Part 3: The future for affiliates
Hiring people on the
ground is a key obstacle for
new markets, as the pool of
experienced staff in some
countries is non-existent
Michael Holmberg, Raketech
actions on the part of the authorities.
Nothing about the US is completely
alien, even if the regulated nature of
the market is new.
“The framework for [Google]
ranking is global,” says Garner
from Rize.Digital. “It is also worth
saying many affiliates have ranked
on gambling phrases in the US for
years and they profit by marketing
operators who are prepared to take
the regulatory risk of accepting
customers from that territory.”
As has been discussed in the
previous section, whether the
unregulated and regulated can
sit together in the US is a highly
debatable scenario. Garner asks
“whether the US regulators will have
the same demands on affiliates as
the UK regulators do”; but arguably,
if they follow the UK example, it will
‘merely’ be a question of pressurising
the operators, which will determine
which affiliates they can work with.
A new car in a new town
Still, the US is far from being the
only new opportunity for affiliates.
“The beauty of affiliate marketing
can really be found in its ability
to develop new markets,” says
Galanis. “Right now, the most
interesting opportunity lies in South
America, where overtones towards
regulation – and sensible regulation
at that – provides a time-sensitive
opportunity for affiliates.”
Galanis mentions Brazil, Argentina
and Peru as being particularly
“fascinating” in this respect but
he also cites Africa, which was
also given a mention by various
other market participants and
commentators as being a territory
that’s underexploited in affiliate
terms. In a similar sense, eastern
Europe is also namechecked in
affiliate circles as a territory ripe for
further exploitation.
One argument set out by
Garner suggests that affiliates
are emerging in new – sometimes
greyer – territories all the time.
“When you look beyond the main
regulated markets, it’s remarkable
how much business there is,” he
says. “More regulation means more
admin; however, as you know you
can rank anywhere in the world
from anywhere in the world, so the
whole ecosystem is very liquid and
malleable. Upshot: affiliates will
follow the path of least resistance
and most profit, taking them
to whatever country territory
produces revenue.”
Skill sets
In part this is about transferable
skills. As Garner pointed out with
regard to the US, the basic structure
of search is applicable globally.
Holmberg at Raketech notes that
“certain marketing techniques
that are no longer used in western
Europe can still be used in emerging
markets”.
He adds: “Thus, affiliates will look
at the things they did well in western
Europe and apply those to penetrate
new markets at an early stage.”
But Holmberg stresses that
moving into emerging or grey
markets shouldn’t be seen as simply
an escape route from more stringent
regulatory conditions in more
mature markets. “There are some
great opportunities in emerging
markets but we wouldn’t only cite
harsher regulation conditions as a
factor to look further afield,” he says.
“While there are plenty of great
opportunities in unexploited
markets, there are also a lot of
challenges and risks,” he adds.
“For example, hiring people on
the ground is a key obstacle
for new markets, as the pool of
experienced staff in some countries
is non-existent. Also, mature and
regulated markets provide a level
playing field without the risk of a
drastic government clampdown,
something we have seen before in
this industry. Thus, regulation helps
ensure more regimented and safer
market conditions.”
The rules of distraction
While the increase in regulations
may be a source of angst among
some affiliates, they should be wary
of believing the sunlit uplands of
new territories will be free from such
burdens, warns Henderson at Kindred.
“Note that many countries in
eastern Europe and Africa are
regulated and come with similar
compliance pressures to western
Europe,” he says. “Any major affiliate
in this business for the long haul
needs to address compliance and
Under pressure: Regulation and the evolution of affiliate marketing
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