SBC News Voice of the Sports Betting Industry
Online gambling is about to reach the halfway mark of a conflicted decade in its relationship with affiliate marketing. 2024 sees the majority of affiliate publishers revise their operating structure to overcome the intertwined challenges of tightening regulation, high media costs, and saturated audiences.
The evolving interplays of affiliate marketing will be dissected at the SBC Summit by Jonas Warrer, CEO of Gentoo Media (formerly GiG Media), a new standalone media business formed from the split of Gaming Innovation Group.
Warrer highlights the importance of diversification in navigating disruptions such as Google’s updates, sees potential for stronger alignment between affiliates and operators, and emphasises the need to focus on robust technology and localisation.
SBC: Hi Jonas, thanks for this interview ahead of the Lisbon Summit. Your panel takes on the daunting task of predicting iGaming’s affiliate and media landscape in the next five years… Why take on this unique challenge? (i.e., why is this subject matter important to industry audiences?)
Jonas Warrer: The industry has experienced significant shake-ups recently. Engaging in dialogue and discussion about our future direction is crucial. By understanding changes such as technological advancements, regulatory shifts, and the evolving dynamics between operators and affiliates, we can actively shape the future of affiliate marketing into a better tomorrow.
SBC: By the time of the Lisbon Summit, GiG’s business will have split into the core units of tech and media, forming Gentoo’s business. What is Gentoo’s new business proposition to markets?
JW: Our overall market proposition remains the same as what we did in GiG Media: Connecting players and operators through helpful content and campaigns that enrich the users when selecting their preferred betting partner.
The change to Gentoo Media has essentially been a rebranding task. Given the spinoff from Gaming Innovation Group, where Platform & Sportsbook will be split away from our media business, we got the unique opportunity to rebrand and shape our own brand identity that reflects who we are and who we want to be in the future.
The rebranding into Gentoo Media draws a circle around everything we think we do well, allowing us to focus on and reinforce those parts. We want to advance the qualities we are known for in the market to fulfill our fundamental principles: Delivering superior results and fostering sustainable, long-term relationships with our partners.
SBC: Observing current affairs, what dynamics are shifting the current relationship between affiliates and iGaming operators?
JW: Industry consolidation and market regulation are factors shaping the industry and will continue to be present. This is nothing new, in my opinion, but something new has caught my attention. It seems that more and more iGaming operators are encouraging affiliates to support their branding and marketing activities beyond the traditional lead generation that affiliates are doing. I predict we will see more of this in the future.
SBC: 2023 and 2024 have seen many iGaming affiliate networks revise their media portfolios – why has maintaining growth and scale become such a challenge for incumbents?
JW: It has indeed been an eventful period looking back. One example is Google, which had a significant core update this year that shook things up. Competition in the industry has intensified, and new and skilled affiliates have joined the marketplace across different continents, typically with a more local focus. For some of the bigger incumbents, I think the challenge has been to have a global reach with a local flair in each market while ensuring high quality across the organisation and the value chain. We believe that strong technology and data are key elements to remaining competitive globally, and we are quite obsessed with EBITDA margin as a metric for how well we are doing.
SBC: Do affiliate networks still offer the best value for acquiring customers to industry operators, or is this discipline being tested?
JW: Of course, I have to advocate for the affiliate channel, which brings the absolute best value to operators. Operators only pay affiliates for the actual value generated through the players that have been referred. Additionally, top affiliate websites drive brand awareness and are a good alternative to more traditional above-the-line marketing, where reaching the correct target audience can be challenging. Moreover, the affiliate channel is the most cost-effective way to promote and drive player intake for new brands with limited advertising budgets.
SBC: Amid a series of ongoing corporate transformations, many networks are revising their revenue models (rev-share, CPA, hybrid) – why is this revision necessary for long-term growth?
JW: We have always been firm believers in the revenue-share model. Around 65% of our earnings come from revenue share arrangements, and most of the players we generate are in deals with a revenue share component (either full rev-share or hybrid). With this approach, we share risk and reward with the operator, and we can focus on building up long-term relationships and growing together with the operators we work with. Not being overly reliant on CPAs also helps us better withstand turbulent periods and seasonality.
SBC: In the first half of 2024, affiliates have contended with a radical change in Google SEO practices and further T&Cs changes across multiple media platforms (Twitch, Facebook, etc.) – how will these media disruptions be settled, and what will the consequences be for stakeholders in iGaming media?
JW: There will always be changes in the market. The last Google update was maybe a bit more radical than usual, but it was essentially nothing we hadn’t tried before. Diversification is the proper approach to dealing with a dynamic marketplace. Many sites should drive revenue, covering many geos and markets and working with a wider scale of operators. The latest media disruptions may accelerate diversification as an overall strategy for actors and stakeholders in iGaming media.
SBC: Focusing on innovation, where do you see iGaming media’s greatest opportunity for disruption – (localisation, automation, latency, audience capture, immersive media)?
JW: Data and tech will remain disruptive forces that can elevate some companies to great success at the expense of others. Data and tech create the foundation for strongly executed localisation. Besides offering insights from other markets, it accelerates automation and centralisation, which ensures competitive cost while at the same time providing valuable insights to create amazing products and media that capture audiences.
SBC: Finally… and most importantly, do you see a more harmonised future for affiliate networks and operators, or is that just wishful thinking?
JW: We are very happy with our relationships with operators, and the operators we work with share this positive view. If I had more time available, I would love to understand the businesses of the partners we work with even better to ensure we support each of their more strategic goals. I would not frame it as harmony as such, but I see a future where affiliates and operators will align even stronger and ensure better long-term partnerships.
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Join the SBC Summit at the Feira Internacional de Lisboa from September 24-26, where 25,000 sports betting and iGaming industry professionals will converge for three days of networking and educational sessions led by over 450 senior decision-makers. Get your tickets now (Early Bird Deal is currently available).
Affiliates can apply for a free pass.
Operators can also apply for a complimentary ticket.
