Don't blame the affiliate
Richard Moffat from affiliate site OLBG tells us why operators shouldn't blame affiliates for poor retention.
Acquisitions have been the primary (sometimes sole) focus for the affiliate departments of UK sportsbook operators, but at what cost? Early on, operators got away with paying far too little for affiliate referrals. They kept pushing for more and more accounts from affiliates, striving for month-on-month and year-on-year acquisition growth.
To achieve this, lifetime revenue share became the norm for affiliates, with ‘fair’ payments across all channels the operator earned from. To maximise numbers, additional CPAs, tenancies, no negative roll over, were often paid, along with aggressive player sign-up offers. At the same time, competition increased and player values were squeezed with lower margins and increasingly savvy punters.
For many, the biggest mistake was over-confidence in their product. Many just didn’t even bother doing the maths, thinking more players equals more profit “ at whatever cost. The acquisition targets were often so high that a blind eye was taken when decent numbers came from cashback sites and even sites actively encouraging bonus abuse. And some operators are still taking these players.
One by one the marketing departments of sportsbook operators are dusting off their calculators and those with the weaker products, which don’t retain, don’t cross sell and don’t monetise well, are finding that the figures don’t add up. At the same time growth rates are falling.
So what now? Pressure partners whom you have demanded send you more and more accounts? Let’s blame them shall we? They’ve had it good, you’ve paid them too much, so let’s just cut their payments.
Maybe if you don’t want anything to do with affiliates again? Affiliates don’t take retrospective changes to terms well; just take a look around the affiliate forums to see that.
If it is not working you have to invest less in acquisitions and more in your product retention and monetisation strategies but you also have to pay what you promised for the players already sent. It’s your mistake, your bad marketing, your inferior product that couldn’t profit from the acquisitions which you asked for. Don’t punish your quality affiliates as you need them now more than you ever have.
OLBG is a leading sports betting community site with a tipster competition and forum. The parent company also runs event specific sites such as those focused on the Grand National and Cheltenham Betting.