iGB Affiliate 23 Oct/Nov 2010 by iGaming Business

oct/nov 2010

In Memory of The Captain, The Professor and Spearmaster

INFORMATION, INSIGHT AND ANALYSIS FOR THE BUSINESS OF INTERACTIVE GAMING

The adventure begins. big screen cinematic experience with every spin.

www.microgaming.com/LOTR

CASINO | POKER | BINGO | NETWORK GAMING | MOBILE

CONTENTS 06 Affiliate Events Calendar 08 Webmaster News 12 Increasing your Earnings Using Existing Traffic 17 The New Caffeine-Related Variable Position Filter 20 International SEO Strategies 25 Interview: Randy Layman, CEO, Felt Marketing 26 Affiliates and US State Licensed Internet Gambling 28 The Psychology of Online Poker 31 Interview: Malcolm Graham, CEO, PKR 32 In Memoriam: Allan, Lou and Ted 38 The Business Model and Philosophy Behind Casual Games 41 Operators: How to Inform, Innovate and Reward for Optimal Results 42 Market Insight: Spain 46 Market Insight: Italy 47 Market Insight: France 48 Peace, Love and Advertising: A Tale of Bonding Between TV and Affiliates 50 Getting off the ‘No Growth’ Plateau 52 Diversification as Business Insurance (Don’t Keep your Eggs in one Basket) 54 Eight Simple Rules for Email Marketing Campaigns 56 Branding Tips for Affiliates 58 Google’s Trademark Change: Episode Two 59 Brand Integrity: How to Build it with Twitter 60 Give 15 Minutes of Player Fame to Make your Brand Famous 63 SEO and CRO: How your Website can Succeed 64 Market Place 66 Preparing for the Web Traffic Deluge from a Regulated US Market

It is with a heavy heart that we say goodbye to The Captain, The Professor and Spearmaster. We have lost three people that loved this industry, and helped make it the success it has become. We all owe these men a great debt of gratitude and I assure that this very magazine wouldn’t be the same without thier pioneering contribution to the industry. This issue is a tribute to these three

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visionaries, all of whom had passed in the last 60 days. But Spearmaster Ted Loh’s passing was just before our print date, so we were unable to put together as full a tribute as is deserved. Because of that, I would like to use this editor’s letter to express my sadness over his passing. Ted was one of the good guys. He was a stand-up colleague and more importantly, a stand-up friend throughout the last tenplus years that I have known him. Ted was

genuinely happy to help me every chance he got, and it was always great to see him. I made sure that I had some ‘Tedtime’ at each conference we attended together and I was lucky enough to get extra ‘Ted-time’ at G2E 2009 when we arrived in Vegas a few days early. If there was ever a guy that brought a smile to my face it was Ted, and I will miss him, not just as a colleague, but as a valued friend. Michael Caselli, Editor in Chief

Editor in Chief: Michael Caselli

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Published by: iGaming Business,

Printed in the UK by: Pensord Press, www.pensord.co.uk

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London EC1V 0BB, UK. The views expressed by contributors and

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magazine are not necessarily those of the Publisher.

Richard Wanigasekera richard@igamingbusiness.com

published by iGaming Business Limited of 33-41Dallington Street, correspondents are their own. Editorial opinions expressed in this The Publisher does not accept responsibility for advertising content. Cover image: istockphoto.com ISSN: 2041-6954

iGB Affiliate october/november 2010

London Affiliate Conference 27th - 30th January 2011 Old Billingsgate, London www.LondonAffiliateConference.com

Join us in London for the biggest event in the iGaming affiliate market! Our legendary London event is back for its 5th year. LAC promises you: Two in-depth conference streams â&#x20AC;&#x201C; one designed especially for beginners Great speakers from the industry and beyond Exhibition with over 80 exhibitors The Affiliate Series of Poker returns, $20,000 worth of prizes to be won Live URL auction on the exhibition floor The iGB Affiliate Awards- all new for 2011 Lots of networking opportunities and great parties at Londonâ&#x20AC;&#x2122;s hottest venues 2,500+ delegates expected

TES AFFILIA REE COME F

Who Will Win? You Decide. The Fourth Annual iGB Affiliate Awards Thursday 27th January 2011 The Brewery, London Now in its fourth year the awards have been revamped to ensure their integrity and to give you the best possible night. This elegant black tie event has sold out in both 2009 & 2010 so book today to ensure your attendance at this must attend event.

New for 2011 • A Smaller Number of Awards - This year will see a total of 14 Awards (reduced from 23) to allow for a more comprehensive judging process ensuring the integrity of the awards is upheld • New Award Categories - New pioneering categories specifically for affiliates (e.g. Best Innovation, Best Newcomer) to allow a more even mix of participants • Premium Venue - This year’s awards will be hosted at an exclusive, 5* venue which is sure to impress • Professional Compere - Award winning comedian, Adam Bloom, will present the awards and keep you captivated throughout the night • More Networking - More time to socialise following the awards ceremony, giving you time to celebrate and congratulate the winners

www.iGBAffiliateAwards.com

affiliate events calendar Due to their popularity and wealth of information, analysis and discussion, conferences have become an integral part of the affiliate industry and a key communications bridge between affiliates and affiliate managers. Whether used for networking, education or just an excuse to meet up with friends, the affiliate conferences listed below provide all the tools you need to improve your business.

Sport & iGaming Pinsent Masons, London November 10, 2010 Summary: The leading information providers in the sport and iGaming industries, SportBusiness Group and iGaming Business have allied themselves to develop a new conference – Sport and iGaming 2010 to be held on November 10 in London. For the first time, a conference will take a detailed look at all aspects of sport and iGaming – the legality, the ethical risk, the evolution of offline to online betting, the success stories, the data behind the campaigns and the future of this industry. This event will be of interest for anyone looking to find out how to better activate their sponsorships and for rights holders looking to help sponsors achieve this and offer attractive sponsorship packages.

iGB Scandinavian Affiliate Super Summit Stockholm, Sweden Nov 30 – Dec 2, 2010 Summary: The second annual iGB Scandinavian Affiliate Super Summit will hope to build on the success of last year’s launch and is back with a brand new business networking concept. The Scandinavian market is a highly lucrative online gaming market, and the iGB SASS gathers top operators, super affiliates and, of course, rising stars for days of networking, business, benchmarking and partying. The new concept will include ‘Impressive Ingrid’, Elves, Smorgasbords, Saunas, business, Lucia in the (hopefully) snowy landscape of the Capital of Scandinavia, Stockholm. www.affiliatesupersummit.com

www.sportandgaming.com

a4uexpo ICC Excel London, United Kingdom October 12 – 13, 2010 Summary: The a4uexpo is Europe’s largest performance marketing conference with over 1,000 delegates and 48 diverse conference sessions. This year also includes an extravagant all-inclusive middle evening party, a pre and post-event networking bash, plus an expo hall and drinks reception all being shared with the leading entrepreneurs and players within the dynamic £10 billion affiliate and performance marketing industry. www.a4uexpo.com/london

London Affiliate Conference (LAC) Old Billingsgate, London January 28 – 31, 2011 Summary: An event that needs no introduction due to the huge success of previous years, the LAC has been the flagship event on the affiliate conference circuit since its inception in 2007 (then as CAP Euro). An all-encompassing expo and conference delving into the very latest issues affecting all aspects of the iGaming and affiliate market sectors, LAC 2010 promises to be the best attended and best prepared event to date. www.londonaffiliateconference.com

iGB Espana Melia Avenida America Madrid, Spain November 5 – 6, 2010 Summary: The second annual Spanishspecific event returns to the conference circuit this November, hoping to capitalise on what was a sensitively organised and impressively successful first outing in 2009. The conference section will update attendees on the very latest in legal, regulatory and operational fronts in the Spanish market and offer insight into the intricacies of serving and supplying into this unique and promising region. For sponsorship opportunity contact: Richard@iGamingBusiness.com. For general enquiries and information: Marit@iGamingBusiness.com www.igbespana.com

iGB Affiliate october/november 2010

webmaster news

Sportingbet Enters NonProsecution Agreement with US Sportingbet has announced that it has entered into a Non-Prosecution Agreement with the Office of the United States Attorney for the Southern District of New York (SDNY), who will be acting on behalf of the US Department of Justice. The agreement will secure Sportingbet against federal prosecution with regard to its US-facing Internet gambling operations between 1998 and 2006 and will cost the sportsbetting operator $33 million (£21.3 million) payable in three instalments: ●●$15 million (£9.7 million) payable on or before September 30, 2010 ●● $12 million (£7.7 million) on or before September 30, 2011 ●● $6 million (£3.9 million) on or before March 31, 2012

has remained mindful of its obligations to all stakeholders of the Group. The resolution of any risk associated with Sportingbet’s former US-facing business, combined with the considerable actions taken by the Group over the past three years, ensures that the Group is well placed to capitalise on the many opportunities available in the global

online gaming industry.” In addition to the staggered payment plan, Sportingbet has also agreed to cooperate with SDNY and disclose information relating to its former iGaming business in the US, whilst agreeing to adhere to further obligations with respect to its future conduct in the United States.

Andrew McIver, Sportingbet’s Group Chief Executive, explained, “This settlement enables Sportingbet to draw a line under events of the past. It is in the best interests of our shareholders and we can now look to the future with increased confidence “The process has been complex and has taken a considerable amount of time. Throughout these discussions, the Board

South Africa in iGaming Roadblock Operators and players in South Africa convicted of breaking the law could now face a maximum fine of $1.3 million and up to ten years in prison after a court in South Africa recently ruled that all forms of online gambling are now illegal. With the exception of wagering on horseracing, all forms of gambling were banned in South Africa in 1965 with the government allowing a limited number of casinos to open in its homeland areas in the 1970s. These ‘homelands’ were akin to the reservations seen in the United States with casinos only allowed to serve South African citizens. Following the election of Nelson Mandela as President in 1994, these special areas were incorporated into the rest of the country and land-based casino gambling became legalised. Online gambling in South Africa is estimated to be worth up to $136 million a year and the administration of President

iGB Affiliate OCTOBER/NOVEMBER 2010

Betfair Confirms IPO on LSE Jacob Zuma had been looking to licence, regulate and tax the industry through the proposed National Gambling Amendment Bill. The government was awaiting the publication of a special report into online gambling by its Ministry of Trade and Industry before proceeding but the North Gauteng High Court intervened to institute a total ban. Under the new regulations, Internet service providers in South Africa are responsible for blocking access to online gambling sites while financial institutions are prohibited from processing transactions to and from banned domains. “We approached the media to alert them of the judgement, which makes online casino operations illegal,” said the ironically named Lucky Lukhwareni from South Africa’s Gauteng Gambling Board. “And, if they continue, we will have them arrested and fight for conviction.”

