The value of a modern affiliate goes far beyond the number of first-time depositors they generate in a month. They provide expert feedback, educate new players and are low-risk, as they are paid on performance.
While the importance of affiliates is now being recognized throughout North America, the industry has yet to fully mature.
At present, four ‘super-affiliates’ dominate the US market – Catena, Better Collective, XLMedia and Gambling.com Group. On the surface, they seem to have plenty of competition, both from smaller US affiliates and European affiliates moving into North America.
However, the numbers indicate the four main players have a stranglehold on the affiliate market. Catena reported an 11% increase in the first quarter of 2022 for a record $45.6m revenue, while Better Collective collected $70.8m in revenue in Q1. XLMedia, meanwhile, projects $44.5m for the first half of the financial year.
Smaller US-based affiliate companies such as Media Troopers and Affiliated Sports Fans (AFS) cannot compare to these figures. Media Troopers reported annual revenue of under $5m. This leads to the question: is the relatively new US affiliate market already oversaturated?
AFS Co-Founder & CMO Siska Concannon believes the ‘oversaturation’ idea is a misconception. She says, “There’s not always differentiation in the products produced by affiliates, so many end up competing for the same audience which can be perceived as a saturated market.
“Product differentiation will be the key. Innovation in this space is critical for continued long-term success and ensuring new audiences can be reached.”
Catena’s North America VP Dustin Gouker agrees there is room for competition in the market for those who can differentiate with their product offerings. However, he believes that limited resources will make it harder for smaller affiliates and newcomers.
He comments, “It’s not impossible to break into the US online gambling affiliate industry as a start-up or a European site. But you definitely need to bring a will and money to compete with the largest affiliates, as well as some kind of differentiated offering.”
Common sense says there must be plentiful ‘new and relevant’ audiences yet to be reached in the US. How could four super-affiliates have a ‘quadropoly’ on a market that is not yet fully open?
Gouker concedes that the door for North American affiliates hasn’t slammed shut. He points to the possibility of online sports betting in California, Texas and Florida, as well as the potential for online casino betting in all states currently without it.
BestOdds believes the US affiliate market is ripe for new entrees. BestOdds CEO Will Armitage categorizes his company as a start-up but says it is “seeking to break into the vast landscape of the US affiliate market. We’re aware of the experienced behemoths that have done so much to forge their position of strength in anticipation of the current regulatory landscape evolution.”
So even with the acknowledgment that these ‘behemoths’ exist within the US market, smaller companies are still hungry to get into this action that is still unfolding.
Concannon comments: “Affiliate marketing as a business model is on the rise in the US, with revenues expected to increase 10% year-over-year. The affiliate model is a proven revenue model for operators and affiliates alike.
“It is imperative that offerings are relevant and there is an intimate knowledge of the customer… The American sports bettor is unique; the US has a very different market and audience from any other country. Those that understand this going in are far more successful than those that don’t.”
In other words, companies will have to specialize and adapt. Concannon outlines how AFS is doing this. It is a market disruptor, most easily understood as an engagement solution for those in the gambling and sports industries. The company implements a hybrid marketing and acquisition technique which concentrates on top-of-mind brand management, player retention value strategies, and brand awareness campaigns.
As Concannon explains: “We are invested in not just bringing new audiences to our operators, but in providing personalization at scale throughout these players’ journeys with the operator. This places ASF in a very unique category of its own.”
While ASF is still in its ‘start-up’ phase, it will focus on performance and scale rather than baseline revenue in the upcoming year.
ASF believes its flexibility will allow it to grow exponentially in the near future. As Concannon says, “The benefit of agility will be in our favor as we pivot on the back of insights and performance.”
Agility is key with huge customer acquisition opportunities still up for grabs nationwide. Armitage agrees with this sentiment, saying that BestOdds “don’t hold dear a template to which we feel compelled to abide by… As our hands are not tied we can be more agile and experimental in our business model, which helps with our vision to build a brand which doesn’t have to conform to the norm.”
Armitage says BestOdds “rushed out” the MVP of its company ahead of the last NFL Season to give it data with which to optimize the design of its V2 product. The next iteration of V2 is already in the works for this fall, ahead of the 2022 NFL season. The company will hit the drawing board for V3 next year.
With its unique domain, BestOdds is also planning to launch a BestOdds UK Lite website ahead of the soccer World Cup in the coming months.
Media Troopers CEO Shmulik Segal backs the idea that super-affiliates can be challenged in a dynamic, reactive way. He says that the company’s small size is an asset: “Our size allows us to be faster, more reactive, and provide attentive customer service while creating value for the end customer.
“We are closer to the ground, and use that to our advantage. That’s why we are very big in terms of our delivery, compared to our size – we deliver many millions of newly-registered, newly-depositing players every month. That’s not despite Media Troopers’ size, it’s due to it.”
Gouker, however, questions whether agility will be enough when it comes to pouncing on emerging markets. He comments: “The scale and resources that the largest affiliates bring to bear definitely poses a daunting task to newer sites.”
“We (Catena) are able to bring a large network of national and regional sites to bear on any new market. The strength of our overall portfolio is an advantage, as a handful of sites all have a chance to sit atop the rankings for key search terms at launch. Our revenue is constantly working with operators on pre-live offers, and they have us ready to go as soon as operators want to give a green light for customer acquisition.
“There’s been a lot of consolidation already of these companies swallowing up startups, and I’d actually think we’ll see more consolidation even at the top of the food chain, eventually.”
Whether Catena and other super-affiliates can be dislodged remains to be seen. But all US affiliate players agree on one thing: the landscape is ever-changing and nothing is yet settled.