It’s been a huge year for affiliate marketing and the American state lottery industry. Michigan Lottery launched the industry’s first program back in January, followed by Pennsylvania in June. From launch, both programs were powered by our affiliate platform and managed by our affiliate team.In an op-ed for La Fleur’s lottery magazine earlier this month, we took the opportunity to look back on the two programs’ progress and the lessons learned. You can read the article on the La Fleur’s site, or read the full text below.
2018 has been a momentous year for US state lotteries, having already seen the affiliate program launches for corresponding iLottery offerings in Michigan and Pennsylvania - the first two US-based programs of their kind. Now, with the third quarter of 2018 nearing its close, the respective marketing teams for these state lotteries are beginning to plan their overall strategies for 2019. This makes it a great time to assess how the current environment will affect such decisions in the months to come.
According to Statista, as of 2016, 76 percent of the population in the US uses the internet. Moreover, around half of the population plays state lotteries, according to a July 2016 Gallup survey. This means that a large segment of a receptive lottery audience is regularly exposed to strategic online advertising.
iLottery affiliates are online partners who implement their own marketing strategies, complementing those of the lottery and helping them to acquire more players. These affiliates are very knowledgeable, something evidenced when they first started building up traffic in response to talk of a regulated US market. Now that state lotteries have begun moving into the affiliate space and the Professional and Amateur Sports Protection Act (PASPA) has been repealed, the US market’s potential is only growing as global affiliates look to seize an opportunity to monetize that traffic.
Cultivating affiliate partnerships is greatly beneficial to lotteries, as it helps with customer acquisition by reaching a player base that may have otherwise not been aware of the iLottery. But online advertising executed by affiliates is not just effective in targeting relevant audiences - it’s also very cost-effective. This is because affiliates are compensated based on their performance, as opposed to upfront costing models of media buys with high traffic. Additionally, through their promotion of online iLottery bonuses, affiliates provide players with incentive to buy tickets online and complement existing in-store purchases.
There are established European lottery affiliate and service providers that can diversify into the US market. This helps launching affiliate programs acquire a significant number of players in a shorter timeframe and a build a solid base. Since their launches, the Michigan and Pennsylvania state lotteries have acquired several thousand new players from their respective affiliate channels alone.
Affiliate programs are also beneficial to the lottery’s overall marketing, as it allows affiliates specializing in other verticals/products, to cross-sell and provide the brand with exposure across a wide variety of igaming sites. This complements the promotional activities led by internal marketing teams, as affiliates promote the brand through various channels themselves (e.g. search engine optimization (SEO), pay per click (PPC), mobile, etc.) only getting paid if they deliver results. This provides iLotteries with exposure across hundreds of sites that they would not have been featured on otherwise.
Branding is greatly impacted by the affiliate space, particularly for state lotteries, as it helps educate both existing and prospective lottery players on the online opportunity, which is a whole new space for them. State lotteries are already widely recognized in their own markets, however, players may not know about the iLotteries. Strong affiliates partnerships help raise awareness of the online brand in a cost-efficient manner and drive more traffic to the site.
So, what is ahead for the rest of 2018 and 2019 in the US iLottery space? With the US market's current evolution, and iLottery being an emerging vertical itself, we expect to see a sizeable influx of activity. There is great potential for growth in this vertical, as iLottery becomes a more established means of buying lottery tickets and more affiliates move into this market, making the future of US iLotteries very bright.
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