too.
Buying up brands can be advantageous, but there is caution required too. As we’ ve seen with past mergers, new leadership isn’ t always good leadership and the market adjusts accordingly. Users come to know a brand for certain properties, such as good content or honest reviews, and if a change of ownership changes this then users will be less engaged.
“ Smaller affiliates very much still have the ability to take on the big dogs because they can innovate and move quicker than a conglomerate”
Figure 2: What drives affiliates to promote particular brands
Changes to the affiliate-manager role Affiliates are moving into a new sales space in which they don’ t just bring in new players but also get more value from existing ones via retention offers. Often, affiliates can be much more effective than an operator with their retention strategy, because they are able to frame the offer in a different way.
They’ re able to build their brands and benefit from new traffic sources, not just SEO. With the world of search and web design changing at a dizzying pace, affiliates can create brands and sites that do more and sell more. Affiliates need to wear many hats
Mergers and acquisitions The landscape is already changing for affiliates, with a major shift towards mergers and acquisitions that make the big affiliates even bigger. These super affiliates are taking up a larger market share, but there’ s still room for the smaller ones.
The opportunities that exist for smaller affiliates need to be assessed more
56 iGB Affiliate Issue 65 OCT / NOV 2017