Part 3: The future for affiliates
affiliates undertaking revenue-share
agreements.
“Affiliates will be under the
regulatory spotlight in the
US and developments in this
market are quite unpredictable,”
says Holmberg at Raketech.
“To successfully enter the US
market, European affiliates need
to fully understand the region,
its intricacies, most popular
sports, betting odds formats and
consumer habits.”
As with any new market,
adaptability will be a key attribute
for those hoping to strike out
into new territories; having an
understanding how US consumers
differ from their European
counterparts will be vital.
“Anyone who thinks they can just
drop an existing English-language
platform across the pond and
become number one is fooling
themselves,” says Søgaard. “The
US consumer has a completely
different approach to sports betting
and sports fandom. It is up to us to
adjust our products to appeal to that
type of audience.”
New partners
Compared with the online industry
that has grown up in Europe, the US
sports betting market is likely to be
much more closely entwined with
the land-based gaming sector.
“The previously land-based
operators of the US are now
entering the digital space for the
first time and we as experienced
affiliates have the opportunity to
help guide them towards greater
success,” says Søgaard. “Plus, with
many of our European partners
establishing operations in the west
as well, us European affiliates need
to be prepared to supply them the
same strong users over there as we
have done in Europe.”
Galanis thinks the particulars
20
The beauty of affiliate
marketing can really be
found in its ability to
develop new markets.
Right now, the most
interesting opportunity
lies in South America
Tom Galanis, TAG Media
of the US market will encourage a
change of business practice among
affiliates. “For affiliates to present a
sustainable business model that is
attractive from both a commercial
and regulatory perspective, we
are likely to see them morph into
customer-engagement businesses,”
he says. “[That will mean] going
beyond pure acquisition to assist
in the successful onboarding
and reactivation of players. The
likelihood that CPA deals maintain
pre-eminence over more complex
revenue-share arrangements will
allow for this.”
Wellard at iGamingXL agrees,
suggesting that affiliates in the US
will be regarded more as media
partners, with CPA deals much
more prevalent than revenue-share
arrangements. “While there are pros
and cons to this set up, I think there
is a lot of room for success for those
who follow the regulation rules and
prove their results. Those will be
rewarded handsomely,” she says.
Still, she thinks that affiliate
marketing, regardless of how it is
categorised, will account for a lower
percentage of marketing spend (and
revenue) than is the case in Europe.
“I see affiliates as a smaller portion
of the US operators’ business,” she
says. “There is still education to take
Under pressure: Regulation and the evolution of affiliate marketing
place within the US operators and,
as mentioned, the business model
will be different to what we see in
other markets.”
But if the proportion of business
derived from affiliates is smaller
than it is in Europe, it will still
be significant and highly prized,
suggests Damien Fearn, chief
executive and founder at Tipstrr.
“With competition likely to be sky
high between bookmakers in the
US, I’d be surprised if we didn’t see
some very affiliate-friendly deals,
especially in the next 12-18 months
as bookmakers compete to be the
guy at the top in the US,” he says.
“Affiliates with the traffic will almost
certainly be wearing the trousers in
the bookmaker-affiliate relationships
early on.”
Nothing new under the sun
The oft-heard point that sports
betting, particularly online sports
betting but also all forms of
online gaming and gambling, is
nothing new to the US consumer is
particularly relevant to the affiliate
sector.
As Holmberg at Raketech says,
there used to be a huge poker
market in the US and similarly the
offshore sports betting market has
continued to thrive regardless of any