As widely forecasted, Betfair has officially announced its intention to seek a listing on the main market of the London Stock Exchange. The IPO will include the sale of a minimum of ten percent of existing shares to institutional investors in the UK and abroad although Betfair has stated that it is not raising any new money and won’t be selling any of its primary shares. In announcing its intention to list, Betfair also published its results for the year ended April 30, 2010, along with a trading update for the first quarter of the current year. In the three months to the end of July, Betfair’s core business increased its revenues by 22 percent to £86.3 million with sportsbetting revenues rising by 24 percent. The company reports £150 million of cash and no debt on its balance sheet.

GamCare President Passes Away Former Labour politician and President of GamCare, Andrew McIntosh, one of the men responsible for helping to successfully steer 2005’s Gambling Act through Parliament, has died at the age of 77 after suffering from cancer. A market researcher by profession, McIntosh was elected to serve on Haringey Council, which had been formed by the amalgamation of Hornsey and Tottenham in North London, in 1964 and went on to represent the area until 1983. McIntosh was elected leader of the

ASA has Digital Remit Expanded Greater London Council in 1980 after ousting his Conservative rivals and was made a life peer in 1983 on the recommendation of Michael Foot, becoming Baron McIntosh of Haringey. He served as Prime Minister Tony Blair’s Deputy Government Whip following the 1997 election that brought Labour into power and was made the Minister responsible for gambling in June of 2003 in a shuffle that split Sports Minister Richard Caborn’s responsibilities at the Department for Culture, Media and Sport.

Playtech Reports Healthy Finances Playtech has released its financial results for the six months to the end of June showing a 31 percent year-on-year increase in gross income to 87.9 million. The firm stated that its adjusted earnings before interest, tax, depreciation and amortisation for the six-month period rose 20 percent year-on-year to 54.2 million and reflected a margin of 62 percent on gross income compared to 68 percent for the same period in 2009. Playtech stated that its total revenues for the period were up 29 percent year-on-year to 72.9 million while its net profit after tax came in at 37 million, which was up from 32.5 million for the first six months of 2009.

The company revealed that it generated 60.8 million in cash from operating activities over the first six months of 2010 compared to 37.4 million for the same period in 2009, while stating that August had seen gross royalties grow by more than four percent in July with “casino up over five percent and both poker and bingo in positive territory”. “We have enjoyed a strong trading performance in the first half,” said Roger Withers, Non-Executive Chairman for Playtech. “Regulatory change across Europe is transforming the market dynamics and opens up many new opportunities.”

Blanca Gaming Purchases Cereus Poker The Cereus Poker network, home to Absolute Poker and Ultimate Bet, has new owners. The Antigua based Blanca Games has purchased the network, complete with both Absolute Poker and UB, for an undisclosed sum. Stuart Gordon, Chief Executive Officer of Blanca Games, said, “The acquisition of Cereus is a significant opportunity for us. Cereus is a major platform of wellmanaged assets. Over the past few years, it has created new brands, like ub.com,

that are extremely well-positioned in the most desirable demographic in our market: players in the 20s and 30s age brackets. From our perspective, we have acquired a large, sophisticated online gaming operation with state-of-the-art capabilities, ranging from compliance to business intelligence to online marketing to customer service. We see a tremendous growth opportunity in this deal and beyond, as Blanca seeks additional acquisitions in the market.”

The UK’s Advertising Standards Authority (ASA) watchdog has had its digital remit extended meaning that from next year, it will be responsible for monitoring online advertising and marketing campaigns. According to a statement from the organisation, its present online remit includes only adverts in paid-for space alongside sales promotions wherever they appear. However, this will be extended from March to apply in full to online marketing communications including the enforcement of rules relating to misleading advertising, social responsibility and the protection of children. The ASA stated that the new guidelines will apply to “all sectors and all businesses and organisations regardless of size”. “This significant extension of the ASA’s remit has the protection of children and consumers at its heart,” said Chris Smith, Chairman for the ASA. “We have received over 4,500 complaints since 2008 about marketing communications on websites that we couldn’t deal with but from March, anyone who has a concern about a marketing communication online will be able to turn to the ASA.” Journalistic and editorial content alongside material related to causes and ideas with the exception of direct solicitations for funds are to be excluded from the ASA’s new remit while the watchdog will have the power to remove paid-for search advertising and, in some cases, replace it with an advert outlining an infringer’s non-compliance. “Extending the online remit of the ASA has been a top priority for the UK industry over the last couple of years,” said Andrew Brown, Chairman for the Committee of Advertising Practice (CAP). “Our aim has been to extend further in the online world the principles that are already well established in our system, namely those of effective consumer protection and fair competition.”

iGB Affiliate OCTOBER/NOVEMBER 2010

webmaster news

Online Accounts for William Hill Profit Increase More from the world of financial reporting as William Hill’s financial results for the first six months of 2010 reported a three percent yearon-year rise in net revenues to £529.9 million. The company revealed that its overall results were helped by a 24 percent year-on-year increase in net revenues from its online operations to £124.2 million while it also experienced an “outstanding football World Cup offset by poor horseracing results”. A year after formation, its William Hill Online division had “continued to strengthen its competitive position” while “further developing a market-leading sportsbook and providing a high-quality gaming experience”. The branch reported a 38 percent year-on-year rise in new accounts while the number of unique active players grew by 20 percent when compared with the same period in 2009. Net revenues for William Hill Online grew by 24 percent compared with the same period in 2009 helped by the performance of its sportsbook, which saw in-play betting double with turnover increasing by 59 percent year-on-year. “In addition to outstanding topline growth, gross win margin on the sportsbook was almost one percentage point higher at 7.7 percent, benefitting from both structural improvements and the favourable World Cup results,” read a statement from William Hill. The firm revealed that net revenues from its online sportsbook grew by 77 percent compared to the first six months of 2009 while those from gaming increased ten percent year-on-year. It stated that, within this, bingo continued to “grow rapidly” and reported a 52 percent year-on-year rise in net revenues while poker declined by five percent “reflecting continuing industry trends”. “This is a positive first-half performance driven by William Hill Online and, in particular, a very strong sportsbook,” said Ralph Topping, Chief Executive Officer for William Hill.

iGB Affiliate OCTOBER/NOVEMBER 2010

Payment Processors Agree to Forfeit $13.3 Million Federal prosecutors in the United States have reached a civil settlement with two payment processors and their owner that will see the defendants forfeit $13.3 million that was allegedly traceable to online poker sites including PokerStars.com. Ahmad Khawaja and his Allied Systems Incorporated and Allied Wallet Incorporated firms reached the settlement following a year-long struggle that began when the United States Attorney’s Office for the Southern District of New York, seized the funds in June of 2009. According a report from Forbes.com, the civil forfeiture complaint alleged that the funds constituted the proceeds of operating an “illegal gambling business” and were deposited in an account at Goldwater Bank in Scottsdale, Arizona, between January and May of last year. Federal officials contended

that the cash was traceable to PokerStars. com and other offshore online gambling firms and included “proceeds of the illegal transmission of gambling information and operating an illegal gambling business”. The attorney’s office stated that the funds were linked to allegations of money laundering as some of the cash was traceable to wire transfers made from outside of the US by individuals who knew that the money “represented the proceeds of the illegal transmission of gambling”. “PokerStars.com does not condone efforts by processors to conceal the nature or purpose of funds used to play online poker,” read a statement issued by PokerStars.com. “PokerStars.com has taken steps to ensure that processors properly disclose the nature of their business to their relevant financial institutions.”

PokerStars Signs Canal+ Deal for French Market PokerStars.com has announced the signing of an agreement with Canal+ that will see it sponsor some of the leading French television channel’s sports programming. According to numerous sources, the deal will see the online poker giant sponsor tennis tournaments on Canal+ including the US Open, Shanghai Masters, BNP Paribas Masters and London Masters in addition to the recent Basketball World Championships from Turkey. The deal follows PokerStars.com finalising a similar agreement in late-June with the Spanish basketball association, the Federacion Espanola De Baloncesto (FEB),

to serve as an official supporter for the next year. “Our, client PokerStars.com, is very proud to become sponsor of the Federacion Espanola De Baloncesto,” said Juanjo Marquez, a representative for PokerStars. com in Spain. “Being a global brand, this is a significant opportunity to join a leading sport. PokerStars.com sponsors numerous teams and sportsmen of international standing and being able to cooperate with the world and European champion is an exciting project by which to convey values like excellence, competition and fair play.”

US Prepares Ground for Super Wi-Fi The US broadcasting regulator, the Federal Communications Commission (FCC) has declared that it will free-up unused television airwaves for the new ‘super Wi-Fi’ technology which will see signals travelling longer distances and be able to manage sizeable data transfers. The Commission has described the dormant space between television channels as “prime real estate” for mobile devices

and hopes that the super Wi-Fi technology will turn significant portions of the country into giant Wi-Fi hotspots. In a statement, FCC Chairman, Julius Genachowski said, “It will enhance our economy and strengthen our global competitiveness, lead to billions of dollars in private investment and to valuable new products and services – some we can imagine, and many we can’t.”

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traffic

No Earning Opportunity? Let me increase your earnings by more than 50 percent using only your existing traffic!

