The event, part of the iGB Webinar series, was hosted by Clarion Gaming’s Curtis Roach. Joining Sue on the panel was Sarafina Wolde Gabriel, Vice President of Strategy at Income Access.
Some of the subjects up for discussion included untenable commercial term requests, how to get the best CPA or fixed deals and affiliate/operator transparency. Here are some of the highlights.
Curtis Roach
Welcome to today’s iGB webinar. In this session we’ll be attempting to bring some clarity to the various aspects that go towards creating a mutually beneficial deal between operators and affiliates. What would you say are the most common circumstances in which you’d find commercial term requests to be untenable?
Sarafina Wolde Gabriel
The basic place to start with any affiliate program is to know your margins and player value. If you don’t know what they are, it’s going to be very difficult to strike a win-win model for your affiliates and yourselves. It used to be the case that people would offer 70-80% Rev Share. Well all know you can’t survive on a model like that. So you need to understand what your values and costs are.
Sue Dawson
In our view untenable requests are for exposure that we know isn’t going to work. For instance, when a deal is made dependent on things like, “will you give us first position on this page” and we know that the traffic to that page is not the right traffic for that operator.
Curtis Roach
When it comes to either CPA or Fixed Fee deals, what would you say are the best circumstances to create either one of those models in a commercial contract or deal?
Sue Dawson
With CPAs, it’s easiest when we’ve already got a relationship with that operator and they want to launch a new site because then they know what the player value is likely to be. We (also) know what the player value is likely to be and there isn’t this conflict.
When we’re working with a new operator we will still usually have a good idea of player value from looking at similar sites we’ve worked with in the past. But it’s really about getting the operator to understand that. And we find that with any requests for premium positioning with a special deal, its best to have an offer that’s exclusive to us because that allows us to give the operator real prominence.
Sarafina Wolde Gabriel
I think knowing…the value of your traffic as an affiliate and also the value of what that operator or brand is worth. And also the marketplace in which you’re working – so if you know that on average a UK player is worth ‘X’ amount of CPA, then you know that you’re going to command that CPA value because you’re bench-marking like-for-like.’
Fixed fees are something that some operators like and others don’t. Those that have a long-term relationship with the affiliate are more comfortable because they know what they’re getting and it’s not exposing them to a high risk element. But those that are brand new…then they tend to offer the fixed fee but with some caveats around it…like a minimum guarantee.
Curtis Roach
Do you think there is enough transparency between the operator and affiliate?
Sarafina Wolde Gabriel
I would say that affiliates that are more transparent with their traffic and value tend to have a stronger relationship with an operator. Vice versa on the operator site, a lot of them don’t share that kind of information because they don’t want to give away their USPs. But it’s good to have transparency with what your program does and what works well because then the affiliates appreciate it. So it’s always good to be more proactive rather than let them do the digging themselves.
Sue Dawson
I’m all for more transparency. The more transparency there is the better you can work together. So in considering what acquisition offer works best…I’ve had the same conversation with quite a few operators now about whether to put a £5 acquisition offer on.
With a £5 offer you’d get a lot of players but they wouldn’t anything like as valuable as the £10 or £20 acquisition offer players. So it’s really helpful to the able to have that conversation with the operator frankly, so that you can decide together which one you’re going to go for and they’re not going to have unrealistic expectations.
Curtis Roach
What would you say are some of the common communication pitfalls between affiliates and operators and how can they be avoided?
Sarafina Wolde Gabriel
It’s really important that affiliates are seen as an extension of the operator’s marketing arm…there is a level of transparency you can give that allows the affiliate to conduct their business more successfully. You’ll quickly fall off the pecking order if they don’t feel that there is an open relationship.
Sue Dawson
Well, there’s the one where we’re contacted by someone who wants to promote their site and they haven’t done any research. So either we’re promoting them already and they haven’t noticed or they haven’t talked to the person responsible. Or it’s a vertical that we just don’t do or it’s a different GEO. So don’t do that!
And then where operators change their offer, move their bingo software to a different platform, they take their landing page away and don’t tell us or they change their terms and conditions and don’t tell us. All of this is absolutely basic communication and if you don’t do that it’s so much harder to work with an operator.
Curtis Roach
What would you guys say are the top three considerations for an operator before agreeing a commercial deal?
Sarafina Wolde Gabriel
Number one comes down to budget. You need to know what your budget is. You also need to understand that affiliate marketing is a long-term game. It’s not something that you do short term so whatever budget you’ve got set aside for your commissions, or for your launch, you need to stretch it to at least twelve months. If you try to just budget for just three months and you don’t hit it and it’s not a profitable program, you’re going to struggle.
The second thing is understand the product. If we look at bingo, you’ve got a lot of loyal players in bingo. They’re not as fickle as sports-betting customers who like to hop around from one site to another. So with bingo there’s the element of longevity.
The third thing is to know your player values so you know what’s sustainable and what’s not sustainable to offer as a commission model.
Sue Dawson
KYC, Trust and Industry Reputation – if there’s somebody that you haven’t worked with before, there may be others who have. So there are all kinds of places you can ask around: Affiliate Guard Dog, GPWA and other forums.
Also, where is the traffic coming from and what impact is it going to have on player value? Are they doing lots of stuff on social media that tends to be of lower value? Are they targeting low deposit keywords, free keywords, any of those things that are going to depress player value? Or are they going for high quality keywords either with PPC or SEO?
Then there’s cash-flow. With a hybrid or CPA, you’ve got to pay for the player up front so it’s going to take some time to see that value. So if you do a deal with someone and they send you a very large number of players, are you going to be able to front the money to pay them and wait for the player value to develop?
Curtis Roach
What actionable tips can affiliates use before embarking on a new commercial deal with an operator?
Sarafina Wolde Gabriel
You need to know how much it’s going to cost you to get traffic and then send that traffic and what channels you are using. As Sue touched on, is it social media, is it PPC?
The next thing to know is what’s the benchmark? Do some research to find out what values a certain vertical is worth and you can then pretty much work out whether that’s a commercial deal you want to structure on a long term basis with a rev share or hybrid model.
Sue Dawson
For affiliates, a couple of basic practical tips. Use an email that’s going to stay the same for the affiliate program, so that if something happens you’re still going to get all the important messages about changes and actions that need to be taken.
Also get the deal in writing at the very least via an email, preferably by some kind of signed document. Things that get agreed over Skype verbally can often just get lost or there can be confusion later about what has and hasn’t been agreed.
The other thing is to look carefully at the deal itself. Is there a trigger that’s bigger than the minimum deposit, so that if you send a player that deposits once and then doesn’t deposit again, will you get paid anything at all for them?
And what happens if someone gets a big win and there’s negative carry over? Will that player be ring-fenced or will it just wipe out everything for months and months.
Host – Curtis Roach – Clarion Gaming
Panelists – Sue Dawson, FTD Digital Head of Content, Best New Bingo Sites Editor
Panelists – Sarafina Wolde Gabriel, Vice President of Strategy, Income Access
You can view the full webinar here: https://igamingbusiness.com/events/getting-your-traffics-worth/
