GPWA Times Magazine - Issue 25 - June 2013

From the GPWA Forums #5 Louis - Income Access (Sponsor Affiliate Program) I think clarity of communication is vital. Not just when wanting to make a change, but when setting up a deal as well. So many times I have seen deals agreed to where the affiliate thinks it’s X% for life and the operator thinks it’s X% for as long as the deal is profitable to do so, and neither states their assumptions clearly when the deal is made. I think signing a proper IO with the commission terms completely clear is a huge step for legitimizing affiliate relationships. I encourage affiliates to do this when setting up important deals. I also think, from the standpoint of an intermediary, that it’s great to see an affiliate acknowledge that operators have it difficult as well. The market forces of affiliate marketing are such that commissions will always bid their way up to the limit of a gambling operator’s operating margin. We need to recognize that iGaming affiliate marketing is a mature industry and as such, advertisers are naturally going to be paying the limit of what their margins allow. When new costs come into play, operators are going to need to reduce commissions or lose money. Affiliates are never going to like getting a pay cut, but if we can clearly define what is acceptable and what is not, we can help make this industry function better. Reply With Quote #9 Louis - Income Access (Sponsor Affiliate Program) I would like to ask affiliates and operators how they think operators can effectively prevent affiliate rakeback schemes, specifically where a player (or group of players) sign(s) up as affiliates in order to earn rev-share on their losses, while not actually generating any significant promotion for the brand. I know this is one of the principal concerns of brands that try to implement quotas, as this scenario represents cannibalization of revenues and a potentially large loss of the revenue from a player that was truly acquired through other marketing expenditures. One solution to this is to be extremely diligent in the affiliate application review process, and not let in affiliates unless they have legitimate traffic. However, it can be difficult to truly evaluate an affiliate before working with them, so most brands tend to want to let affiliates into the program to see what they can do. Thus this is not an ideal solution. Any thoughts on the best way to handle this? Reply With Quote #10 universal4 (Security/Membership Team) In my opinion, having any kind of quota is NOT affiliate friendly. If a program doesn’t want affiliates to participate in rakeback schemes that they do not control, then have terms stating affiliates lose their accounts and commissions if they do participate. In most cases, I would think that non-rakeback affiliates would be happy to notify programs of any affiliates that do participate. Once an affiliate is reported, they could be given the ultimatum, stop or lose the account. You made some good points about the review process, and I think those are good things to do also, but if it isn’t spelled out in the terms, and if it isn’t enforced, affiliates will assume it’s OK and the problem will only get worse. Reply With Quote #6 universal4 (Security/Membership Team) So many times I have seen deals agreed to where the affiliate thinks it’s X% for life and the operator thinks it’s X% for as long as the deal is profitable to do so, and neither states their assumptions clearly when the deal is made. Part of the problem with this thinking is that many times the terms of service as well as the home pages and marketing material of the affiliate programs will have the words LIFETIME COMMISSIONS blasted all over them and when this is the case there is no question as to the assumed length of the “deal.” Any kind of private deal made with affiliates should not be made without the “term” CLEARLY defined. Also, changes after the fact (retroactive) are NEVER acceptable. Thank you, Louis, for being willing to enter into such conversations intelligently and for helping affiliates gain some insight into the other side. Reply With Quote 17