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7 reasons why affiliate marketing is popular in iGaming
If you’ve ever wondered why affiliate marketing is so popular in iGaming, this article is for you.
The online gambling industry is growing rapidly in numerous markets around the world, providing operators with plentiful opportunities to expand their businesses. Globally, the affiliate marketing industry is estimated to be worth over seventeen billion dollars, and by 2027, it is expected to have grown to over 27.78bn. To take advantage of these opportunities, gambling firms need robust marketing efforts to attract players and establish a presence for themselves. Over the last decade, affiliate marketing has solidified itself as the go-to marketing method for practically all operators in the sector and is continuing to grow quickly.
As the popularity of affiliate marketing keeps expanding in the iGaming industry, it is important for firms and professionals to learn about its benefits and why it has achieved such a level of dominance. In this article, we will cover the key points that make the overwhelming majority of operators choose affiliate marketing, and how you can take advantage of it to accelerate the growth of your gambling business.
Table of Contents
Before diving into the topic of why it has become so popular, let’s quickly explore the core concept itself: what is iGaming affiliate marketing?
What is iGaming affiliate marketing?
iGaming affiliate marketing is a form of marketing that makes use of third-party affiliates to generate traffic or deposits, who then get paid commissions for the quality and quantity of their provided services. This means that operators who use affiliate marketing actually do a minimal amount of marketing themselves, outsourcing the majority to businesses specializing in the process instead.
The part that will have to be done by the operator is the creation of promotional campaigns and accompanying materials, along with the management of their affiliate partners, which involves everything from contract negotiations for partners requesting custom deals, to sending affiliates details about a particular marketing campaign. This can be done in a variety of ways, such as standalone, through iGaming affiliate programs, or through the use of affiliate management solutions, each of which offers a different level of outsourcing and convenience.
Additionally, affiliate marketing also doesn’t cover an iGaming operator’s branding efforts, as companies will need to build their brands, along with the accompanying key elements such as logos, slogans, and other similar items, themselves. While branding doesn’t seem like a challenging task, it can have a measurable impact on the performance of an online casino, which means it is important for operators to establish solid brands for themselves before making use of iGaming affiliate marketing.
On the surface, it doesn’t seem like outsourcing the majority of a company’s marketing operations would greatly enhance its promotional campaigns and their end results, however, there’s a reason why affiliate marketing is so effective and has become the standard in our industry, which we will explore next.
Why is affiliate marketing so popular in iGaming?
The main reason why affiliate marketing is so popular in iGaming is its unbeatable efficacy. Traditional forms of marketing have not been able to generate anywhere near the volume or quality of traffic affiliate marketing has for quite a long time.
But what is the secret behind the efficiency of affiliate marketing? There are a few points, which we will explore next.
1. Payments
One of the first benefits of iGaming affiliate marketing is its payment structure. Affiliate marketing utilizes various commission models, such as cost per acquisition and revenue share, which means that operators don’t have to pay anything upfront, and will only pay for the traffic they received from their affiliate partners. This also ensures that operators will never have to spend more on marketing than what they received from the campaign, meaning that at times it can be less risky than traditional advertisement methods, and that affiliate marketing has a much lower barrier to entry, which is conveniently our next discussion point.
2. Lower barrier to entry
Closely tied to its payment structure, affiliate marketing provides operators with quite a low barrier to entry in terms of the upfront investment required. The only thing that will be required to do before having the ability to reap the rewards of a marketing campaign is the creation of various promotional materials, such as advertisement banners, however, this usually does not cost enough to cause any issues, even for the smallest of businesses. As the operators grow, they may require affiliate management software or solutions to continue growing, but we will discuss this later on.
3. Easy to set up
Combined with our last point, the ease of setup for casino affiliate marketing makes it quite inviting for operators of all sizes. As mentioned in the previous paragraph, operators will need to create their own promotional materials, however, after this step, getting started with affiliate marketing is as easy as contacting a few affiliate marketers specializing in the gambling niche and sending them your company’s details and materials.
Additionally, operators can further outsource their marketing efforts by utilizing affiliate management services, through which gambling companies will be required to do even less work. Instead of having to send each of its partners a copy of its marketing materials, an operator will only need to provide all the necessary information to the affiliate management service, making it even easier for a firm to start advertising through affiliate marketing in iGaming.
4. Easy to optimize
Optimizing spending on casino affiliate marketing is quite a simple task for operators, as it delivers results in a much more timely fashion than traditional marketing forms. All that is needed to do is to assess which affiliates provide the highest quality and quantity of traffic for a given value, and either negotiate with underperforming ones for a better deal or cease working with them altogether. However, operators can also optimize for higher traffic or sales volumes if rapid growth is a priority for them.
Moreover, the ability of operators to greatly optimize their marketing spending to target either the highest possible value or a rapid growth rate also contributes to affiliate marketing’s low-risk nature. As mentioned earlier, iGaming operators utilizing affiliate marketing pay proportionally to the quality and quantity of the traffic supplied by their partners. This means that the possibility of a gambling firm owing more money to its affiliates than what it was able to generate through its marketing campaign is very low, with a commission model like revenue share further decreasing this risk.
5. Easy to target a specific audience
Casino affiliate marketing allows operators to easily target their campaigns to specific audiences, such as those interested in a certain genre of games or those in a specific country or region around the world. Gambling firms can do this by working with affiliates specializing in working with the type of audience they want to target, although even without this it is easy to offer services requiring specific audiences, such as localized gambling opportunities, thanks to the nature of iGaming affiliate marketing.
