Affiliate marketing has grown in popularity and success in the 21st century as an extremely viable business model for referral-based marketing.
This model has evolved from small-scale referral programs to massive operations that end up on the world’s largest stock exchanges.
iGaming affiliate programs are some of the most profitable in this sector. However, recent advertising, regulation, and Covid-related issues have fundamentally changed this structure. The rise and fall of iGaming super affiliates is closely tied to the regulatory landscape of gambling in general.
iGaming super affiliates
The big names in iGaming affiliate marketing have had their share of ups and downs in recent years, causing them to make strategic adjustments to their businesses, continually reevaluating the best ways to operate in an evolving marketplace.
XLMedia, one of the world’s largest iGaming affiliates, is primarily an iGaming affiliate producer, working to develop proprietary technologies both in the gaming sphere and in finance as well. Gaining its IPO in 2013, XLMedia has had significant success in acquiring smaller businesses like DAU UP and greedyrate$.ca.
Listed on the London Stock Exchange, XLMedia has seen its share price have dropped significantly over the past few years, causing a stir in the industry. The same trends can be seen with other iGaming super affiliates like Catena Media, Better Collective, and Raketech — major upheavals from highly-trusted brands.
This shake-up will only serve to grow the marketplace, giving smaller fish a chance to swim in the big pond of iGaming affiliate marketing. Smaller affiliates such as FlashCasino.org are now sweeping up the traffic as these super affiliates blow up.
Issues for affiliates
The iGaming industry has seen a host of changes and new challenges over the last few years. Fluctuations in the regulatory landscape, both internationally and within the United States, present both opportunities and hurdles that spark strategic restructuring and continuous re-evaluation of “business as usual”.
While momentum in M&A (Mergers and Acquisitions) tended to a feverish pace for some time, this has significantly slowed, highlighting evolving strategies amongst iGaming super affiliates and their teams. 2018-2019 saw a downturn in the number of active deals and a trend toward fewer, larger acquisitions with a focus on strategic plays.
Legal regulations governing iGaming, sports betting, and gambling, in general, have been in constant flux in recent times. While new markets open up and become friendlier to the possibilities offered by the industry, others face more restrictions.
The latest regulatory moves in Italy, Spain, Belgium, the UK, and Sweden have brought online gambling-focused affiliates increasingly into the regulatory spotlight.
We’re starting to see more US states open up to legal online sports betting and gaming, introducing audiences to new brands via sponsorships and digital media. This noise will not only open the doors to new, smaller affiliate marketers but also increase the authority of established brands in the eyes of the public.
Google and the world
It’s no secret that Google touches some aspect of our lives on a daily basis. The same is especially true when it comes to businesses. One of the major downfalls for iGaming super affiliates is Google.
Each successive Google algorithm update sends shockwaves through every industry, but the last several saw iGaming sites get slammed hard in the Google rankings. After all, when any consumer is looking for products and services we don’t really go to the Yellow Pages anymore, we Google it.
Simply put, losing the top spots on Google rankings has brutally hurt a lot of the major iGaming affiliates in a tangible way.
Online advertising, while once the Wild West of marketing is now under far stricter control by governing authorities. Operators and their affiliates also have to abide by specific rules as set out by the Advertising Standards Authority (ASA) and its non-broadcast Advertising and Direct & Promotional Marketing (CAP) code.
Compliance with the code is required of both parties and the rules are only getting more stringent. The rules, however, are not unreasonable, just subject to change, including not advertising to children, the sending of unsolicited mail, clear notification of advertorial and provisions around misleading marketing.
Despite the plentiful issues that the Coronavirus pandemic has caused worldwide, it may not be completely to blame for the fall in profits seen by the major iGaming super affiliates. Even as far back as 2018, big names like Better Collective have reported a year-on-year decline in net and operating profit, despite a visible rise in revenue.
iGaming affiliate marketing going forward
The tone of regulators seems to be setting the stage for a new way of doing business for iGaming affiliate marketers.
“Affiliates need to be advertising in a socially responsible way,” says John Hagan, founding partner at Harris Hagan and chairman of the Industry Group for Responsible Gambling (IGRG). Speaking about compliance issues going forward, he went on to say that, “affiliates who commit to education, training and a proper commitment to compliance with advertising, data protection, and gambling regulatory requirements will have a sustainable future and a very major competitive advantage over their less responsible rivals.”