The future for affiliates and the industry

[Eric A]

Hi Guys,

We have been reading with great interest regarding the current issues surrounding rogue programs, predatory terms, affiliate unions and boycotting of conferences. Whilst it seems familiar territory that there will always be a contrast of opinion, as an event organizer, what I would like to know is what do YOU think the industry will move towards?

We also heard at EIG the "founding fathers" panels discussion saying that inevitably operators will transcend away from an affiliate acquisition model and look at other methods to attract players, simply due to the rising costs and competitiveness that the affiliate industry is nowadays.

So what do you think, when thinking about the dynamics of the relationship between operators and affiliates;

• Will Gaming Operators move COMPLETELY away from the affiliate model to acquire new players?
• Will Gaming Operators DIVERSIFY and look to other methods?
• Will operators always rely on affiliates to drive major traffic?
• In the relationship between affiliates and operators - Is it the affiliate that now influences the relationship?
• In the relationship between affiliates and operators - Is it the operator that now influences the relationship?
• It will always be a 50-50 communication level based on trust
• Who cares?

The attempt of this, from my perspective is to move away from the current issues and try to understand how to work alongside what will be a natural evolution for this industry, and what will happen moving forward.

Will be interesting to hear your thoughts

Thanks,

Eric - www.affiliatesupersummit.com

[mojo]

Hi Guys,

We have been reading with great interest regarding the current issues surrounding rogue programs, predatory terms, affiliate unions and boycotting of conferences. Whilst it seems familiar territory that there will always be a contrast of opinion, as an event organizer, what I would like to know is what do YOU think the industry will move towards?

We also heard at EIG the "founding fathers" panels discussion saying that inevitably operators will transcend away from an affiliate acquisition model and look at other methods to attract players, simply due to the rising costs and competitiveness that the affiliate industry is nowadays.

I think that a lot of what we are seeing today is due to the freedom affiliates now have since the demise of CAP. The issues affs are facing now have always been there. However, I notice a lot more attention and reaction due to the need for transparancy that has been allowed us here at the GPWA.

Though it doesn't seem like it right now, I think the industry will move towards a more rational affiliate model with a streamlined approach. Aff programs are all over the place and all of them are different with t/c's etc. I think that aff programs will look at the successful and stable models and mimic them in order to survive.

I have never heard of the founding founders panel. I would like to hear more. If the rising costs of competitiveness is the reason, I can't imagine without affiliates the operators could compete at all. I think it's just a matter of fair terms and a proven track record that will bring affiliates to promote their brand. I may be missing something so I would like to know more on the thought behind that. To get all programs to cease affiliate models would be very difficult and it would make those ops that remain very happy indeed.

A huge part of this industry has several branches earning off of affiliates. Without affs there would be no conferences, at least in that sense.

I don't think some of the aff programs that are failing have given affs a chance to help them back. It's the lack of discussion on solutions with their affiliate partners that is the crux of the problem IMO. No one wants to see ops fail and I believe affiliates would be willing to sacrifice if need be but discussion first is required.

[melaniej]

I think that there are trends and interesting themes for several of these options.

Personally, I've recently been really fascinated by the topic of how operators diversifying acquisition strategies impacts affiliate relationships.

I think in the last year, we've seen a trend of operators increasingly diversifying their investment in various acquisition channels as well as a trend that affiliates have more trust for operators that employ different means of acquiring new players.

This has been very apparent in established and saturated markets like the UK bingo market. Operators who have TV adverts and use different communication streams to attract new players seem able to establish trust with affiliates more quickly.

The other thing that I think (or at least hope) that will become an increasingly visible trend with operators in the affiliate industry is leveraging affiliates as a player retention channel in addition to acquisition channel.

[satya]

Interesting topic Eric! Would like to hear what was discussed at EIG. I missed it this year.

My thoughts -

Most established operators focus on all channels and give equal importance to all the channels - Affiliates, Online Media, SEO, PPC, Offline, TV/Radio. The newer and less established operators depend more on the affiliates and in some cases the affiliate channel accounts for over 90% of the traffic to these operators.

Affiliate Channel roughly account for 30% of the overall traffic in the industry. The operators can't move away from affiliates even if they wanted to. And if they do they will miss out on a particular segment of the market or end up paying a media buyer more to get the same traffic.

Either party has the power to influence the relationship. A lot depends on the relationship and who has the upper hand. An affiliate who is capable of driving 500 new depositing players per month would always have the upper hand with an operator who gets 3-4K new depositing players per month in total. But the same affiliate will not be that strong against an operator who gets 20K new depositing players a month. But if affiliates act in a group, they will be always having the upper hand against any operator.

What the industry may have in store in future -

1)Due to the changes in the industry it is imminent that the % of affiliate commissions would drop.
2)Consolidation on both the operators’ side as well as the affiliates’ side. The balance would still be maintained.
3)Affiliates mentoring newer affiliates and supporting each other.

[Eric A]

I have never heard of the founding founders panel. I would like to hear more.

The session was one of the first panel discussions during the EIG event, with Mark Blandford, Tim Lambe, Adriaan Brink, Dietmar Knoechelmann, Bob Chaill, John Anderson, and moderated by Sue Schneider. It was discussing lessons learned from industry pioneers, and where we are going. During a short part, affiliates were mentioned, but it really got me to thinking about this and to what level we should discuss it at our affiliate summit in Stockholm. Please keep the feedback coming, I think this could be a very insightful discussion!

[ironman2000]

Operators will always have the need for an affiliate program because this brings in large chuck of their revenue every month.

As was said in an earlier post that the larger companies also have the resources of promoting throught such mediums as T.V, Mag's and having their own CEO's etc.

There will always be issues between operator's and affiliates because on both sides of the fence, there will be operator's always looking to tighten their belts and on the other hand,there will always be affiliates out their looking to make a fast buck etc.

We all need to help each other to clean up the industry and limit the damage of rougue operator's & affiliates within our mist.

Have a great weekend to all and just enjoy the roller coaster ride of our industry..........swings & roundabouts period.

Keith