Sustainable affiliate growth strategy - the end of the quantity play?

The feeling that we are in the middle of a sea change for regulated online gambling is stronger than ever at present. Ongoing developments in the UK will impact both operators and affiliates, with the former currently taking centre stage in proceedings while the latter looks on keenly. But the affiliate sector, on both UK shores and beyond, may be undergoing its own period of flux – and for entirely different reasons.

Almost all large affiliates have a deep focus on a single acquisition channel. Aside from notable exceptions like Natural Intelligence for paid search and Checkd Media for social, the dominant channel tends to be organic search. While the full extent of their operations is tricky to pin down, our research suggests that at least 60% of firms on EGR’s Power Affiliates 2020 are heavily weighted towards SEO. Thousands of staff and investors, and hundreds of millions of market capitalisation, are surprisingly dependent on a single source of getting paid.

Modern SEO is increasingly considered a by-product of great digital marketing and product development – as well as the specific set of optimisations that help increase your rankings on Google. SEO in the gambling sector has often felt like a bubble however, insulated from this broadening definition. It has lagged behind other sectors in the way it achieves SEO growth. There is a real feeling that by 2021, the rug could have been firmly pulled and a new era of organic acquisition ushered in.

Google Core Update

Google makes algorithm tweaks on a daily basis but roughly once a quarter, a broader change rolls out – known as the Core Update. We’ve seen a fair few such updates since Google first started announcing them a couple of years ago, and they have usually tended to be zero-sum for the affiliate sector as a whole – winners and losers, jostling about and redistributing the pie. The May 2020 Core Update though has felt more transformative.

Our internal analysis shows that affiliates have suffered an aggregate loss, often at the hands of operators themselves. Some affiliate site networks, operating dozens of sites using very similar approaches, have been dealt large blows. Those that have made gains, in my view, show clear signs of embracing modern holistic SEO, rather than the legacy gambling industry flavour.

Shifting focus

Catena Media’s Q1 2020 interim report reiterated a focus on fewer, high-performance core brands and a continued onus on quality. XLMedia is also working on a “shift from quantity to quality”, with premium websites made the priority going forward, according to new CEO Stuart Simms’ latest market update.

Better Collective now refers to itself as a “sports betting group operating in the entertainment industry”. Being an ‘affiliate’ is great and everything but as a primary label for the industry, it’s quite limiting and tainted by the ways of old.

Long term value

Acquisitions have been a big part of the super affiliate growth story over the past five years but when analysed in isolation, their success has been mixed. Our team looked at 10 prominent SEO-led acquisitions and found that, according to data from competitive insights tool Ahrefs, three increased in value while seven decreased. The aggregate picture was a 55% decrease in traffic value since date of acquisition.

With most large affiliate groups now taking a more conservative approach to picking acquisition targets, affiliates themselves will need to demonstrate longer-term thinking and sustainable practices if they’re still hoping for a lucrative exit.

What does the future look like?

There is little doubt that simple yet effective SEO affiliate sites will continue to perform to a level, particularly in grey markets. The question is, are they simply waiting to be steamrollered some way down the line by more powerful, holistically crafted comparison and media juggernauts? My view is yes, and recent Google developments hint at it not being miles off.

The fundamental change in approach is this: rather than doing what is required to rank organically at this moment and nothing more, affiliates must go above and beyond to satisfy the user, grow their brand and demonstrate quality, insight and real depth in their offerings. To some, none of these points will sound like SEO. That’s precisely why they are so needed and will continue to be the difference makers over time.

Whether this newer approach is led by the big players or fresh-thinking new entrants remains to be seen. Industry titans have a lot of structural advantages, but also existing businesses to run, with cultural and procedural inertia. One thing is for sure though, any delays in adopting a long-term strategy will surely be cause for regret a couple of years down the line.

Luke Eales is founder and CEO at Seven Star Digital, a UK-based gambling comparison company founded in 2016. Seven Star Digital operates a small portfolio of sites including the recently relaunched Compare.bet, which is focused on creating a multi-vertical comparison experience for users in multiple territories.