I know it is hard being a full-time gaming affiliate, but then again, no one said it would be easy. You took the decision to pack in your ‘9-5’, took the gamble on not having a salary every month, but balanced that against being your own boss, working your own hours and being directly responsible for the financial rewards that you bring in. In the early days it was great. America was ‘open’, the players were available everywhere, we had much less competition, Google allowed PPC advertising at five cents per click and every other player seemed to be a VIP. It makes me think, “We never knew we had it so good!” However, since then things have changed. We have much more competition and Google may or may not let you advertise depending on who you are,

iGB Affiliate october/november 2010

where you want to get players from and the casinos you work with. And all the time you’re seeing a decrease in the conversion of those visitors you do get, through to players! In addition, the operators themselves are having a hard time. It seems that every country in Europe is licensing a ring fenced country-specific network which means decreased player liquidity, increased brand building and marketing costs for the operator and more ‘tax, tax, tax’ with less ‘profit, profit, profit’. It’s happened in France; it’s happened in Italy and would appear to be in the process of replication in other EU territories. A side effect of all this is often a reduction in the rewards you would previously get from sending players to the operators. If the operators aren’t earning as much, I don’t think we can

blame them for not paying us as much. When you balance this European nightmare with reduced conversions and the realisation that all those revenue share players you already have in Europe are likely to be lost due to new licensing regimes (meaning they will have to make their choice of casino all over again from the new licensed operators) and considering the deep penetration that operators already have leading to direct acquisition routes for the brand owners, what is an affiliate to do? We all focus on ‘SEO this’, ‘PPC that’ and everything you do in these areas is wise, but does it help solve the core and fundamental issues within our businesses and the changing environment in which we operate? Let’s look at our businesses and assess where we ‘leak profit’ so we can plug these

Table 1

Table 2

Position

Percentage of Clicks

Reward per player

Position

Traffic

34.35%

Operator A

$130

34.35%

16.96%

Operator B

$120

16.96%

11.42%

Operator C

$100

11.42%

7.73%

Operator D

$75

7.73%

Table 4

Table 3

Reward per player

Conversion Rate

ERPC

New Position

Operator A

$130

0.5%

$0.65

$202.80

Operator B

$120

$1.20

$85.50

Operator C

$100

0.75%

$0.75

$69.30

Operator D

$75

1.2%

$0.90

Reward per player

Conversion Rate

Clicks

Rewards

Operator A

$130

0.5%

343

$222.95

Operator B

$120

169

Operator C

$100

0.75%

114

Operator D

$75

1.2%

Table 5 Reward per player

Conversion Rate

Clicks

Rewards

Operator B

$120

343

$411.60

Operator D

$75

1.2%

169

$152.10

Operator C

$100

0.75

114

$85.50

Operator A

$130

0.5%

$50.05

holes with the aim of trying to consistently increase our income and, subsequently, our profit by about 50 percent, with no more traffic.

Profit leakage – AKA your money going down the drain A well designed and implemented affiliate site will generally incorporate many different areas, but one core aspect that is common to almost every affiliate site out there is the list of recommended operators. The way most affiliates will order these operators is based on CPA or Rev Share arrangements, with those operators who pay the most being at the top and those that pay the least at the bottom. We all know that in any ranking, whether it’s search engine results or recommended operators, that the one at the top will get most clicks. There is even data to back this up based on the public release of information from AOL in 2006, all the way through to large webmaster tools data as well as information from the Chitika ad network. Although the percentages differ, there is

clear evidence to show that ‘higher ranking’ means ‘more clicks’, and surely it makes commercial sense having the operator that pays the most at the top getting the most clicks? Let’s use the most conservative and recent of the numbers, the Chitika data (http://chitika.com/research/2010/ the-value-of-google-result-positioning/). (Table 1) So based on our current understanding, an example layout of our ranked list of operators would be (Table 2). But what if we add another variable into the ranking equation? That variable being conversion rate, based upon the percentage of clicks that are sent from our affiliate site to the operator, divided by how many of those clicks become players.

Conversion Rate = Clicks to Operator/Player If we then imagine we had 1,000 visitors to our ranked list of operators and they clicked according to the Chitika scenario, we would see the following (Table 3).

Total Income = $580.55 It looks good as we know that Operator A, the one that pays us the most, is getting most of the clicks. WOOHOO, we must be making bank here! But hold on a minute… what if we were to reorder our list according to the Effective Rewards per Click (ERPC) of each operator? This metric will take into account both the rewards and also the conversion rate.

(CPA ÷ Rev Share) × Conversion Rate = Effective Rewards per Click (Table 4) Oh dear; we now know we had the ordering wrong before as our top rewarding (based on ERPC) program is Operator B and our previously bottom operator, Operator D, should have been at position two. But what does that mean in cash terms when we factor in the difference in the quantity of clicks those operators would have received due to the positioning of them? (Table 5) Total Income = $699.25, which is slightly more than a 20 percent increase in our bottom line income.

iGB Affiliate october/november 2010

traffic

Table 6 Reward per player

Conversion Rate

Clicks

Dupe Player Click 30%

Rewards

Operator B

$120

343

-102

$289.20

Operator D

$75

1.2%

169

-50

$107.10

Operator C

$100

0.75

114

-34

$60.00

Operator A

$130

0.5%

-23

$35.10

Table 8

Table 7 Visitor 1 (V1) Operator B

Visitor 2 (V2)

Visitor 3 (V3)

X X

Operator D

Operator C Operator A

Visitor 4 (V4)

V1 R

V2R

V3R

V4R

Operator D

Operator C

Operator A

Operator E

Operator F

Operator B

Table 9 Reward per player

ERPC

Position

Operator A

$130

0.5%

$0.65

Operator B

$120

$1.20

Operator C

$100

0.75%

$0.75

Operator D

$75

1.2%

$0.90

Operator E

$40

0.5%

$0.20

Operator F

$30

0.5%

$0.15

There is a real ‘oh crap’ moment when you realise your income could have been more than 20 percent higher for all of those earlier years but at least you are now wise and can reorder your partner list according to those that will send you more money in the real world. The difference that this can deliver to your business is huge and if you don’t already implement click tracking to calculate the conversion percentage of your traffic then please start doing so immediately. But wait, there is more! Although everything above is statistically relevant there is a gaping hole. Do you remember when we sent 1,000 clicks to operators but not all the clicks were counted? We sent 703 clicks in our example above which means there is an approximate 30 percent discrepancy. If we could find that discrepancy then we would almost equal the top performing affiliate partner and, hopefully, increase our income accordingly. Where could it be? Let me show you. As a long-term affiliate in the gambling business, you know that almost every operator out there will not pay for ‘duplicate players’ (i.e., a player that signs up via your affiliate link but is already within the operators system). I do not blame the operators at all for this and it makes sound commercial sense to not pay twice for the same person. It wasn’t so much of an issue years ago; as

Conversion Rate

iGB Affiliate october/november 2010

online gaming was new, it was unlikely that a visitor to your site was already playing on the casino you would send them to, but times change and the market penetration of online gaming is close to bursting point. The truth is that collectively, we have done an amazing job and wherever you are in Europe, if you stopped a random person they would be very much aware of online gaming and could even be a participant. A few years ago, this was highly unlikely to be the case. We are now in a business of churn and change rather than growth and innovation. Let’s look at our last ranked list of operators again and throw in some new variables. How would our income change if 30 percent of our visitors were already customers of casinos we promote? For this example, I will apportion the reduction evenly throughout all four of our operators. (Table 6)

Total income = $491.40 Scary isn’t it? We thought, before we ordered our operators effectively, that we would earn $580.55, then we optimised our earning potential to increase that to $699.25, but it now seems that due to market penetration and duplicate players we might only earn $491.40! I can hear you shouting, “But what can we do? How do we only promote operators that deliver us an earning opportunity?” Firstly, here is the good news. The above

example isn’t accurate as we have already taken off the 30 percent of clicks that never deliver us an earning opportunity – this was factored into the conversion rate of the operators. But the reality of lost income is still true; how do we optimise the visitors that we send to operators so that we only promote, for the specific visitor, the operators that allow us to have an earning opportunity? Let’s imagine we have four random visitors from the ‘missing 30 percent’. Let’s presume for a moment that we also know what operators they currently play or are signed up with online. (Table 7) Wow, there are a lot of clicks we would probably send that deliver us ‘No Earning Opportunity’. ● 42.08% chance of V1 clicking a link that delivers no earning opportunity ● 16.96% chance of V2 clicking a link that delivers no earning opportunity ● 28.38% chance of V3 clicking a link that delivers no earning opportunity ● 34.35% chance of V4 clicking a link that delivers no earning opportunity But wait a minute; as this is an exercise with presumptions, specifically, that we knew what operators each visitor was already signed up with, then why are we treating them all the same? Surely we can tailor the experience to be personal to them as an individual? Wouldn’t it be better if we did the following? (Table 8)

Let’s look at this for our four example visitors, imagining that every visitor was the same as each of the examples.

Visitor 1 (VI)

Visitor 2 (V2) Reward per player

Conversion Rate

Clicks

Rewards

Operator D

$75

1.2%

343

$308.70

Operator C

$100

0.75%

169

Operator E

$40

0.5%

114

Operator F

$30

0.5%

Reward per player

Conversion Rate

Clicks

Rewards

Operator B

$120

343

$411.60

$126.75

Operator C

$100

0.75%

169

$126.75

$22.80

Operator A

$130

0.5%

114

$74.10

$11.55

Operator E

$40

0.5%

$15.40

Total Income per Thousand Visitors = $777.80

Total Income per Thousand Visitors = $627.85

Visitor 3 (V3)

Visitor 4 (V4)

Reward per player

Conversion Rate

Clicks

Rewards

Operator B

$120

343

$411.60

Operator A

$130

0.5%

169

$109.85

Operator E

$40

0.5%

114

Operator F

$30

0.5%

Reward per player

Conversion Rate

Clicks

Rewards

Operator D

$75

1.2%

343

$308.70

Operator C

$100

0.75%

169

$126.75

$22.80

Operator A

$130

0.5%

114

$74.10

$11.55

Operator E

$40

0.5%

$15.40

Total Income per Thousand Visitors = $555.80

Total Income per Thousand Visitors = $524.95

Normalised per Thousand Visitor Income = (V1+V2+V3+V4 / 4) = $621.60

It would mean that we still promote four operator programs so our layout doesn’t change and we start working with two new operators that were next highest on our ERPC ratio. But what does that mean for our earnings when we factor in the removal of ‘no earning opportunity’ as well as the rewards from the new operator programs we are promoting? To begin with, let’s presume that Operator E and F are low payers and their conversion ratio isn’t great in comparison to the others. (Table 9) Now this may seem like we have reduced our income from the previous high of $699.25 to only $621.60 but you would be wrong as the above numbers are per thousand and we know that we would only be using this system on the missing 30 percent, effectively eliminating the opportunity of promoting an operator when there is no earning opportunity. So we need to take our ‘per thousand’ income and multiply it by 30 percent and add it to our previous ERPC income. So the real income is: Percentage of Clicks Extra Income

$186.48

Previous Income

$699.25

Total Income

$885.73

When I did these sums for the first time, many moons ago, I had a real “Oh my God” moment, and you may well do too. Let’s look at those financial changes again from the top and let’s call this new system ‘Pzyche based Ordering’. Income

Compared

Standard Ordering

$580.55

100%

ERPC

$699.25

120.04%

Pzyche

$885.73

152.5%

Why don’t you pop along to see us at the Budapest Affiliate Conference on our stand or visit the Pzyche.com website, remembering to use the code ‘PROFIT LEAK’ when you sign up to get an extra special free trial and bonus!

to Standard

So by eliminating the chances of sending clicks to operators where there is no earning opportunity we have enhanced our earnings by more than 50 percent. Ahhh, but there is no way to know about the lost 30 percent of traffic; the traffic that accounts for dupe players, where we as affiliates have no earning opportunity. Or is there? My team and I have been secretly working away like squirrels over the last year and a half and have developed Pzyche – a Visitor Propensity Intelligence (VPI) system. One of the key components specifically built for the gaming affiliate is the ability to accurately score the propensity of a visitor to your site to be a player at an operator and to reorder the operators that you promote, thereby, increasing your earning potential by eliminating the ‘no earning opportunity’ scenario. It’s all automatic and, quite simply, works.

