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The affiliate evolution

Insight | Analysis

Since the repeal of PASPA, the US affiliate sector has already undergone drastic change. Cole Rush looks at how the sector got to where it is now, and where it might go next.

Search for odds or lines on any given match-up, and the vast majority of results will spring from affiliate sites. The affiliate market has a long history of operating in tandem with sports betting, reaching back to much-more-mature markets like the UK – or even beyond locally regulated online betting – and into the early annals of US sports betting upon PASPA’s 2018 repeal. 

Now, the affiliate space is broader than ever before. It’s become an industry all on its own, and it welcomes change with open arms. From overseas roots to the burgeoning US market, affiliate sites have had to contend with ongoing legislative efforts, tricky regulatory webs, and ever-evolving player tastes. 

Turns out, everyone’s talking about the affiliate sector. Frankly, we don’t blame them; there’s a lot to discuss. Gambling affiliates today are unrecognizable compared to the modest sites that spawned the industry. 

In a state of constant change and subject to numerous external factors, the affiliate sector has to somehow remain nimble. And so far, it has. 

How we got here

“A lot has changed.” That’s Chris Grove, acting CEO of American Affiliate. “New channels, new formats, new markets, new regulations, and new customer attitudes. The most notable change has been the steady professionalization and scaling of affiliate marketing companies. There simply was nothing like Catena Media or Better Collective back in 2003.”

Grove has been in the affiliate sector for the better part of two decades. His American Affiliate business went public earlier this year via a transaction with FansUnite. 

His view of the affiliate space holds true among many industry experts. 

Dustin Gouker, Catena Media’s VP of North America for content, says: “The affiliate space now isn’t just ‘gambling sites.’ The universe is nearly any site with authority.”

Gouker also emphasizes the sweeping change in the industry since he started working in gambling nearly 20 years ago. 

Troy Paul has less of a history in the industry, but his business SGG Media has a unique take on the space: “We harness the power of social media by leaning on our vast network of over 1,000 micro-influencers to produce highly-targeted content and advertising that appeals to sports fans who are used to consuming media in-game through a variety of channels.”

Paul says sportsbooks are on the hunt for cost-effective ad channels. “Spending $30 million per month on TV ads is clearly not sustainable. [We] believe social media is the answer[…]you can reach and engage with a far broader audience for just cents on the dollar.”

Compared to the typical SEO and web-development play, SGG Media is doing something different from what most affiliate or affiliate-adjacent businesses are used to. But more on that later. 

US affiliates have to contend with rapid change. The landscape requires constant readiness and the ability to turn large businesses on a dime just to react to the latest change. 

“The affiliate sector is undoubtedly evolving and maturing at a breakneck speed in effort to keep pace with the overall hypergrowth of the US gaming industry,” says Joe Casole, senior director, regulatory affairs at Odds On Compliance. 

“In this regard, both experienced foreign affiliates and US brands and platforms transitioning to an affiliate model are getting better at understanding US consumers and how to translate that knowledge into a profitable affiliate business. In other words, because sports wagering and igaming are still in their infancy, we see a lot of trial, error, adjusting and more trial such that there is near constant change throughout the sector.”

Maryna Sokirko, co-founder at Intress Media, notes that a single corporate force has loads of power over affiliates. “Every so often,” she says, “Google comes in and levels the playing field, so to speak, rewarding publishers who follow Google guidelines and punishing those who don’t. I think these companies that care about customers and quality content[…]stay afloat. Those that don’t—the ‘content farms’—come and go.”

Sokirko says the idea that affiliate sites can be operated by a guy sitting at home in his pajamas is a thing of the distant past. Thankfully, the idea does not extend to writers of pieces like this one; I write this in my sweatpants. 

And before we get into the nitty gritty, Callum Broxton, Head of US Operations for Checkd Media, shares some of the UK’s influence in the United States. 

“In the UK, there has clearly been a tightening of regulatory restrictions for affiliates over the last few years, while widespread M&A in the sector globally has made it a more challenging environment for smaller-scale operations,” he says. “As far as the US is concerned, it is still early days of course but there are learnings we can bring across. When it comes to valuable high-margin products, for example, it is about bundling up the knowledge that sports fans already possess and presenting it to them in a simple, easy-to-consume betting product.”

In short, it’s damn near impossible to pinpoint a single affiliate identity in the US. Change is as constant and rampant as ever, so adaptability becomes the throughline among businesses that approach the sector in different ways. 

Affiliate power & flexibility

Affiliates reside in an interesting space. They’re not quite operators, but they seek the same sports bettors. They historically weren’t media outlets (mostly), but now they’re respected sources for news and analysis. This shifting identity has formed an industry populated by businesses with unprecedented power and flexibility. There are numerous ways to be an affiliate, and various businesses are capitalizing on that opportunity. 

