Both as a tool for marketing a start-up and as a potential area for a new business to launch into, the affiliate marketing space is a key sector with online gambling. It offers a relatively easy route to market, it is an area stacked with entrepreneurial spirit, and the route through to revenue is – superficially at least – straightforward. The amount of affiliate events dotted around the calendar highlight how important the sector is to the online gambling operators, and whether you are looking at entering the sector or just want to know more about how affiliates help other businesses, then time spent understanding some of the basics will pay dividends. One of the experts in the field is Luke Cotton, marketing manager with one of the largest affiliate network providers, Digital Fuel. Here in part one of a two-part series he talks about his thoughts on where the opportunities lie in affiliates marketing and cautions against anyone believing there are any particularly easy wins in the space. His first piece of advice is think about what you are offering the consumer and ask the obvious question – will anyone want this?
GamCrowd: The online gaming affiliate area would appear to be one where new start-ups and businesses can get a foothold - is this too simplistic a view?
Luke Cotton: It really depends on what you are trying to achieve and the product that you are able to deliver. Launching an affiliate business can be done for very little money, unlike launching an operator or software company. But don’t get ideas of being #1 on the SERPs for ‘free bets’ or ‘online casinos’; not only are almost all the high value terms very competitive, but Google is starting to favour brands more and more, and it takes time to build up that profile. There have been a fair few new affiliates enter as PPC aggregators over the past 12 months however the budgets required to compete there are not within the reach of most start-ups.
If you are able to identify a new product that can fulfil consumer demand better than existing affiliates, identify a new marketing channel to deliver your message through or identify a new niche before others have acted on it, then there is the potential to build a successful business, though it is unlikely to happen overnight. In terms of niches, daily fantasy sports and eSports are the two which hit the headlines in 2015, and I'm sure others will emerge as the industry continues to evolve. There hasn’t really been a new platform used by affiliate since Twitter and Facebook took off, though it only takes one ‘shock’ to open up a new channel to market through. Just launching a top free bets or top 10 online casino site is almost certainly going to be a waste of time.
GamCrowd: What would be your tips for any start-ups viewing the affiliate space generally?
Luke Cotton: If you are a start-up looking to become an affiliate, ask yourself the question why would a consumer use my site and not a large, established competitor?’ If you aren’t providing something of value to consumers, they won’t click through and won’t come back. Secondly, focus on what you are good at and outsource what you are not. If you are a great software developer and can build a clever product, but know nothing about SEO or other forms of digital marketing, find an expert in those fields to work with. If you can't afford to do so, consider swapping equity in return for services and doing a joint venture. Many existing affiliates or marketing agencies will be open to this - just make sure you work with people who know what they are doing and can show you previous successes. You are much better with 50-80% of something that is brought to market and given the best chance of success, than all of something that is likely to fail. If commercial negotiations aren’t your strong point, consider working with an affiliate network or have someone broker your deals; as a new affiliate, you’re likely to benefit from their bargaining power.
If you have a product and are looking to advertise it through affiliates, definitely do so, but be realistic. Many of the larger affiliates are likely bigger brands than your own, and it's a competitive marketplace. Build partnerships and reward affiliates well and you could kick-start your business.
GamCrowd: What are the biggest prat-falls to try and avoid?
Luke Cotton: Don’t just assume people will be able to find your product and that they will want to use it. Work out what need it is helping them address, and focus your product around that. Then ensure whatever you are doing is scalable. There are only a finite number of hours in the day so being able to automate as much of your business as possible and being able to scale it effectively is important. Equally, you shouldn’t spend too long trying to perfect your offering before going to market. You want to release a good product, but you can develop while going along.
Within an affiliate marketing business there are a number of areas that you need in order to be successful. Prioritise them, figure out the key tasks in each area required to succeed, focus on an area, and repeat. It’s easy to get bogged down with tasks that aren’t going to determine whether you fail or succeed; and if they aren’t critical to your success, try and outsource them.
GamCrowd: Is affiliate marketing an area any start-up should be able to understand and potentially exploit?
Luke Cotton: The basics of affiliate marketing are very easy to understand but executing a successful affiliate programme is more challenging. A common error many product-based, or operator start-ups make, is assuming that affiliates will jump at the opportunity to work with them. Often they do this without understanding their potential affiliates’ business model and margins. Start-ups are competing with established brands and need to demonstrate how they can increase the affiliates' earnings by replacing an existing partner. Given the nature of affiliate marketing being performance based, it is easy to scale if done right, and the potential sales volumes are huge without a large up-front investment in media spend being necessary.