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IN-DEPTH 16 December 2015
Saturation strategies
With certain online gaming markets becoming increasingly mature, Ed Hawkins considers how affiliates can overcome the challenges presented by saturated regions
By Ed Hawkins

We all know how the affiliate model works. Entrepreneurial folks, some individual, others collective, whack up some gaming-related content, draw the hits and then impress the operators and other sorts with bigger bank balances to advertise, taking a percentage of revenue from any readers or users they send their way. Bingo. It is a tantalising way to make money. Some of it big. Indeed, it seems so stress free that it could be considered that everyone has tried to do it, or trying to do it. That has led to a saturated market. Or, to put it in a less scary way: ‘mature’. So how has the affiliate industry changed and adapted?

Most of us have heard whispers or tales. Is it true that affiliates are now getting more favourable arrangements? Either way something must be changing, as otherwise there would be no sustainable affiliate market in places like the UK or other saturated, sorry, 'mature' online markets. Nobody would be making any money. Shudder.

A good brain to quiz from the off is that of Simon Jones. Jones is the commercial director of Focus Online Management. Focus Online utilises a combination of bingo portals, free bingo games and awards sites to focus entirely on the bingo world – hence the earlier bingo reference – and claims to have been market leaders in the field for more than ten years. Its aim is to deliver high quality bingo players to clients – brands which include WhichBingo.co.uk and LiveFreeBingo.com – and partners, by listening to their needs and requirements and then tailoring the efforts of its team of experts to ensure that those needs are met.

Jones admits that the market is highly competitive but insists there is room for growth. Cue a big sigh of relief all round. Innovation is the key, he says. “Considering the ever increasing cost of paying for advertising on networks like Facebook let alone Google, with cost per click fees reaching epic proportions for top level keywords, there’s still an opportunity for affiliates to differentiate themselves from the competition.

“As a specialist online bingo affiliate, we have taken big steps in the last year or so to differentiate from the competition. For example, in 2014 we took a massive leap of faith to take our bingo awards from being an online-only player vote to a full event in London with a specialist judging panel in 2015, together with an entertainment programme and evening of industry networking. This brought its own added expense and headache of organising but it actually pays dividends in the long term by showing the industry that we can lead the way with an innovative awards event, which further cements our brand in the minds of our clients, the bingo operators.

“Another example of differentiation, which might seem obvious to some, was to completely redesign our website from the ground up. Statistics were showing as early as 2012 that mobile viewing of our website was on the increase, so we took the steps to rework our site and create a fully responsive and adaptive experience for our audience. Again, whilst not seeming to be a big thing to some, the size of WhichBingo, with over 400 bingo site reviews and in excess of 7,000 player reviews, meant it wasn’t a small task. The website actually took over 12 months from concept to completion, and as every marketing team knows, it’s never complete, and to this day we continue to improve the performance of the site in both user journey and interaction.”

So what other insight and opinion can he offer in relation to the acquisition of those sought-after players?

“By definition, a new player is someone who is new to a brand, but we all know this isn’t always the case when players use multiple email addresses to sign up,” Jones says. “Brand loyalty is something every operator strives to achieve, but when you’ve got the biggest operators in the market still demanding thousands of new players every year, you’ve got to question where they’re coming from.

“Not everyone over 18 is a customer of a gaming brand and as for a saturated market, it’s worth remembering that there are thousands of people turning 18 every year in the UK, and some of these will go on to become customers in the gaming market. So is the market saturated? I’d say not. It’s mature but it’s still growing, just like the population.”

Another industry expert keen on the ‘mature’ word is Eitan Boyd, CEO of Stride Gaming. The market is going through a “transitional period”, he believes.

“Regulated markets like the British one seem to have become even more saturated and a lot of people think that it is the end of affiliate marketing as we know it,” he says. “Do not fall in the trap though, it is not all bad! When a market is saturated it has also reached maturity. Operators look for ways to improve their products, make them mobile/tablet friendly, as more than 40% of traffic is not coming through those devices.

“Apart from updating any existing product an operator might have, it opens up the opportunity of creating brand new, more exciting ones and this is what a good affiliate can take advantage of. Being given the chance to drive their traffic to a new gaming site is a God-sent gift. Having lately experienced this with the launch of BingoExtra.com, I can confidently say that this is their chance to earn commission for life. This is where the revenue share commission plans seem to have the edge as opposed to the CPA ones.”

Boyd points out that commission models are changing and operators are indeed offering more to attract affiliates. The UK point-of-consumption tax has been trimming the operators’ earnings and theoretically this has an effect on the affiliate earnings as well.