Jason duke, Director, Strange Logic, is a leader obsessed with search engines and the algorithms that power them. His enquiring and exploring mind linked with a drive to see things down creates a culture that constantly asks, “What if?”, “Where to next?” and “I know how!” He is focused at managing a business, with an emphasis on marketing in a holistic manner to deliver the pinnacle of rewards on and offline. He is very well known and respected within the blogosphere and the search communities as a worldwide search leader regularly quoted and spoen in public, private, print, radio, TV and the web regarding search matters. Organisations including The BBC, Forbes, News International, multiple gaming & gambling businesses as well as the British Government have all been advised by him.

iGB Affiliate october/november 2010

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21/07/2010 16:01

traffic

Following his session at the Budapest Affiliate Conference in October, Paul Reilly follows up with some key takeaway data and insight in relation to the Google Caffeine-related variable position filter.

In April and May, many brands have seen what appears to be a single keyword variable position penalty, which some are referring to as the Caffeine/May Day update. Instead of speculating, let’s stick to the data in our possession. In Chart 1, we can see volatility across a sample of keywords. The peak that occurs throughout April and May is indicative of the recent introduction of the new algorithmic filter. (Google.co.uk) During this period, a number of large brands were dropped from page one; this update appeared to impact all keywords to some degree (see Chart 1). Based on the analysis of the back link profiles for thousands of websites, we found that the common denominator for sites impacted negatively was the threshold of link text variations. We found that in cases where a specific minimum percentage variation did not make up the anchor text variation, the page would be penalised for the keyword or keywords which exceeded the threshold. Interestingly, this investigation lead us to pioneer a forensic SEO technique which we now call Link Spectral Analysis. We use this technique to identify filter thresholds. Let’s take a quick look at this technique. (See Chart 2) In Chart 2, we can see a sample poker spectrum taken from a single point in time. Anchor text distribution percentages are grouped into “Keyword”, which includes variations which contain the keyword, “Brand” including URL or domain name variations, and “Other” including “click here”, “visit this site” and all other link types. We have conducted this analysis for every iGaming product as well as in other industries and the same pattern holds true.

There’s no such thing as a free link Since we now know that we need to add noise to our link building (rather than just pay lip service to it), let’s look at how we best do this. When creating noise within a link profile, i.e. sufficient variations to ensure you’re looking natural, there are a number of ways you can approach this. The techniques fall into two fundamental categories: 1) Free 2) Paid In reality, there’s no such thing as a free link. All links cost in terms of time and

effort; for example, creating a piece of content/the cost of a newswire for a PR release/the cost of research/the cost of an illustrator hired to create an info graphic, etc.

Links cost money Google distinguishes, in principal, between links which are generated naturally by providing genuine link-worthy content, and frowns upon both direct paid links or commercially incentive links, usually where specified anchor text is present. Obvious patterns of incentivised widget (copy and paste HTML or JavaScript) initiatives can be found through proximity

Chart 1: Week on week standard deviation of SERP volatility by keyword

Chart 2: Spectral Analysis sorted by “other” link types

Takeaway SEOs have being paying lip service to this for years, but now, when engineering a ‘natural’ link profile, you actually do have to include variations such as: domain.com, http://www.domain.com , click here and visit this site.

iGB Affiliate october/november 2010

traffic

text analysis (i.e. looking at repetitious patterns of similar text surrounding the links).

Takeaway Be careful when deploying widgets for SEO purposes as it could go horribly wrong! Particularly if you’re expecting the widget to be massively adopted and are targeting your homepage with a single keyword. Note: Widgets linking back to the user’s favourite football team, poker player profile, favourite hand or bingo community profile page will have the best impact by funnelling juice through the internal link structure.

Link buying erodes your ROI Even if you’re super-careful, cover your tracks and get away with link buying without detection. The downside is compound external costs as maintaining your link placements is very expensive and will rapidly neutralise any ROI. Natural (free) links are always the best option, particularly when creating noise.

“In reality, there’s no such thing as a free link. All links cost in terms of time and effort.” Getting back links using RSS If your site has any kind of content stream, make it ‘syndicatable’. Whether it’s a sports news feed, latest odds update, poker or roulette strategy blog, or user generated content (either forum or community). ●● Ensure every piece of content has a correctly configured RSS feed which is auto-discoverable. ●● Back links to the original source are most often linked using the article title as anchor text. ●● Back links to user profile pages will ensure distribution of links to deep pages in proportion to the size of your participating community. Internal link structure will do the rest. Note: Following the April/May update, it’s less about targeted anchor text to your homepage and more about balanced link structures.

take your content and get their version ‘spidered’ before you with other attributes such as links stripped out. If your content is still being credited to another site check this page: http://www. google.com/dmca.html.

Link Bait: do you want your casino content to go viral? ●● Create controversy. Affiliates can do this

for fun – big brands can’t compete with affiliates when it comes to controversy. It’s usually off-brand and even when it’s aloud, by the time it’s made it past the PR team, it’s so diluted and weak that it just won’t fly. There are books on this very subject ●● Give it a tech flavour. Twitter users and bloggers love a tech flavour. If your iGaming business doesn’t have a standout tech angle, make one up! It could well be a spoof about random number generators or the findings of a survey which shows the year-on-year increase in online poker players that consider themselves tech geeks. (I just made that up but... my, that’s a good idea.) ●● Provide digestible unique data. If the data is comprehensive, present it as an infographic. There’s a reason why infographics are so popular. Our vision has the highest bandwidth for information transfer. Infographics are essentially a method of data compression. Visualising data enables you to absorb data faster and more efficiently. ●● Seed it to the right influencers. It’s not about having 50,000 followers on twitter, if your link bait is carefully crafted you should be able to seed it through one influencer and saturate the hive. Two things have to be in place for this to be a success: ●● The information has to be tuned to resonate with the hive ●● The influencer has to be chosen with precision accuracy OK... you’ve link baited your readers and gathered some of the most powerful links on the web. The influencers who you baited gathered half a million back links before lunch time; there’s so much buzz around the story that you’re trending in twitter... twice!

Own your copyrighted content Include a link back to the original article and include a copyright symbol referencing your domain. Google should ensure your site is credited. Sometimes, scrapers might

iGB Affiliate october/november 2010

So what now? If you run a sportsbook, use internal linking to funnel the authority to your markets or wait and 301 the target page to

your event page five to seven days before the next big sporting event. (That’s the best tip you’ll read this side of Euro 2012.)

Then do it all again! Today, the web is engineered for viral proliferation – you don’t need a viral specialist anymore. Last time you heard gossip spread round your place of work or your town, it was driven by the content and propelled through the hive (a collective who are connected via a communication network). Today, we are all so connected, half the work is already done. The communication mechanism requires no engineering. Share and re-tweet buttons are all over the web. All you need to do is come up with something to share or re-tweet and seed it to the right influencer – a bit like spreading the village gossip.

“Today, we are all so connected, half the work is already done. The communication mechanism requires no engineering.” And remember... Always seek professional advice before commencing your SEO campaign. ●● Picking a keyword is picking a fight. ●● Don’t pick a fight unless you’re sure you can win. If you have any specific questions email me directly at paul.reilly@stickyeyes.com or follow me on http://twitter.com/paulreilly or stalk me on http://foursquare.com/user/ paulreilly

PAUL REILLY is one of the UK’s leading iGaming SEOs and link strategists, with 11 years experience, multiple SEO awards and honours and a proven track record in the most competitive markets which include financial services and travel. Today, crawler based agency Stickyeyes leads the way in forensic SEO and competitor intelligence (tracking 11,836 SERPs hourly, across 43 servers in 13 countries). When Google changes the rules, Stickyeyes is first to know about it.

traffic

Online Gaming and International SEO Jonathan Murphy of Oban Multilingual: International SEO, provides iGB Affiliate with an insight into workable strategies when dealing with international search.

The international market holds a significant amount of promise for UK gambling operators, and with the European markets opening up and developments in online gambling legislation, a good SEO campaign is something worth thinking about. “Google PPC is often not available in European markets, so there is a greater need for SEO than in the UK at the moment,” Peter Laverick, Marketing Director at Victor Chandler, points out. However, developing an SEO strategy for a foreign market can throw up obstacles, and it’s not as simple as translating a site from English. Here are Oban’s top ten tips for effective multilingual SEO.

iGB Affiliate october/november 2010

1. Remember, Google doesn’t rule the world The term ‘search’ has become synonymous with ‘Google’ in the online marketing world. However, when aiming to target an international market, it’s best to think outside of the ‘Google’ box and look at local and domestic search engines. For example, in Poland, local portal onet.pl is a popular search tool, and in Russia, domestic search giant Yandex.ru holds a huge proportion of the market share and is the world’s fastest growing search engine. The search engine market can be very varied, therefore, online gambling operators should always consider which search engine they are optimising

for as they often have different rules and regulations for SEO.

2. Don’t translate By translating content directly from English to the language of the country you’re targeting, you’ll miss specific language traits and nuances which are local to the region. Also, some words can have different cultural associations depending on the locality. By starting from scratch with website content and producing text which considers the region which is being targeted (localisation), you’ll have a better chance of driving good quality traffic to your gambling site as well as avoiding

embarrassing linguistic errors. Although translating directly might seem like the easier (and cheaper) option, errors almost always occur and the process is essentially a false economy.

