For this week’s ICE Totally Gaming and London Affiliate Conference (LAC), we developed an article for the conference issue of iGaming Business. Our thought leadership piece on affiliate marketing in 2018 discusses how operators and affiliates can collaborate and work together to improve the channel.

While you can check out our article by picking-up the latest issue of iGB at ICE and LAC, or read it online on the iGB site, we’re also publishing the whole piece here. Part one is available below, while we’ll publish part two tomorrow.

iGaming affiliate marketing is currently facing a moment of reckoning in the core UK market amidst greater scrutiny from the country’s Gambling Commission (UKGC) and advertising regulators. Both operators and affiliates can, however, consider 2018 as a window of opportunity to streamline a powerful and ultimately indispensable acquisition channel.

After all, a mature affiliate programme can drive as much as a third of a UK brand’s acquisitions, according to Income Access data. The country also remains the heartland of affiliate marketing. A recent company survey revealed that two out of three global affiliates (64.7%) promote UK brands.

From ROI to Regulators

A major reason for affiliate marketing’s enduring presence in operators’ acquisition arsenals has been its cost-effectiveness, as its performance-based model means that brands only pay for converted players. Its return on investment (ROI) remains far stronger than pay-per-click (PPC) advertising, for instance. The average cost-per-click (CPC) for ‘online gambling’-related UK AdWords keywords is £25.45, second only in expensiveness to ‘casino’, with CPC averaging £58.57, according to WordStream.

The channel also provides better ROI than media buys with high-traffic websites. Even if programmatic contextual targeting is improving click-through rates (CTRs) – Google/Ad Age report a 44.3% increase in CTRs from programmatic – operators are still paying for ad impressions rather than conversions.

Affiliates are also increasingly fronting the risk of media buying. “In the last five to seven years, many media buy and data-driven affiliates have come to the forefront,” says Allan Turner, Chief Marketing Officer at online casino and bingo operator BGO Group. “This really enabled the affiliate channel to drive traffic – all the way from very broad traffic sources targeting the public to very targeted high-value, gaming-specific traffic.” He adds that the channel’s flexibility remains one of its key benefits.

This very flexibility – from media buying and social media to native advertising – has unfortunately facilitated the dishonest tactics of a small minority of affiliates, leading to greater oversight from the UKGC and the Advertising Standards Authority (ASA). Last September, the ASA censured four operators for an affiliate’s native advertising campaigns referencing their brands in a ‘fake news’ story involving a fictional gambler.

Even if the ‘fake news’ were true, the tactic would have fallen foul of the ASA’s all-important July 2017 update on iGaming affiliate marketing, which specified that “ads must be obviously identifiable as such”. The update emphasized operators’ fundamental role in ensuring affiliate compliance: “When it comes to non-broadcast affiliate marketing, primary responsibility for observing the CAP [Committee of Advertising Practice] Code remains with the Gambling operator.”

Against this backdrop, operators have adopted various approaches to ensure compliance. Last September, Sky Bet closed its affiliate programme, citing “changing regulatory requirements”, while the same month Paddy Power-Betfair introduced a one-strike policy for affiliate compliance.

Tomorrow, you can read part two of our iGB article. We look at the specifics of streamlining an affiliate programme and operator-affiliate collaboration.