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Affiliate Monitor Three questions for the affiliate sector in 2022
competitors . For instance , in the third quarter results , mention was made of its US positioning through wsn . com and casinotopsonline . com , but this is merely a bridgehead compared with the progress being made in North America by Catena , Better Collective , and now Raketech and Gambling . com .
The most obvious route would be to dispose of the business . There are arguably not enough synergies between the provision of sports betting and igaming platfoms and the affiliate arm . Cash that might be used to finance M & A on the affiliate side might be better deployed on the platform side . Back in 2020 , GiG shed its B2C arm as part of a strategic review that was all about “[ freeing ] up resources ” in order to concentrate on its B2B business .
The harder question to answer is what GiG would do without the media services revenues and more particularly the profit that the affiliate business brings to the group . Of total EBITDA of € 5.3m in the third quarter , € 5.1m came from the affiliate business . The question previously was how the business could unhook itself from its profit centre but with the Sportnco acquisition , perhaps it has provided itself with something of an answer . It leaves the company free to look at the offers on the table for an operationally efficient and profitable affiliate business
Of total EBITDA of € 5.3m in the third quarter , € 5.1m came from GiG ’ s affiliate business
with US optionality . That is a tasty proposition for any business in the sector .
CAN THE US AFFILIATE INDUSTRY PERSUADE OPERATORS ABOUT REVENUE SHARE ?
To date , there has been little said by the firms making material revenues from the regulated US market about the extent to which their business there is based on cost per acquisition ( CPA ) as opposed to ( the much preferred in Europe and elsewhere ) revenueshare model .
This reasons for this are twofold . First , the affiliate gets the full benefit almost instantly from the sugar rush of new state openings . As much was clear in the third quarter where both Catena Media and Better Collective noted the extent to which their figures had been boosted by the launch of Arizona in September . As the latter company noted , combined with the start of the NFL season , the sudden rush of customers from the
newly opened market in Arizona meant that the month contributed over 60 % of total quarterly revenues from the US .
Second , both Catena and Better Collective have noted previously that operators in the US prefer CPA deals . The thinking is that they want quick results and are less willing than their European peers to share the long-term value . Potentially , this is down to the operators not being entirely sure about lifetime values and not wanting to give away too much . By comparison , European operators have a much clearer picture of the economics of each individual customer and the value that can be had from the high-intent traffic they receive via affiliates .
But that might change over time . As operators gain a greater understanding of the value of the customers coming through their doors , they might well look at longer-term deals with the affiliates they are working alongside .
iGB Affiliate Monitor February 2022