Tom Waterhouse of Waterhouse VC says: “Compared with mature markets outside of the US, US affiliates have considerably more power to negotiate with sportsbooks because in nascent markets like the US, operators are competing to ‘land grab’ market share and acquire as many customers as possible.”

Waterhouse cites customer acquisition prices of $1,000 or higher. Operators have to get creative to make room in the budget to reach new users. 

“Many operators have already rapidly reduced their marketing activities, with a stronger focus on profitability,” Waterhouse says. 

Joe Casole of Odds On Compliance says operators are open to working with affiliates even in the midst of budget cuts. “The limited downside that stems from an affiliate model wherein they only pay CPA and revenue-share affiliates for delivering players and unsuccessful affiliate partners cost the operator no more than limited onboarding and administrative costs.”

“On the other hand, such openness means the operators seemingly pay standard rates between $200 and $600 for CPA affiliates. The offered rate is typically based on the size of the affiliate’s user base and the relevant market(s) covered in the affiliate agreement with little negotiating room beyond the standard offer.”  

Even in the face of operator budget cuts, affiliates still stand to succeed. They’re a cost-effective tool for garnering an audience, though these businesses need to be prepared to accept relatively standard rates and deals. 

In the early aughts, affiliate sites focused heavily on SEO. They provided news and analysis, but lately there’s been a shift. “Traditional” affiliates, insofar as a site can be traditional, still abide by SEO best practices. But they aren’t just landing pages made to please Google anymore. They’re trusted destinations, often the first stop for many a sports fan seeking news, analysis, and betting tips. 

“The most successful affiliates within the SEO space to date have positioned themselves as a broad church for sports-related articles, ” says Jamie Mitchell, CEO of Low6. “The current zeitgeist is ‘Content Is King’ and here at Low6 we’ve broadened that view and consider engagement to be king! Yes, it’s important to enrich betting tips and offers with news, analysis, interviews etc but a forward-thinking affiliate needs to widen engagement to community and social platforms, live activations and, of course, gaming.”

Mitchell and Low6 are practicing what they preach, striking gamification agreements with major sports leagues, teams, and franchises. “This gives us first-party data access to tens of millions of sports fans,” Mitchell says. 

Differentiation comes in many forms. While Low6 offers gamification to operators, other affiliates look to widen their offering and give fans tailored content covering their favorite games, teams, leagues, and sports. 

“You can be an SEO play and be a brand,” Chris Grove of American Affiliate says. “Arguably, being a brand is the optimal SEO play at this stage of the game. In the end, whatever delivers the greatest value to users is likely to be the optimal long-term approach for affiliates. The trick is that calculation shifts over time and across markets.”

That’s especially true in the US, considering the country’s scattershot legislative efforts and sporadic regulation. But being a “brand,” as Grove says, can be a huge advantage. That’s the reason businesses like Better Collective and Catena have long been industry stalwarts. 

Speaking of Catena, it’s one of the biggest brands in the space,and VP North America for Content Dustin Gouker hints at an ‘if it ain’t broke’ model, with room for growth and pivoting baked in. 

“Organic search is still the best way to find bettors and send them to sportsbooks, especially right now in the US,” he says. “And all of us are at various stages of trying to be more than just effective search engine marketers. The reality of the future is that CPAs will go down for affiliates, and only sending new players via search won’t be enough. I think you have to have a brand and something special that will also be able to retain users and continue to convert users after this initial land rush is over.”

Tom Waterhouse says two factors play into any affiliate’s long-term SEO success: “Google de-ranking risk and changing consumer preferences.” As mentioned above, Google can release new rules and guidelines out of nowhere, sparking loads of necessary changes on affiliate sites. 

Consumers change, too. They want content that doesn’t talk down at them but rather gives them new insights they can use to make informed decisions or watch an event with a keener eye. 

Maryna Sokirko of Intress Media says: “I see affiliate news sites getting linked by mainstream media, which is a testament to how far we’ve come in terms of authenticity and credibility. That comes down to using resources in the right way, investing in writers and so on. In my opinion, developing a more holistic site or product is a long-term strategic move that ensures the business persists for a long time. It makes the business more resistant to potential external turbulence, from Google or from regulatory changes, for example.” 

Callum Broxton of Checkd Media says video and other channels can be strong contenders for differentiation. Checkd Media runs The Group Chat, which Broxton says “Is aimed at recreational gamblers looking for a key statistic or opinion to support their selection. We wanted to position our operator partner as the first port of call for parlays and in doing so, the quality of content was paramount. As a result of the success of the campaign, our operator partner now natively uses the content across all of its own social platforms – the only external content that it uses in this way.”

