Is Affiliate Marketing Broken in iGaming?

Another doom and gloom post but it comes on the back of having spent the past week at SiGMA World in Rome, Italy.

So here are 3 points I can share as discussions that came about this week.

1. Bigger affiliates quietly acquiring more big sites

2. More affiliates feeling the SEO squeeze

3. Broken revenue models for affiliate marketing in iGaming

4. AI & automation is waiting for you

I'll start with the first one which is info that I don't think I can share. I know of one big site that was acquired this year and someone told me the same acquiring company picked up another big site.

Quick shoutout to StatsDrone since we are the only sponsor currently but you know you wanna change this ;)

I'll throw in another quick shoutout to Wojtek Sznapka and Line Ho Young Peteri from Gamblitude who are building some unique dataviz and analytics tools for iGaming.

Not all M&A transactions are public which is something that public companies disclosed but private companies don't always want to share either.

The implications of these large M&A acquisitions are the dominance of traffic.

Thanks Mark McGuinness iGaming Gen AI 🤖. for the pic!

I did a panel on why online casinos close and one topic I didn't talk about is the erosion of the affiliate marketing channel. That is, when you deal with giant affiliates that demand the highest revenue share and CPA deals, the end result is likely no profit made from these deals traded off for branding exposure.

Flat fee deals and listing fees can eat up any budget fast. I found that most casinos close within a year based on data from AskGamblers and LCB Network.

More affiliates feeling the SEO squeeze

I have talked to some affiliates that think we have a good opportunity in front of us and maybe this is where I see polarizing opinions.

I had the chance to briefly chat with Trifon Boyukliyski and Néstor Vázquez and I'll admit I didn't get to ask them yet if they think this is a great time to be an SEO and an affiliate. I'll have to ask but when I interview SEO experts, they tend to get more excited at the opportunity.

On the opposite end of the spectrum, affiliates that are getting hit are trying to understand what is happening. I think their unusual disadvantage is by not seeking out SEO experts to get a better understanding of what they can change.

I did have a chance to sit in a wildly unique panel on SEO and the AI pivot in iGaming which had some of my peers all in one place. Those people being Mark Flores Martin, Sean Bianco, Staffan Engström and a new contact in Kurt Rapinett.

I would likely need another newsletter to do a deeper dive into the topic but my summary of the discussion is this. There are endless possibilities when it comes to SEO and AI and you can go deeper into the rabbit hole. This is why I think pure SEO pros are seeing the opportunity rather than being scared.

Broken Revenue Models in iGaming

Another theme that repeated itself during the conference was the broken models we have today that look something like this.

The smaller affiliates that operators get better margins from are disappearing fast and being replaced by big affiliates that offer almost no substantial margin. That is bigger volume of traffic but next to no profit. I bet some operators don't even realize their deals are negative for them.

This topic did come up in the affiliate tracking panel that featured some of the brightest minds in affiliation. Those being Marcin Kumiega, MBA, Clemence Dujardin, Nataliia L., Mex Emini, Joe Hatch and Clinton Cutajar.

AI & Automation

This is happening in almost all convos. We spent enough time talking about it with everyone especially Mex Emini where we talked about a single product like n8n. With others, Lovable came up quite a bit and on my side, I was sharing how much more time I'm spending on Claude.

My Opinion on the Future of Affiliation

I think we will see more affiliates come from social channels and we'll see more products.

Players still want to play online casinos and other products, they'll just find a different way to get there. It might involve affiliation but perhaps not as much as it used to be.

That said, I still believe the predictions are true that affiliation will always be in stage of growth.