“It shouldn’t be assumed that simply because a search term is hugely popular in the UK that it will be just as popular in other countries.” 3. Choose local keywords Our research at Oban always pulls up interesting facts and figures in terms of keywords. It shouldn’t be assumed that simply because a search term is hugely popular in the UK that it will be just as popular in other countries. For example, the translation of the search term ‘online poker’ – one of the most popular gambling-related terms in the UK, is not as popular in France, with less than half as many searches conducted on it. In many European countries, it is common for people to use the search phrase ‘on line’ with a space between the ‘on’ and ‘line’, so in Italy ‘online casino’ becomes ‘casino on line’. Choosing popular local keywords rather than translating from English will help achieve the most effective results.

4. Build good links Link building is a crucial part of SEO, and involves the process of linking your site to others. Search engines recognise this as a sign of ‘authority’ and rank pages according to the links they have. However, different search engines look for different aspects of link building in order to determine the ranking of the page. Google, an established and highly intelligent search engine, focuses on the quality and relevance of the links, but some domestic search engines, which aren’t as developed as Google, may look for a high quantity of links, something that Google actually penalises for in some circumstances. Once again, it’s important to understand which search engine you’re optimising for and develop a strategy specific to that one.

5. Know the PPC laws Google’s Pay-Per-Click (PPC) advertising laws are complex and vary across Europe and the rest of the world. In some countries, operators from outside of the borders are allowed to target the market if they’re licensed in their own country; for example, an Austrian online gambling operator would be allowed to use paid

advertising in the UK as long as they’re licensed in Austria. Some countries only allow operators who are licensed within their own borders to advertise on a PPC platform, and in some countries, such as Spain, Finland, Norway and Denmark, the practice is completely banned with the exception of state-run operations. It is in these regions where a good SEO campaign is even more necessary.

and that they are more likely to use sites for a longer period of time and complete transactions on the site if its features cater to that market. Simply by moving the ‘call to action’ button i.e. ‘Click here to play’ to a different part of the page, companies may be able to make their site more successful in foreign markets.

6. Consider regional domains and hosting

It goes without saying, but knowing your audience is a vital part of entering any new market. When it comes to iGaming, there can be major variations in how different countries utilise online gambling services. Peter Laverick gives some insight into the disparity between markets. “Poker and casino are quite steady products across most European territories, but in sportsbetting, there are huge differences. Average bet stakes are traditionally a lot lower than the UK but margins are much higher. The main cause of this is bet types. In the UK, 87 percent of our business is on singles, but in Greece, for example, less than 30 percent of our business is on singles, and bookmakers like multiples.” Whilst in the UK, online poker players are predominantly male, in France, the divide is more even between male and female. Considering these kinds of cultural differences when developing an international SEO strategy is vital to its success.

Local search engines tend to prefer local domain names, so for the French market this would be .fr, and for Russia this would be .ru, and so on. Many UK online gambling operators who haven’t obtained full regional domain names use sub-domains instead, so rather than .fr for France, it would be .com/fr. Whilst sub-domains can be SEO-effective in some circumstances, many domestic search engines don’t recognise them as ‘local’ sites and this can have a negative effect on search engine rankings. Local hosting is also a factor UK gambling operators may want to consider. However, this is not always possible as some countries have strict laws on foreign online gambling operators and web hosting. For example, in Finland, the government holds an online gaming monopoly and any operator hosting a site from within Finland who has not been issued a license by the Finnish government (currently only staterun sites have licences) is deemed illegal. Once you’re aware of the online laws of the market, you can then decide whether to host a site in that country or not.

“When aiming to target an international market, it’s best to think outside of the ‘Google’ box and look at local and domestic search engines.”

8. Research the online gambling landscape

9. Know the competition Online gambling is a substantial and expanding business and many markets, particularly in Europe, are highly competitive when it comes to online gambling operating services. By gathering an understanding of where local and foreign competitor sites rank on the leading search engines for certain keywords, you’ll get an idea of the size of the SEO project you’re taking on, what keywords your site needs to rank for, how much link building needs to be done, and whether a PPC campaign is possible or necessary.

7. Test web design elements

10. Think local

Web users from different cultures and countries won’t have the same understanding and/or perception of certain web design elements. Website colours, text size, font, and graphic placement can all have an effect on how people interact with the site. Our cultural multivariate testing tool, GlobalMaxer, has discovered that in France, people have different preferences when it comes to web design than the people in the UK,

To summarise all of the above – a multilingual or international SEO strategy needs to be localised. Gearing a website for a particular region will ultimately bring more relevant traffic and achieve better results on search engine pages. The European online gambling industry is highly competitive, so knowing what your target market is looking for and catering your site to that market specifically will engender better results.

iGB Affiliate October/november 2010

insight

Getting the Most from Conferences I know this article will be in the magazine that people arrive home to from Budapest and be available at iGB Espana and the iGB Scandinavian Affiliate Super Summit, so I thought some insights in to how to get the most from conferences would be in order. It is advice I wish I had been given ten years ago when I started attending web-related conferences.

information you really want to hear about. You should also do a little research on the speakers so you can ask questions and engage them if you see them outside of the session. Being knowledgeable on their topic is good, knowing a bit about the person is usually better. I remember people who knew about my last article or asked about another conference I have spoken at.

Plan ahead Make sure you have packed enough socks and underwear... well, your mom probably told you that one. But basically, it means be prepared. Business cards are a given but add something to the ones you bring to a conference. These are not just for handing out to women or men so they have your number at a bar. We all come home from conferences with pockets full of cards and don’t necessarily remember who the person is or what connection was made with them. How do you make your card stand out? I have some that had an SEO checklist on them, others with tips for PPC and analytics. These come in handy and people are less likely to throw them away and will also remember who gave them the card. You should also pick which sessions you want to attend and block those times out. This helps you make good use of time – you can fill them in your calendar and not overbook yourself and miss a session on

iGB Affiliate october/november 2010

Make connections Many attendees go to great lengths to connect with the speakers, forgetting that their fellow attendees usually understand many of their needs and, in a lot of cases, have dealt with the exact same problems they have. Some of the best advice I got in my early years in the industry came from other attendees. Interestingly, they also became speakers as the years rolled on but more than that, they became my friends. While the bars and parties are a great place to meet people, a good tip is drink in moderation. Get wild at home or after the conference. You will appreciate the benefit of being more alert and not hung-over in the mornings. You get more from the event when you’re not looking for another drink but rather, looking to connect with others.

Work the exhibit hall At every conference, I walk methodically through the exhibit hall and stop at each booth. I ask every vendor to explain their

products and if I have seen them before I ask what new elements they have added recently. In the case of gaming, I want to know about the affiliate programs and make friends with the company representatives. It is always good to have someone to call who you know. The people who gain the most from conferences are those who work them. When you get home, don’t forget to send follow up emails to the cards you have and make LinkedIn, Facebook and Twitter connections with the people you spoke with.

Frank Watson is CEO of Kangamurra Media and has been involved with the web since it started. For five years, he headed SEM for FXCM, which was once one of the top 25 spenders with AdWords. He’s worked with most of the major analytics companies and pioneered the ability to tie online marketing with offline conversion. He has now started his own marketing agency, Kangamurra Media. This new venture will keep him busy when he’s not editing the Search Engine Watch forums, blogging at a number of authoritative sites, or developing some online community sites. Frank was one of the first 100 AdWords professionals, as well as a Yahoo! and Overture ambassador. He is on the Click Quality Council and has worked to diminish click fraud.

interview

iGB Affiliate gets inside the affiliate sector with Randy Layman, CEO of Felt Marketing. Sum up, in a sentence, what affiliate marketing means to you. To me, affiliate marketing means Freedom! I’ve worked in a corporate environment since I was 18 (I’m 32) – I just love being in charge of my future. Do you have to be a certain type of person to be successful as an affiliate marketer, particularly in the gaming industry? Yes absolutely! To succeed in affiliate marketing and especially the gaming sector, you must be ready to fail, you must be able to pick yourself back up after failing, be self-motivated and above all else, determined. If you cannot deal with adversity then this is the wrong business for you. I think far too many people become gaming affiliates as a way to make quick money working from home. The allure of being your own boss and managing yourself seems like an easy process, but it doesn’t take long to realize there are no short cuts to this industry and you have to put in the time. How did your gaming affiliate career begin? Like so many others, I started playing poker around the ‘MoneyMaker’ boom. I joined a well-known poker forum and engrossed myself in all things poker. The poker forum I joined was eventually sold, and once it became clear the new owners had little interest in the forums, several of the long-time members suggested I start a new poker forum/website. And so my first poker site was born. The site was called ‘Ridge Poker’ and was sold years ago. I’m the type of guy that has to dive head first into everything I do, and I’m either going to figure it out or move on. So for the next year, I spent hours a day on the ‘Party Riches’ forums (now the PAL Forums) and thankfully made some great friends along the way who helped me understand the business and what it was going to take to succeed. How has the business practice of affiliates changed/evolved in your time in the gaming industry? Is there more of a corporate feel to the way business is carried out these days?

iGB Affiliate october/november 2010

When I first started the industry was a much different place. The UIGEA had not been passed, poker was exploding all around the world, players could deposit with PayPal, credit cards, etc. The whole industry was growing rapidly and the poker rooms were pulling out all the stops to grab a piece of the pie. The best part was that the poker rooms felt more like partners than they do now. Over the last two years, networks and rooms have been hiring CEOs and marketing executives from other verticals to come in and ‘re-tool’ their businesses. The problem with this, of course, is the massive disconnect these people have. They are unfamiliar with the industry as a whole, so businesses are being run solely motivated by short-term profit margins, than longterm sustainability and partnerships. For an industry built on the principles of entrepreneurialism and innovation, is a more corporate environment suitable or is the entrepreneurial spirit alive and well in today’s marketplace? As an affiliate I think a perfect recipe for success in the industry is to have a mix of both. The lack of restrictions you have as a self-employed business person enables you to experiment with new ideas, marketing plans and gives you the freedom to take risks. At the end of the day, you have total control over what you decide to focus on. I believe the most successful affiliates thrive on this kind of accountability. On the flip side of that, you have to be organized and have a sound game plan on everything you do. You still need to delegate, budget and plan ahead. What have you learnt most in your time in the gaming industry? That’s a tough one. I think I’ve learnt a lot about myself since I became an affiliate. My background was in legal/environmental affairs – I thought I wanted to do that forever as it was a good career. I soon discovered my passion was being able to ‘create’ something people cared about. (Bear in mind I am not mechanically inclined; I cannot build a bird house, fix cars, draw, etc. My wife, Durana, actually

made a rule that I’m not allowed to even attempt to fix anything!) So to be able to create a website and to have someone on the other side of the world visit it, read some of our articles, and send us a ‘thank you’ message is exciting and will never get old. So, I guess to answer your question; I’ve learnt a lot about myself and what my true passion is. I truly think I’m blessed because I know many people who work jobs they hate, but they stick with it because it’s semisecure. But they have no passion for their work which, in turn, reduces their ability to enjoy life. In my opinion, life is too short to live like that. The affiliate sector of the iGaming industry is in mourning at present after the loss of two of our main protagonists, and best loved characters – do you have any final words for the Professor and the Captain? I think all gaming affiliates owe these two men and their families a big ‘Thank you!’ The outpouring of emotion and the willingness of the entire industry to do whatever it could to give their families support is a testament to the type of people they were. I didn’t know either of these men personally, but I did have the pleasure of speaking with them a few times. Their knowledge of the industry was remarkable and they were always willing to give advice. They were pioneers of the industry and they paved the way for many affiliates like myself. My heart goes out to their close friends and family.

