Over the past few years, the sports betting vertical has undergone much consolidation through various mergers, acquisitions and takeovers. This has led to a decrease in the total number of affiliate companies, but an increase in the size of the businesses. The industry is no longer being run by a high volume of small teams operating one or two affiliate websites, but rather by large corporations who operate dozens of them.
As a result, the affiliate landscape is seen as extremely intimidating, which can be a major hinderance to those wishing to enter the space because of their preconceived set of obstacles they will have to face in order to be successful.
In this article, we examine the top four challenges commonly faced by sportsbook affiliates and weigh in on insight provided by some of the industry’s top affiliates and our longtime partners, who discuss how to overcome them.
Challenge 1: Competing with large-scale companiesHaving to compete against big corporations as a small- or medium-size affiliate can be a real challenge for a number of reasons. Most notably, these businesses have the benefit of bigger budgets. This allows them to operate more websites, hire larger teams, dedicate more resources, and make exclusive media partnerships to remarket huge volumes of other sites’ traffic.
The result is a monopolistic environment where these big “super affiliates” run the show and are offered higher deals by operators, ultimately providing them with even more budget to work with; compared to their smaller-scale counterparts, who oftentimes are able to deliver higher quality results, should they be given the resources to do so.
Alexander Kostin, founder of AmericanGambler.com, started his own venture in 2019, and experienced this firsthand. He says: “Affiliate partnerships must be give-and-take. Operators should start giving the mid-size guys a slice of the pie as well by offering higher deals, at least for trial periods. Our experience with operators who have done this, allowed us to grow significantly, as we were able to funnel the additional commissions we were making back into our campaigns and promote their brands even more, encouraging them to invest more in us.”
Challenge 2: Wanting to Grow Too QuicklyThough it might seem like the appealing thing to do, signing up with as many operators as possible to grow quickly, is not the right approach for small and medium size affiliates. It usually leads to struggles with organisation and the over-spreading of budget, resulting in disjointed campaigns across all partners.
Kostin advises strongly against this tactic. He says to “instead make deals only with companies that allow you to deliver on what you promise and what is expected. By doing so, you can gain trust, build stronger long-term relations, and boost your fees with the partners. This will allow you to better compete (or survive) in the rapidly growing and maturing market of sports betting.”
Challenge 3: Managing and Monetising Growth EfficientlyOnce an affiliate has established themselves in the market, then next step would be to start working on expanding. During this stage, it might not always be clear which operators have the appetite to spend marketing dollars, which ones perform better on certain sporting events and ultimately, which will provide the most commercial value. Leading up to a big betting event, like the World Cup, it can be especially challenging to determine where it makes the most commercial sense to direct your increased traffic.
James Brotherton, Director of Sales, North America and Gambling.com Group, emphasizes the importance of monetising growth, especially when dealing with a higher number of operators – which he does. He says: “Holding several different conversations makes things hard to align if selling inventory, so we found it expedited the whole process to put together a catch-all brief that laid out everything the operator wants to know; what we offer, clear benefits, FAQs, what they can do for us, etc. This helped streamline conversations immeasurably and contributed to a far more productive, lucrative project that proved to be a big success.”
Challenge 4: Navigating the Legal LandscapeAnother obstacle sportsbook affiliates will encounter are the regulatory intricacies within each market. Not only must affiliates understand the legalities of where they are conducting business, but they must also educate their customers. There is a noticeable deficit in understanding what is legal and what is not with the average bettor, especially in the US market, where affiliates and operators need to deal with a patchwork of laws, where things are legal in some places and not in others.
Dustin Gouker, Head of Content for Catena Media US’s array of websites, says the best way to combat this is by using “both high quality and high volume content as a tool for education. We are doing our best to provide a wide swath of sites and resources that educate bettors in a way that is not misleading.” By becoming educated and staying up to date on the regulations within each market, then putting out good quality content over as many sites as they do, Catena Media US has been able to successfully navigate the legal landscape of the sports betting space.
We would like to thank our partners from American Gambler, Gambling.com Group and Catena Media US for providing their insight on how to overcome challenges faced by sportsbook affiliates. We invite affiliates wishing to enter the space, to employ these practices themselves; and operators to share the insight provided above with their own advertisers.