“Do not be fooled though,” says Boyd, “Your overall earnings are not, in practice, affected at all. More and more operators are investing in advertising their products on TV. Since player retention or branding costs are not deducted by affiliate earnings, affiliate partners can benefit from the operators' efforts. The operator, most of the time, is happy to share TV advertising schedules.”

Josh Green, the managing director of betabonus.com, a leading enhanced odds comparison site, says, however, that it is “difficult” for affiliates these days. Like so much in life, the biggest can dominate, squeezing out the smaller models.

The biggest affiliates can charge an additional fee or revenue through re-activating old players tagged to other affiliate accounts, but this is very unique, harder to track and only done in a handful of cases with the biggest playersJosh Green
“The larger affiliates can prosper as they can utilise existing relationships with operators for more unique offers and have much more flexibility in negotiating deals for old and new players and re-activating old dormant players," he says. “Affiliates tend to only get paid on new players. The biggest affiliates can charge an additional fee or revenue through re-activating old players tagged to other affiliate accounts, but this is very unique, harder to track and only done in a handful of cases with the biggest players, like Oddschecker.

“For survival there has to be presence on all channels, mobile and desktop. Mobile [comes] first which a lot of old affiliates haven’t adopted well. Unfortunately there’s little innovation in this space. There has been some investing in mobile-focused products but they are struggling with USP or with offering anything different to what’s already out there. Social media is extremely important and some new affiliates operate pretty much 100% through Facebook and Twitter. You can build up good audiences and volume but player values tend to be a lot smaller. Some big social media affiliates have a portfolio of sports and viral-type social accounts which they plug sports-betting offers through.”

Boyd agrees that mobile comes first. He says: “It seems that nearly half of affiliate traffic comes through mobile devices these days. For example, a player is more likely to grab their phone or tablet than go to their desktop computer, when the Magical Vegas television advert comes on while watching The Chase.

“Social media advertising is also becoming popular. Such mediums offer more targeted advertising as you can choose the age, sex, location and likes/dislikes of the potential player you want to approach. Worth mentioning here is that the future of web-search is very favourable to YouTube. Alongside Google, it is the most used ‘search engine’ on the web. YouTube itself is offering a wide variety of ways to advertise through its platform.

“In spite of these new opportunities, a lot of affiliates still remain more old-fashioned and prefer to work with mailing data. When they do this, they must make sure that the potential players have opted in and that this will not include self-excluded players. A potential complaint from the UKGC could immediately stop the relationship between the affiliate and the operator.”

Perhaps there is devil in the detail. To explore the finer points, it is necessary to ask about those players (as hinted at earlier) who last played when the market was not as heavy. Say three years. If they were to suddenly revisit that same site through a new affiliate, will that new affiliate make no money because the player is technically not a new payer?

“That’s just the way it goes,” Jones says. “Unless operators change their lifetime revenue models, which I’m not suggesting for a moment they do, there isn’t much us affiliates can do about it. It’s back to the same model from operators: send us new players. Affiliates need to look at ways of restarting their own referred lapsed players, but again, this is a great opportunity for a joined-up marketing approach, but most operators aren’t interested in this model as they believe they have this covered by their own CRM and marketing teams.

“When it comes to affiliates and operators, it’s always the same story: send more new players. The main issue with affiliates and operators alike is the need to change how they view the market. Players who are loyal to particular brands are unlikely to move to another even for free money offers, especially in the bingo market, where free money is not always really that free.

Brands and operators should look at ways of working together to form ‘joined-up’ marketing initiatives to re-engage and reactivate players from affiliates for the benefit of all partiesSimon Jones
“Operators especially need to break down the barriers they have internally between acquisition, marketing and CRM. Most brands operate these departments as silos and rarely share insights or data, which makes it difficult for affiliates to differentiate. Most affiliates will only deal with acquisition teams and rarely with marketing or CRM, which often exasperates them when they don’t meet the targets for new players. Instead, brands and operators should look at ways of working together to form ‘joined-up’ marketing initiatives to re engage and reactivate players from affiliates for the benefit of all parties.”

So instead of something new being needed to keep the affiliate market fresh and alive, it is in fact something old. Since gaming time began, affiliates and operators, often at loggerheads, have just needed to be more chummy.

“There’s always room for improved relations between affiliates and operators,” Jones says. “But this isn’t going to change anytime soon unless operators get their internal team communications working better. In terms of something specifically new, of course, there will no doubt be new innovations in technology on the horizon with improvements as always to things like advertising targeting, especially on yet to advertise platforms like Instagram and Pinterest.”
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