“I know many people who have no passion for their work which, in turn, reduces their ability to enjoy life. In my opinion, life is too short to live like that.”

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Going Legit at Last? Affiliates and state-licensed Internet gambling.

“When rendering unto Caesar, everything is legitimate” Pierre Cornielle

Most observers now agree that a general program of licensed Internet gambling is coming to the USA. Only the details of timing and construction need to be ironed out. Consequently, most participants in the industry are trying to figure out where and how they will fit into the brave new world. Just now, the most likely scenario is that one or more US states will legalize Internet gambling, poker in particular, within the next year to 18 months. This will probably forestall Congressional attempts to establish a nationwide licensing system, or at least force such a system to ‘grandfather’ the existing particulars into any new regime. But the approach of the new order gives rise to apprehension for many participants

iGB Affiliate october/november 2010

in ‘traditional’ Internet gambling (if the word can be used to refer to an industry not yet 20 years old). They worry that their position is similar to that of a 1920s rumrunner when Prohibition was repealed: a specialty that no-one will need anymore. In some cases, this will prove to be true, but others will find that they’re in as much demand as ever – if not more so. And affiliates may well find they fit comfortably into this second group.

The state-at-a-time scenario At first glance, it would seem that the field is still wide open for any and all interested iGaming professionals. This is because the Unlawful Internet Gambling Enforcement Act (UIGEA) gives individual US states and the US Indian tribes which have opened up

gambling establishments under the Indian Gaming Regulatory Act (IGRA) the right to legalize and license Internet gambling within their respective borders, provided it is properly supervised. Well, that would appear to be ‘open sesame’, wouldn’t it? When you include the US territories such as Puerto Rico and Guam with the states (and there is legal precedent for this, in the Wire Wager Act of 1961), and add in the gaming tribes, there are no less than two hundred and eightyeight (288) individual opportunities here. Very few of the lawmakers, regulators, or administrators in any of these jurisdictions have any practical experience with Internet gambling. If they choose to participate in anything like a timely fashion, that necessarily means forming alliances and

a controversial subject which many politicians would rather not touch. And the states’ monopoly on gambling law in gambling revenue is one they would rather not share with the federal government. If this scheme should become law, there might be less demand overall. Many people assume that the big US gambling operators, the brand names from Vegas and Atlantic City, will simply walk in and take over.

A place either way

arrangements with iGaming operators, payment solutions providers, and the other necessary vendors and service providers. But... not so fast. As one practical proposition, the Indian tribes, who tend to be a conservative bunch anyway, will more than likely take their lead from their respective states of residence. As another, the operators and vendors associated with the first state to legalize Internet gaming will have a tremendous advantage. The present situation reminds me of one of those nature films where the penguins on an ice flow are nudging each other to see who will actually be first into that dark, uncertain water. Nevertheless, somebody will be first. And just like in the films, the rest of the flock will follow right away. And when they do, the pressure will be on to turn a profit right away. A tremendous advantage for the first proven performer, in other words. Nevertheless, there are sure to be several competing conglomerates if this state-level scenario comes to pass.

“It is the affiliates who are the trench fighters and line troops of the iGaming industry’s marketing… without them, or someone just like them, no venture in the iGaming industry can hope to prosper.” The top-down solution The alternative is a national regime of licensing Internet gambling. Congressman Frank and associates have been pushing this solution for the past four years with no success to date. Gambling remains

However, affiliates can take comfort. Marketing is indispensable to any business, and that goes double for a leisure service industry such as gambling, online or off. And it is the affiliates who are the trench fighters and line troops of the iGaming industry’s marketing. They actually bring in the customers. Few, if any of them are household names; more of them are working than wealthy. But without them, or someone just like them, no venture in the iGaming industry can hope to prosper. Somebody has to keep the players coming in, and, just as important, coming back. Even governments have learnt this lesson. Just because the powers-that-be award themselves a monopoly, that’s no guarantee of success. Nobody has to play. American state lotteries, one after the other, saw their revenue levels loft and even decline after the initial spike of interest surrounding their respective launches. In gambling, the customer is king, and he knows it. And a big part of success is having someone who will go to the customer and keep his attention, keep an eye on what keeps him happy. And this is why affiliates will have a place in which every new order emerges for Internet gambling in the USA. They have been interacting with America’s online gamblers from the very beginning. They have built up the knowledge and the relationships which, any marketing professional will confirm, are indispensable for long-term profitable operations. It may be true, for instance, that some giant gaming conglomerate like MGM or Harrah’s have databases with thousands of names, addresses, and so forth. But those are all built from land-based gambling. Many of these customers would transfer easily to the web – and then again, many would not. But once Internet gambling is approved – state level or federal, it doesn’t matter – the rush will be on to get in the game. When that happens, affiliates and even networks of affiliates may find, far from being frozen out, that they have more to sell than most. It is with their help that known and profitable players can be contacted and

attracted right away, and away from the offshore operators. If the initial approval is on a state-bystate level, this may be problematic for some. Initially, each state/territory/tribe will be limited to those customers who reside within their respective borders. Soon enough, however, these individual markets will move to pool their customers, as has already happened in the USA with Internet horserace betting and with the state lottery programs such as Mega Millions and Powerball. And if the national program should put in place first, this would no longer be a concern. Only those jurisdictions which affirmatively opt out of the national scheme would be forbidden. For all others, affiliates would be desirable vendors with ‘good to go’ information.

“The present situation reminds me of one of those nature films where the penguins on an ice flow are nudging each other to see who will actually be first into that dark, uncertain water.” Best of all, there is still time to for affiliates investigate and plan, and make a place for themselves when things change. As of this writing, neither the US Congress, any US state or territorial legislature, nor any tribal council inside the USA has voted to expand Internet gambling beyond its existing parameters in this country: just over half the states license Internet-based companies to help with horseracing bets in some form, and five states are moving to sell their state lottery tickets online. It might happen soon, and it should. But until it actually does happen, there is nothing much affiliates (or anybody else in the industry) can do except gather information and make friends. For as Ronald Reagan reminded us: “it ain’t over till the fat lady sings”. And the final notes have yet to sound.

MARTIN OWENS is a California attorney specializing in the law of Internet and interactive gaming since 1998. Co-author of INTERNET GAMING LAW with Professor Nelson Rose,( Mary Ann Liebert Publishers 2005) ; Editorial board , Gaming Law Review. Comments/inquiries: mowens@tradeattorney.com.

iGB Affiliate october/november 2010

Product Feature: Online Poker

The Psychology of Online Poker Professor Mark Griffiths of the International Gaming Research Unit at Nottingham Trent University provides some insight into the psychological factors involved in online poker.

Given the fairly recent explosion in the online poker market, the amount of psychological research on Internet poker has been very limited. However, one of the most important psychological factors that online poker companies and affiliates should consider is getting potential players to play in the first place. Here, trust is of paramount importance in getting people to play poker online. Online poker players are more likely to gamble online with those companies that are well established, such as Harrah’s, than a little known company operating out of the Caribbean. Trust is an historical concept because customers need repeated interactions coupled with positive feelings to build it. Branding experts claim it takes at least three years to establish the feeling of goodwill among consumers. The good news for companies – including the online poker industry – is that customers do not have to have experienced the product. Potential customers might play online poker because others have done it. Although little studied in empirical gambling investigations, trust is thought to be an important variable in both the initial decision to gamble and the maintenance of the behaviour. In a recent study carried out by our research unit on nearly 11,000 online gamblers, four-fifths of our sample (79 percent) considered the Internet a trustworthy medium of gambling. However, most Internet gamblers preferred to gamble on websites of well-known and trusted ‘high street’ names (90 percent). One of the most crucial things about brands for the online poker industry is that they help players define their selfimage and who they are – at least on some psychological level. For some people, this ‘personal branding’ may be more important than their social identities within a

iGB Affiliate october/november 2010

community. For example, the car they drive or the newspaper they read, are particularly strong cultural indicators of what sort of person they are. Where they play online poker can be an extension of this. So, how can poker sites establish trust? Initially, it was argued that the Internet would provide a level playing field for small and large companies alike. However, given the need to establish trust, research seems to suggest that organisations with an existing reputation are at an advantage. The reason for this is that increased size and reputation appears to lead to higher trust, which, in turn, influences the perception of risk and the willingness to spend money online. Although there has been a small amount of scientific research on the psychology of traditional poker, online poker and offline poker are obviously not synonymous. Most previous research has concentrated on the poker player’s ability to ‘read’ their opponents’ body language and verbalisations. When playing online poker, a player is denied this advantage. Online poker players must, therefore, seek to manipulate their poker-playing opponents by using the psychological tools at their disposal. Put simply, a player must use the non-transparency inherent in the situation to their advantage. Online poker permits players to create a false identity. Players can portray (if they so wished) the façade of being a young attractive novice female player when, in fact, they are actually a very experienced recognised pro. In one of our studies, our research unit found that 20 percent of female online poker players and 12 percent of male online poker players had gender swapped online. Male online poker players were significantly more likely than female online poker layers

to do this for a strategic advantage. On a psychological level, the key for online players to ‘hustling’ or manipulating other players is by projecting a character and hiding their identity. Essentially, it is about representing a façade, whether it is for one hand or the whole of the game. While playing Internet poker, an online player can adapt any ‘character’ they wish to suit any game in which they engage in. For instance, if an online poker player is playing with novices it may be profitable to portray an experienced professional in order to intimidate the other players into submission. Using the online chat facilities, it is easier for online poker players to develop their persona(s). The tone and pitch of what a player ‘says’ is not revealed in the text on the screen. At a fundamental level, all players are acting with their most unemotional ‘poker face’. In these situations, players can exude confidence as they go all-in on a psychological bluff, when in reality, they may have shaking hands and be sweating like a pig. The key to winning on a psychological level is by inducing emotional reactions from other players, so with knowledge of the opponent, it is possible to ‘tailor’ interactions to induce the desired response. There is obviously still much to learn about the psychology of the online poker player but hopefully, this article highlights what online poker companies and affiliates need to be thinking about in attracting poker players.

