Part 2: The changing affiliate landscape
Affiliation is becoming harder and
more competitive so a sale is in a
lot of minds when building their
businesses
Claire Wellard, iGamingXL
commentator on affiliate matters,
suggests a simple, notional
diagrammatic for the existing
online gambling affiliate-marketing
ecosystem.
“I think of affiliate marketing as an
ecosystem with huge players at the
top of the pyramid, such as Catena
and XL Media, and then a massive,
long tail of people working out of
their bedrooms,” he says.
This top-heavy arrangement
represents a relatively new structure,
and one which Raketech’s Michael
Holmberg suggests is a trickier
landscape for the smaller one-man-
bands to negotiate.
“The sector is entering a new
phase, becoming more mature and,
therefore, stabilising,” he says. “Today
it is harder than ever for new and
inexperienced affiliates to establish
themselves on the market. New start-
ups require more competence, greater
resources, a better understanding of
the industry, legal advice and simply
more luck in the market.
“In order to be successful,
affiliates will need to build a good
brand and provide users with the
best product, and not just buy
everyone else to grow via M&A. Now
it is quality over quantity.”
be to act like a scythe on the smaller
affiliates, accelerating the lifecycle
for smaller players.
“Many either won’t or cannot
market within the compliance
guidelines that are being set,”
says Sims. “The isolating of
programmes and the closing of
sites is becoming more common.
There has always been churn
but the number of sites we are
seeing disappear one month to the
next is quite stunning compared
with what it used to be. Around
5-10% of the sites we see month-
on-month are either changing
dramatically or disappearing.”
This is Darwinian theory in
action, he adds. “It’s about
surviving the compliance landscape
and those that come out the other
side, that prove they are compliant,
will have the trust of the operators.
It is fairly hard to display a good
amount of T&Cs on a mobile
screen without it looking pretty
ugly. Some affiliates will find this
tougher than others
Gavin Walters, Gambling.com
Go pro
The strong possibility is that the net
effect of the regulatory squeeze will
12
Once they have that, they will be
among a small band of affiliates
that will have some power, in a
niche way.”
The effect of the regulatory
squeeze and the drive towards M&A
has “professionalised” the affiliate
sector, according to Søgaard. “It has
definitely been a wake-up call for
the industry. The larger affiliates who
have had the resources to navigate
the regulations have definitely
reaped the benefits.”
Resources is the vital factor.
Compliance costs money, while also
being a distraction. This in itself
might be seen as an opportunity,
suggests Feda Mecan, founder
and chief executive at KaFe Rocks.
“Compliance takes time and effort
but it also pushes away some other
affiliates or keeps the big guys
busy and not focused sometimes,”
he says. “Change can also be seen
as a chance to enter a market or to
make a more aggressive push but it
still makes the entry more difficult
and expensive for new players.”
Walters at Gambling.com makes
the not insignificant point that
just ensuring a website properly
displays the necessary compliance
information within many
jurisdictions takes an effort that
might be beyond some.
“Other than extra manual work,
the real impact of the changes
Under pressure: Regulation and the evolution of affiliate marketing