Checkd uses The Group Chat to complement its many other offerings, including FlashPicks, a US-facing affiliate site that falls more under the traditional model. 

For every affiliate using a tried and tested model (again, with built-in wiggle room), there are new businesses approaching the sector from a different angle. 

Breaking the mold

Businesses have already found new and intriguing ways to expand the affiliate space with new models. 

“SGG Media is not focused on SEO at all,” Co-Founder Troy Paul says. We have over 25 million followers via our content creator ‘micro-influencer’ network. Our fans are highly active and love the sports content we push to them daily. For us – and our partners as well – this is a much more authentic way to connect with the modern sports media audience and creates far more opportunities to drive meaningful engagement with fans.”

Paul believes this engagement is more likely to spark action, be it a click-through or a sign-up. SGG is meeting potential bettors in the spaces they already use on a day-to-day basis. 

There’s already evidence that this strategy works. Some sportsbooks hire social influencers as brand ambassadors. Paige Spiranac has been with PointsBet for some years now, thanks to her successful special presence and golf content. 

Jamie Mitchell of Low 6 says: “Betting has become an integral part of the sports fan experience. Creating fun and engaging free-to-play games through leagues and teams is an optimal solution to educate and prime users for a betting experience. Technology will only strengthen to deepen the connection and we’re already building this out at Low6. For example, a fan’s activity within one of our games can be utilized to personalize them with the best betting odds and offers for their in-game behavior.”

Both SGG Media and Low6 eschew the typical affiliate route, seeking instead to differentiate and create new engagement channels for bettors who may already have a favorite news or analysis site. It’s safe to assume similar projects will surface—particularly in the US—as betting and knowledge of how it works worms its way into the average sports fan’s vernacular. 

And while sports betting remains the current king, at least in terms of US expansion, the online casino rush is gaining traction. Affiliates have taken notice. 

Online casino: The next frontier

Every affiliate rep I spoke to for this piece agrees that online casino is massive factor in the US, though it’s not quite where it needs to be yet. This is to be expected, though. Two dozen states have legalized sports betting in some form while only a small handful—New Jersey, Pennsylvania, Michigan, west Virginia, and Delaware—have legalized online casinos. 

Chris Grove of American Affiliate says: “Online casino is already a significant revenue driver for U.S. affiliates. It’s harder than sports in many ways, but it’s easier in others. I’d expect more and more focus to turn there in the quarters ahead, although we may have to wait quite some time before we see a material expansion in the number of U.S. state markets for online casino.”

SGG Media’s Troy Paul highlights specific challenges presented by online casino affiliate endeavors. “Marketing to casino players is far more challenging,” he says, comp[aring to sportsbook users. “The world is full of sports fans, but there is a limited number of truly engaged casino players. Correctly identifying the type of content that resonates with these existing players while also attracting new ones is going to be key in cracking this section of the market.”

Factor in the wide variety of casino game themes, features, and volatility, and you’ve got a cesspool of tastes. No two players are the same. That might be true of sports bettors, but there’s still a finite number of teams and leagues, whereas new casino games launch daily. 

“It’s no secret that sports wagering has limited profitability for all involved and, for that reason, almost every affiliate client we work with has an eye on the slower-growing igaming market,” says Joe Casole of Odds On Compliance. “It’s the industry’s hope that a successful regulatory framework for sports wagering grows the public confidence in the gaming industry as a whole and will in turn lead to a similarly robust igaming industry through the US.”   

Maryna Sokirko of Intress Media says the business keeps a close eye on lawmaker efforts in the US to legalize online casinos. “The liberalization of sports betting has been a whirlwind, with so many states opting to regulate in a relatively short space of time. With online casino, it will be a slower process, but that gives us the opportunity to perfect our product in the jurisdictions where we’re licensed, and we’ll be ready to go as new states come on board. I think, when the dust settles, fewer states will ultimately regulate online casino than will sports betting. So, the casino market itself will be smaller, but still very significant, and the casino affiliate space will be less crowded.”

Where we go from here

Affiliates are ever-changing. It’s a necessity, considering how drastically the industry changes around them. Glimpses of the future are readily apparent in the current state of affairs. Affiliate networks are forming cohesive brands trusted by bettors as much as major sports media outlets like ESPN. SEO remains a prime channel for engagement and customer acquisition. 

Meanwhile, disruptors like Low6 and SGG Media seek to redefine what affiliate marketing means to sportsbooks.

All the while, online casino legislation and expansion looms as the clear-cut “next big thing” in the space. 

Affiliates have been around since the early days of online gambling, and they certainly aren’t going anywhere. But formats and channels change, and affiliates will change with them.