MARK GRIFFITHS is Professor of the International Gaming Research Unit at Nottingham Trent University.

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Product Feature: Online Poker

Q&A with Malcolm Graham, CEO, PKR PKR has long been seen as one of the more progressive purveyors of poker in the online environment. iGB Affiliate talks to CEO, Malcolm Graham about the current, general landscape, and where he thinks it is headed in the months ahead. As someone at the helm of a company that has pushed the boundaries of the poker product on the Internet, how would you assess the current landscape – is it in rude health; is it stagnating; is it ready for a new wave of growth? I think it really depends on where you fit in the market. Operators for whom poker is a secondary product or whose key markets have limited liquidity are certainly finding the going tough. But we believe operators whose primary focus is poker and offer consumers a strong and differentiated product can still stay ahead of the game. The market is showing strong growth in newly regulated markets such as Italy and France. I also think there is interesting growth potential in Asia and we are watching North America closely with great anticipation. There are also some interesting possibilities presented by the growth of free-play poker games within social networking platforms – games such as Zynga’s Texas Hold’em have introduced poker as a risk-free social activity to wide new audiences. Why do you think people were (and still are) quick to write off poker, saying it has reached a plateau? Are people too eager to find the ‘next big thing’? I think you should write off poker at your peril. It is a product that people are comfortable with and it is also the first product that is regulated within the gambling market. Although social gaming seems to be leading the way, there is plenty of fuel left in the tank of poker. The past few months have certainly been something of a perfect storm – seasonality, the World Cup and the increasingly touchy economic situation across Europe all contributed to many operators posting poorer than anticipated

results. The good news is that our early post-summer results show steady growth. What is the poker demographic in today’s market – has it changed/evolved/matured significantly in recent years? Poker is predominately a male environment. Early markets either consisted of those who are early technical adopters comfortable depositing cash online, or the very enthusiastic poker player. As online technologies have become more commonplace and the public have gained trust in them, the market has evolved, increasing the spectrum of players to include those playing in a casual and fun capacity. Has the way in which they consume the poker product changed – are their demands different? I think it’s fair to say that consumers have become more demanding, expecting a more entertaining experience in return for a share of a limited leisure spend. The poker industry can also be slow to innovate, and is an industry dominated by brands with essentially identical products. This has led to players becoming increasingly promiscuous, which, in turn, hits long-term player value. At PKR, we do offer something different, and it has allowed us to acquire upwards of four million registered users. Our focus on providing a more immersive and engaging experience – both in-client and outside the client through our community offering – has also had a huge positive impact on player retention. What would be your advice to affiliates new to the sector fearing that they’ve missed the boat with the poker product? Although the affiliate market has many strong, established players, there is always room for more. Any new players in any market need to find their own USP, which will set them apart from their competitors. The personal approach seems to work better within the European market; Pokerisivut.com is a relatively new site which was set up by three young Finns in 2007 concentrating on a very contentdriven site, within a strong Finnish community. Pokerisivut was awarded ‘best

poker affiliate’ and ‘best overall affiliate’ at the iGaming awards in January, showing that you can survive if you are forward thinking and understand the need to stay ahead of the game. How important a role do affiliates play for today’s online poker companies? I am sure affiliates will play a key role in any gaming company’s acquisition plans for a good while yet. It is, however, important for any operator not to become overly reliant on affiliates (or, for that matter, any one acquisition channel). At PKR, we feel we have a good balance – we are by no means reliant on affiliates, but we have a number of strong affiliate relationships that are very valuable to us as a business. As an operator, we strive to have a portfolio of acquisition channels, of which affiliates form a fundamental part. We feel that it is important to have a strong presence across a range of channels such as a TV, SEO, PPC search, banner advertisements as well as having a strong offline program. In turn, we feel that this supports the work of the affiliates, by increasing the brand awareness of PKR. In your opinion, what are the key drivers for the online poker industry in the coming months/years? Managing the new regulatory environments, especially those within a ring-fenced geography, will be a key driver going forward. I feel that within these new markets, there will be less room for a dozen brands and instead, those few brands with strong local DNA and a diverse product will survive. What is your assessment of the wider industry at present – is its future very much dependant on regulation in new markets? Broadly speaking, online gaming is undoubtedly a growing market. The framework of newly regulated territories means that we have had to adapt to different strategies, a trend which will continue over the next 18 months. I expect to see operators working in partnership, so that bigger players will start to work with local brands in order to get a foothold into new markets.

iGB Affiliate october/november 2010

In Memoriam

Farewell Professor By Managing Editor, Michael Caselli. Friend and colleague, Lou

Q. What did Lou love most about the iGaming affiliate community? A. “The People” CAP Magazine interview June/ July 2008

iGB Affiliate october/november 2010

Fabiano passed away on August 24 while in hospital. Some of you knew Lou through the conference circuit and some of you knew Lou simply as ‘The Professor’, the sage senior moderator of the CAP forum. Either way, you have known a generous man who cared deeply about iGaming affiliates. He was both a protector of affiliates and an educator, bringing genuine and thoughtful advice to the CAP Forum. But this article is not just for the affiliates that knew Lou – for they will not forget the advice he shared. This article is for the affiliates that didn’t know Lou, and for all the affiliates that will join the iGaming sector in the future. Lou’s legacy is more than good times shared with a kind man – Lou’s legacy is about a man that fought to define the iGaming affiliate market, and defend the principles he set for the industry. Lou believed that iGaming affiliates had to stand united to balance the power of the affiliate against the power of the operator. That was actually a fundamental reason he started the CAP forum. He believed that by working together, affiliates would be more profitable then by going it alone. Lou believed that by vocalizing the concerns of the affiliate to operators, and by listening to the needs of the operator, a symbiosis could be achieved that led to both parties prospering. Above all, Lou believed that dealing honestly with your partners and colleagues was integral to the long-term success of any affiliate. Resorting to dirty tricks, dishonest practices or attempting to cheat the system, Lou maintained, would not only be to the detriment of the affiliate market, but would lead to the demise of the dishonest affiliate. Lou’s principles apply as much today as when he started as an affiliate in 1997, and any affiliate trying to forge a career in today’s market couldn’t do better than to heed this advice. But more than being a principled teacher, throughout his career, The Professor specifically targeted areas in iGaming affiliate marketing that he felt needed improvement and constant vigilance. Lou consistently fought for affiliates to be paid on time. He knew that being an affiliate was a cash intensive undertaking, and knew that late paying affiliate programs hurt the entire food chain of affiliate marketing. In fact, Lou was so adamant about on-time payments, that he

published a list of the fastest paying affiliate programs. Lou also championed new and innovative payment methods for affiliates, and was a driving force behind Affiliate Speed Pay. Lou also championed for fairness and transparency in the affiliate/operator relationship. He believed that the affiliate programs’ terms and conditions needed to be non-predatory, that they needed to be easy to understand and that, once agreed, should not be modified to the detriment of the affiliate. He believed that the affiliate and the program must trust each other, and that neither party should violate this mutual trust. He believed that the affiliate and affiliate manager relationship was paramount, not just in good times, but when problems needed resolution. Whether this is a reminder of the principles Lou shared with you, or if you are a newbie that wants to know what it takes to make it in the world of iGaming affiliate marketing, the lessons of The Professor continue to live on. Lou was truly a pioneer in the iGaming industry, and an example of a role-model that made the iGaming affiliate community the ‘family’ it truly is. If there is one last piece of advice Lou would want to give, it would probably be his personal motto: “Late to bed, early to rise. Work like hell and advertise!”

The Captain The CAP forum is bedazzled with colorful characters. But one of the most active and influential had to be Allan Leonard, aka The Captain. Lou’s best friend and long-term colleague, The Captain passed away on July 27, just 28 days before The Professor. The Captain shared Lou’s passion and values for the affiliate industry. A tireless member of the forum, The Captain and The Professor helped to launch the careers of hundreds of affiliates.

Friends… Reunited By Dominique.

TED LOH

I write this article with a heavy heart. The passing of Louis Fabiano, better known as ‘The Professor’ or ‘Lou’, on August 24, 2010, leaves a big gap in our industry as well as in my heart. This just after his best friend, Allan, passed away. Lou was the founder of CAP, the Casino Affiliate Programs message board. We worked together on it from the very beginning, when there was only a handful of users. Over the years, it grew and grew – it was a vibrant online community in no time. Lou, The Professor, lead the community for many years. He was so good at it because he was one of us, he knew what mattered to us and he stood behind the affiliates every step of the way. He also had a great sense of humor. When a program was late with payments, he would post an image of a cabbage in their forum and ask: “Where is the cabbage?” And, guess what, payments came forth quickly. When anything went wrong with an affiliate program, such as a sudden change in terms and conditions after affiliates had already signed a contract, he would go to bat for us and I can’t think of a single time he failed to achieve the change. Sometimes it happened within days, sometimes it took months, but it always happened. When one of us affiliates fell on hard times, a post on CAP brought forth all kinds of support. CAP became the go-to place for affiliates due to Lou’s tireless work and devotion to the community. Lou and Allan were also two of a handful of affiliates who started meeting once a year in Miami to discuss business and to just

relax and have a good time. Soon, affiliate managers found out about these meetings and started to show up and mingle. Eventually, this turned into the CAP Spring Break conference. It was hugely successful. Upon the passing of UIGEA, CAP conferences started taking place in Europe under the name of CAP Euro. These conferences were, again, the biggest the industry had seen. They live on today under the name iGB Affiliate conferences and they have been held in many corners of the globe. The first time I met Lou in person was at one of the early Miami conferences. I remember sitting in the Hotel lobby when he walked in, accompanied by his good friend, ‘The Captain’, Allan Leonard. Both saw me and their faces lit up and we moved towards each other and met with a huge hug in the middle of the lobby. Allan’s smile was even broader than Lou’s, and his eyes sparkled in a way that no one who met him will ever forget. Alan and Lou were two of a handful of pioneering affiliates and both were already firmly established by the time I arrived in 2001. Over the years, we met at many conferences, Lou and Allan were always there and we had some great times together. But, the good times were not to last for Lou and Allan. After many years, both men began to turn to real estate investments. Allan ‘flipped’ a house, meaning he bought it in bad condition, remodelled it and put it back on the market. Traditionally, these ventures were quite profitable, but the timing was bad and Allan lost his money.