Moreover, this is also an excellent benefit for international operators and gambling firms offering a wide variety of game types and experiences, as they can utilize targeted campaigns to grow a specific operating segment. This is quite useful for iGaming operators who are looking to introduce new offerings to their websites or expand to a new operating jurisdiction as well, helping their new segments get up to speed in a timely manner.
6. Higher profit margins of gambling products
While this may seem similar to our previously discussed point of a lower barrier to entry, this time we’re focusing on the low costs associated with delivering gambling services to individual users. Gambling businesses do have to invest a significant amount of time and money into their businesses to get them up and running, no matter whether they design and license their own in-house gambling backend systems or incorporate an iGaming platform solution, such as a white label platform. However, after these costs are accounted for, even operators that utilize platform solutions that involve a revenue share payment structure have a sizable profit margin that allows them to offer revenue share rates of up to 50% and more. Not many other industries can replicate this, as most other products and services, especially physical goods, have tighter profit margins which lead to much less lucrative commission structures. Because of this, the online gambling industry is quite well suited for affiliate marketing.
7. Limitless expansion
Another great aspect of iGaming affiliate marketing is the expansion opportunities it provides. Operators can very easily scale their affiliate marketing efforts by simply partnering with more and more affiliates. This retains all of the benefits of casino affiliate marketing, such as the easy set-up process, proportional payment structure, and effortless optimization capabilities, and is in theory only limited by the number of iGaming affiliates existing in the sector targeting a particular set of gambling experiences and jurisdictions around the world. In today’s rapidly growing online gambling industry, that number is practically limitless for the vast majority of operators.
However, in practice, working with an ever-expanding network of affiliate partners is not the easiest task in the world, as it introduces a challenge in the form of managing affiliate partners. While this only applies to larger operators who work with hundreds of affiliates, it still is a downside for a portion of gambling businesses. Fortunately, the majority of affiliate marketing’s flaws, including management challenges, have easy solutions, a number of which we will cover next.
The few drawbacks of affiliate marketing and how they can be solved
Regarding affiliate marketing for iGaming, there are advantages and disadvantages to take into account. Although the neighborhood has many benefits, it is not without flaws and has some drawbacks as well. Thankfully, there are simple fixes for its most prominent issues, which we will start exploring with the one mentioned in the last paragraph, management challenges.
Management
As an operator’s affiliate network grows, so do its responsibilities of managing its affiliate partners. As mentioned previously, this doesn’t apply to smaller businesses, however, it can be quite a hassle for larger ones and, most importantly, can effectively eliminate affiliate marketing’s limitless expansion opportunities, which we presented as one of its benefits not too long ago. Fortunately, this one has a simple solution that takes the form of iGaming affiliate management services. Through these offerings, operators can outsource an even larger portion of their marketing efforts, as they won’t have to constantly monitor and communicate with their affiliate partners. This can be beneficial for smaller businesses as well, as affiliate management services can help operators free up more of their resources to allocate to their core operations. You can learn more about it in our in-depth guide on iGaming affiliate management.
Fraud
While fraud can be a concern for traditional marketing, it is much more prevalent in the affiliate marketing space. Fraudulent affiliates may try to artificially inflate their performance metrics to extract money from their partners in an illicit way. iGaming affiliate fraud has many negative side effects for unsuspecting operators, however, implementing rigorous traffic monitoring systems and only collaborating with reputable and experienced affiliates will be more than enough to mitigate the risk of fraud for the vast majority of operators. Check out our dedicated article on iGaming affiliate fraud if you’re interested to learn more about the topic.
Material Placement
While iGaming affiliate marketing provides operators with an excellent degree of control in most areas, one place where gambling firms have a bit less control is the placement of their promotional materials. A situation where this could be a concern is if an iGaming affiliate, particularly a lower-quality one, displays the materials of one of its partners in a way that is annoying for the visitors of its website, which could lead some potential players to perceive the affected operator negatively. Fortunately, this is not a common occurrence in the iGaming industry, although the vast majority of the industry’s operators define a set of guidelines for the placement of their materials to ensure their brands are represented appropriately.
How to get started with iGaming affiliate marketing?
Now that we learned about iGaming affiliate marketing, its benefits, and its drawbacks, let’s take a look at how you can start taking advantage of it for your business today.
Getting started with affiliate marketing is quite simple. As we covered in this article, acquiring appropriate promotional materials for your business is the first step. After this, all your business will have to do is contact any prospecting affiliates. While this step is also quite easy, finding reputable affiliates to work with may be a bit more challenging. However, if you ask your network for recommendations, or look for companies on trusted sources, such as AffPapa’s affiliate directory, you will find a good partner in no time.
Additionally, it is also possible to get started with affiliate marketing through the use of an iGaming affiliate management solution. While many of them involve sizable periodic fees, they usually offer their clients a specific amount of recurring reach-outs, which can be an excellent way of scaling a gambling business of any size. This is especially true of affiliate management solutions offered by affiliate directories, as they will have a collection of high-quality affiliates to expand their clients’ partner networks with. Utilizing these services, operators will only need to create their own marketing materials, which will further reduce the time it takes for them to grow.
Following this, your business will start growing at pace and you will soon require iGaming affiliate management services or software to streamline the affiliate marketing process. However, affiliate management solutions will also help your company continue expanding rapidly, growing your affiliate network with ease. To further aid in the expansion of your business, you can also cater to other gambling types with additional brands, which you can deploy through an iGaming affiliate program.
Closing Thoughts
Affiliate marketing is a powerful tool, and it is no surprise that it has been able to dominate the iGaming industry, thanks to the numerous advantages it provides. It is not perfect, however, its downsides can be taken care of by simple solutions that don’t take away from its upsides. With careful planning and execution, affiliate marketing can elevate your iGaming business to the next level and allow it to grow at pace.
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