Part 2: The changing affiliate landscape
work, which should lead to a clearer and more
functional environment,” the statement said. “There
has also been some reduction in SEO performance
in a few specific territories.”
Ory Weihs, chief executive at XL Media, said
at the time that the regulatory changes – and
their interpretation – has “confused the market
substantially”. He added: “We are now starting to
see this stabilise but, whilst there is uncertainty
around the impact of regulations, there is naturally
a disruption to normal course, both with online
gambling operators and affiliates.”
Regulatory changes and their
interpretation has “confused the
market substantially
Ory Weihs, XLMedia
Tied together
Weihs made it clear in June that XL Media would
focus on “operating in markets where there is
clearly defined regulation in place, or where
regulation is in the process of being implemented”.
This makes plain that he sees his company’s future
as tied to those of the regulated operators.
Similar sentiments surfaced in Catena Media’s
Capital Markets Day presentation, where the
company made the point that 75% of its revenues
come from regulated and/or tax markets (a
definition that brings in German sports betting, if
not German online casino and games).
Still, Catena indicated it would work in “the lower
risk” grey markets, presumably determined by the
tolerance of the operators.
The regulatory tie proves an obvious point
regarding affiliates. The operators seek out new
Chart 4: Raketech share price since float
July 2018 to December 2018
32
27
21
16
11
5
0
Source: Company
18
markets according to their own business plans and
the affiliates (at least the established ones) follow.
This is obvious from the enthusiasm from Catena,
for instance, for the US sports-betting opportunity.
Whether by luck of judgement, the company finds
itself in prime position to feed the need for players
by regulated sports-betting operators.
The degree to which Catena, in particular, feels
exposed by its reliance on one sector is clear from
the company’s recent presentation where it makes
clear that it believes it has “transferable skills”,
and sees its future in exploring other, potentially
adjacent, sectors.
As it stands, this is confined to the financial
services sector where as of the third quarter the
company earned 6% of total revenues.
Under pressure: Regulation and the evolution of affiliate marketing