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Affiliate Monitor A sector in flux
A sector in flux
● Where are we right now ? ● Bigger fish ● Intensity ● Roll up , roll up
PART ONE
WHERE ARE WE RIGHT NOW ?
There can be little doubt that the affiliate sector has been transformed by the emergence of the US sports betting and , to a lesser extent , igaming opportunity . It has shone a spotlight on the role played by affiliates in the intense promotional battle wagered over the past couple of years and pushed them front and centre in the debate about the sustainability of the level of marketing spend that has been building recently .
As Tom Waterhouse , chairman of his eponymous VC house says : “ Affiliates are often characterised as a ‘ necessary evil ’ in many industries , as they can be an effective acquisition channel , but come at the cost of control .”
In a recent note to investors , he added : “ In mature markets like Europe and Australia , affiliate marketing is not a growing revenue opportunity . Consequently , we are currently focused on affiliates that are well-positioned to grow in the burgeoning US market .”
He says that affiliates are “ well-positioned ” to benefit from what might well be considered a pivot towards more viable routes to market in the US .
It certainly helps to explain the focus of the leading affiliate providers . From Better Collective to Raketech , via Catena Media and new kids on the block Playmaker and American Affiliate ( part of FansUnite ) the
US is now at the forefront of their thinking and strategic initiatives .
In putting the case for investing in Better Collective , Waterhouse says that niche audiences in each US state will be “ particularly valuable assets in future M & A activity once the US market matures ”.
“ We are confident that targeted media channels , such as podcasts , newsletters and radio shows , will be crucial acquisition tools for operators looking to develop niche audiences ,” he added .
BIGGER FISH
Another investor in companies within the affiliate space is Denmark-based hedge fund Symmetry Invest and in a recent note on the affiliate sector , the fund managers made their case for looking at the space in similar terms to Waterhouse .
“ The period from 2015 to 2018 saw a heavy consolidation phase within the industry as some of the bigger players started to roll up other sites and brands ,” they said . This led to the landscape we see today – and which we write about a little later – with a handful of ‘ big ’ iGB Affiliate Monitor