Mike Murphy from OnlineBettingSites.com takes a closer look at the current affiliate marketing industry, what challenges it is facing and how operators and publishers can adapt.
The online gaming affiliate ecosystem has undergone significant changes over the years, and in recent times this change has been rapid. In the early days, the affiliate industry was a free-for-all with few regulations or limits on how affiliates could promote programs around the world.
Today’s online gaming affiliate ecosystem is defined by increased attention from regulators and public perception. Perhaps the biggest sign of the times is that it is no longer accurate to view the affiliate ecosystem as a singular, international blob.
The online gaming affiliate industry is a fractured market with regulations and characteristics that vary from country to country.
No longer is it wise to take a one-size-fits-all approach to promoting online betting sites.
Furthermore, the general public is savvier than ever before. Most visitors to affiliate websites today are well aware of the tips and tricks marketers use to push their wares – simply putting up a 20-page website full of marketing fluff will not get it done. Affiliates need to provide value in the form of interesting, useful and engaging content.
Moving beyond that, there are three key challenges affiliates and operators face that they must adapt to in order to remain viable moving forward.
Challenge 1: Negative Public Perception
Public perception has turned against online gambling in some markets and that in turn has led to crackdowns that directly and indirectly impact affiliates. The United Kingdom in particular exemplifies the importance of public perception and how that can impact affiliates.
The UK gambling industry has suffered a significant amount of negative media attention in recent years focusing on the shortcomings, excesses and consequences of uncontrolled gambling.
In response, the UK’s Gambling Commission and Advertising Standards Authority (ASA) have enacted strict new advertising standards by stating they would begin holding operators responsible for the actions of affiliates.
Sky Bet responded shortly thereafter by ending its affiliate program altogether.
This issue is not limited to large affiliates with wide reach. Even small affiliates can have an outsized impact on the perception of the industry and the resulting regulatory responses.
Combating Negative Public Perception
The gambling industry will always suffer some amount of stigma due to the risk of addiction and the view among some that gambling is not a productive activity. Even so, operators and affiliates have a choice.
They can ignore the occasional spate of bad publicity and hope the industry is not further subjected to onerous regulations, or they be proactive and take certain steps to get ahead of future issues and build as much good will among the public as possible.
First, affiliates big and small must accept the fact that they do play an important role in shaping public perception.
Second, larger affiliates should embrace the role they play in setting an example for the industry. This includes taking care in presenting offers, promoting licensed betting sites in all target markets and encouraging membership in trade organisations.
If a major, well-known affiliate website continues to promote gambling irresponsibly or recommend players to unlicensed gambling sites, it would be naïve in the extreme to think smaller affiliates aren’t taking notice. The bigger affiliates set the example.
Setting a positive example does not need to come from a place of selfless public service. Remember, the actions of affiliates do have an impact on public perception, which in turn impacts how regulators deal with the industry. Responsible advertising is not just the right thing to do; it is a smart business decision.
Operators play a similar role as well in the way they promote their own offers, how they advertise in the media, how they respond to scandals and so on. Additionally, operators should recognize the importance of working with all affiliates (big and small) to ensure they are on the same page when it comes to promoting responsible gambling.
Challenge 2: Tightening Regulations
Regulations are bound to tighten over time due to the simple fact that online gambling is still a relatively new industry that was at one time completely unregulated. Even the mature UK market is still working out the balance between fostering a healthy operating environment and protecting consumers.
Increasingly stringent regulations are a natural and predictable result as unregulated markets become regulated and immature markets become mature.
For the clearest example of this, we turn once again to the UK. After the Advertising Standards Authority informed operators last year that they would be held responsible for the actions of affiliates, multiple big-name operators informed affiliates that they will be held to a higher standard moving forward.
Last year, for example, bet365 underwent a period of enforcing various new advertising policies such as requiring all affiliates to use approved text only when discussing or advertising bet365. The company even closed the accounts of affiliates who failed to comply after a set amount of time had passed.
The increase in regulations has gotten to the point that businesses dealing strictly in monitoring websites for compliance are now up and running – and obtaining clients. Regulatory compliance is no small task, but it is manageable.
Adapting to a Tighter Regulatory Environment
Tightening regulations impact operators first and affiliates second, but both are affected and have no choice but to adapt. Operators of course face the brunt of regulatory activity and have the most to lose, but affiliates shoulder some of the burden as well.
It is important now more than ever for affiliates to keep up to date on regulatory changes around the world. Just as importantly, operators need to keep affiliates informed and provide them with the resources they need to stay compliant.
Operators and affiliates have a vested interest in tackling these challenges together. Relationships between operators and affiliates have always been important, but that is even truer now than ever before.
Challenge 3: Fractured Market
As a more governments choose to regulate online gambling, the global online gaming market is growing increasingly fractured. More and more countries are licensing specific operators and pushing others out of the market via payment blocking, advertising restrictions and sometimes even internet censorship.
Every year it becomes less viable for an affiliate to simply choose a handful of betting sites and promote them to a global audience. A gaming site that is legal in the UK may not be accessible in France, and a site that is accessible in France may not be accessible in Spain.
In addition to that, the rules and regulations regarding how gaming sites may be promoted vary from country to country. Affiliates cannot use certain words and phrases in the UK that generate a sense of urgency at the risk of being dropped by the gaming sites they promote, but those same rules do not apply to promoting those very same operators in other countries.
Adapting to a Fractured Gaming Market
Affiliates must actively work to broaden their skill sets. The days of choosing a few operators to promote and then focusing all of one’s time and energy on promotion are coming to an end.
Affiliates must now work to understand from where their traffic derives and work out solutions to promote the correct gaming sites to the correct visitors in the correct manner.
Operators and affiliates should tackle this challenge as a team. While affiliates should work to understand their traffic, operators should work to provide affiliates with the tools they need to promote the correct sites to their visitors.
Affiliates can start by educating themselves on the many geolocation tools available that can tailor content to the audience based on visitors’ points of origin.
Operators can provide guidance in this manner as well as take steps such as providing affiliates with country-specific landing pages and tracking links, and even things as simple as lists of countries from which they accept customers.
The fractured gaming market is certainly a challenge, but also presents an opportunity. The affiliates who make the effort to tailor their recommendations to visitors will see increased conversions and all the benefits that entails.
They will also gain market share as the affiliates who adapt versus the many who refuse to adapt and are subsequently flushed out of the industry altogether.