It has come to my attention that Ted Loh, also known as Spearmaster, has also passed away. Ted is well known throughout the industry for his outspoken nature. He was not just a colleague, he was a friend to many people across the globe. While he always stood up for his beliefs, even in a room full of people who disagreed, he always reached the human inside all of us and formed many close relationships. One thing that struck me when I read people’s condolences was that he introduced so many to the industry. He was the first affiliate I ever met in person, and it looks like I am in good company. Throughout people’s comments, he was praised for welcoming them into our niche and always being there for everyone. He tirelessly answered questions (even stupid ones) and always had a gem of advice for you. He founded gottobet.com and he later switched to the operator side of the industry, working for Playtech and others. He moderated at Casinomeister and he was a vocal part of affiliate communities. His straightforwardness and honesty could always be counted on. Often, he held controversial views – and on many occasions, time proved him right. He succumbed to a fight with cancer and without insurance, medical bills weighed very heavily on his family. He leaves a wife and three school-age children. As with Allan and Lou, there are fundraisers all over the communities, Casinomeister, CAP and GPWA. If you would still like to donate at the time this is published, you can still do so to any and all of the funds by contacting the communities. They will facilitate this. Ted, Lou and Allan, while sometimes controversial, contributed much to the industry. They helped set the norm »

iGB Affiliate october/november 2010

In Memoriam

Simultaneously, Lou invested heavily in Florida real estate, also with devastating results. The Florida real estate market collapsed and fell by 50 to 70 percent. Allan took refuge in music; he listened to a lot of YouTube and posted his favorite songs on the message boards. Lou worked hard to recoup his losses, but his health was deteriorating and he was not to live see a financial recovery. Allan’s passing impacted Lou heavily, and on the day of Alan’s funeral, Lou was admitted to the hospital for his final stay there. Lou and Alan are legends in this industry, and Lou’s legacy is much bigger than most of us are aware of. For many years, he stood up for affiliate rights. He was the first to insist that affiliate T&Cs should not be changed retroactively, and several of the larger affiliate programs that are now model programs encountered his persistence when they tried to do this. He laid the groundwork for all of today’s affiliates’ rights. We are still often fighting for our rights, but he is the reason the industry has some sort of norm. Back when Lou started to apply himself for affiliates, there were no norms and no expectations. Many of the newer affiliates may not be

iGB Affiliate october/november 2010

aware of all the things he has done for us over the last ten years. There is a goodbye thread to Lou at CAP with some 100 people testifying how he helped them. He didn’t care if an affiliate was big or small, new or seasoned; he helped anyone who came to him. He left a big hole in the industry, and I don’t think anyone can fill his shoes. But, we must carry on, and if we all try to be as jovial and helpful as my two friends were, if we all try to help each other, if we all stick up for each other, maybe communally we can continue to push this industry into self-regulation and fairness for all who work in it. Personally, I find it difficult to motivate myself to attend a conference, knowing that I won’t be seeing Lou and Allan’s smiles; won’t have a drink or two with them and won’t chat about the industry with them over dinner. I will miss their big bear hugs, their jokes and their advice. But I will make it to London in January, and I will meet with as many programs as I can, and I will continue to support the rights of the affiliate community. Rest in peace, Lou and Allan, I hope you are looking down at us with bright smiles and sparkling eyes.

« for affiliate contracts, and without that norm as a base, things would be helter skelter and all the issues we face today would be a lot graver. We have much to be grateful for. In my mind, I can see Ted, Lou and Allan at spring break in Miami, sitting under Palm trees and sipping drinks while discussing the industry. Perhaps that is what they are doing now. All three had the most infectious smiles and sparkling eyes when they spoke to you, and I will miss their bear hugs and support immensely for many years to come. I am writing this with tears in my eyes. Rest in peace, my good friends.

Memorial Wall As a tribute to our colleagues who are no longer with us, we feature some of the comments and tributes that have been pouring in on the forums at CAP and GPWA. Poignantly, and heartbreakingly, we can see these great friends sharing their sympathies for each other’s loss, before losing their own battles for life and consigning an entire industry to mourning. iGB Affiliate wishes to offer its thoughts and condolences to the families of Lou Fabiano, Allan Leonard and Ted Loh. May they rest in peace.

CAP Forums

GPWA Forums

“It is with a heavy heart and tears in my eyes I write this to say goodbye to a true friend. We shared the ailment (diabetes) and were always teasing each other into ‘eating properly’ and avoiding that one more beer to lose a couple of pounds. Our times together were good! In particular when Lou and I finally met, face to face in Las Vegas at the Paris Hotel courtesy of Casino Coins’ weeklong expense paid trip for us Top 10 affiliates in the world in 2001. Lou and I were the only Americans there for this ‘fun on steroids’ trip! I will never forget our final dinner in the Eifel Tower on our last night in town where we attempted to break CC, and Connie and Dora couldn’t believe the liquor bill!! God bless his wife and daughters. Rest in Peace my friend, this last one’s for you.” Denpubl, CAP Member

“Lou, you were an original. A major driving force in the industry, one of the pioneers in the affiliate world. I will never forget the times we had in Miami, especially with Allan. Rest in peace!” This post, tragically, came from ‘Spearmaster’ Ted Loh, who has since lost his own battle with liver cancer. The thoughts of everyone associated with iGB Affiliate go out to Ted’s family.

“This comes as a complete shock and feels utterly surreal. It’s really sad news as Lou was and still is one of the icons of the industry. I met him for the first time in London at the first CAP Euro conference at one of the pub sessions. He left quite an impression and I’ll continue to remember him for the rest of my life. RIP Lou, you are now a legend.” Splinterfree, Senior CAP Member “I am so stunned I cannot come up with many words at the moment. Losing the Captain and now Lou in such a short time is a huge shock. My thoughts and prayers are with Kettie and the family. This makes you put life in perspective. Here is one last one for Lou and Cappie.” Bonustreak, Senior Member and Moderator “Captain you’ll be sorely missed... guys like myself who had their baptism-by-fire into this business, by yourself and other of the ‘Old Guard’, have a lot to be grateful for. Our prayers are with your family at this time.” Shane, New CAP Member “I cried so much reading all about his (Allan’s) daughter a few years back. It seemed like this family just really dealt with so much! I will pray for Patty. Things like this remind us how close we get to people we don’t know online, without ever personally really talking with them.” LadyHoldem, CAP Member

“I am deeply saddened by the passing of Lou, both as a member of this industry and as a human being. His loss – along with other recent sobering events – has served to remind me of my own mortality, and the limited amount of time each of us have. No one is guaranteed a tomorrow. In the confusion and competitiveness of online gaming, Lou may have lost his way at times. But I believe he always wanted the right things for his family, his friends, and his industry. I hope that in his passing, Lou finally found the peace I believe he so desperately wanted. And that somewhere right now, he is laughing with his best friend, Allan, without the earthly worries, pains, or constraints that burden us all.” Excerpt from post by J Todd ‘Integrity’, APCW Executive Director

“Allan Leonard was always like a brother to me and will forever be in my heart and prayers. Captain, you’re the best!” The Professor shares his grief for his great friend, The Captain, just days before his own life was cut so tragically short “Ted, you were one of the first webmasters I knew well, and I both respected you and considered you a good friend. Rest in peace brother. Ted was one of a small circle of folks I’ve known for years that I always tried to sit down and spend time with when we were at the same conference, and that happened pretty often. I first got to know Ted well when he and I and a few other webmasters would meet to provide advice and input in the early days of eCOGRA about what we thought they could do to make a difference. He was one of a very small group of early pioneers that earned my respect and with whom I choose to state that publicly by exchanging links or promoting their sites – Ted of Got2Bet plus Casinomeister, GoneGambling, Wizard of Odds and Gambling.com. Ted, I always enjoyed our times together. I’ll miss you friend.” Michael Corfman, GPWA Executive Director

iGB Affiliate october/november 2010

In Memoriam

Remembering The Professor The June/July 2008 issue of what was then known as CAP Magazine, heralded the start of a series of Q&A sessions with The Professor through which he imparted his wisdom to members of the CAP forum. As part of our memorial issue, we look back at the very first ‘Ask the Professor’ article which, poignantly, features two questions from The Captain. A few weeks ago, my friend Bernie (long time member Tarzan/Blackhawk) wrote and asked if it was ok to do a “History of the Professor” Q&A series on the forums. I assumed, after years of posting and speaking at affiliate events, that most people had a pretty good idea of who I was and how I got here, but after thinking it over I realized that there were thousands of new members who probably did have questions and weren’t familiar with me – so I approved the thread. Over the next few issues I will answer five of the topical questions CAP members posted in that thread which is located here: http://www.casinoaffiliateprograms.com/ bb/cap-members-to-interview-the-professorquot-lou-quot-founder-of-cap.26659.html?

“In times of personal loss we all pull together and help our friends get through it. Our industry and CAP, in particular, is a family. I am proud to be a part of that and it never ceases to impress me.” Q1 and Q2 posted by Tarzan: 1. What type of education do you have? Answer: By trade I am an Electronics Engineer (EE). I am also an MCSE (Microsoft Certified Systems Engineer) and MCT (Microsoft Certified Trainer). Prior to becoming an affiliate, I worked with a major physical security systems manufacturer as a Senior Engineer. 2. How did you meet the other members of your organization like Warren and Alex Pratt or other heavily involved team members? Were they already in the affiliate business? Where you already friends? Who approached who? Answer: I met Warren, who is a

iGB Affiliate october/november 2010

shareholder in Affiliate Media Inc., back in 2002 when he and his partner Raj were running House Winnings. When that venture dissolved, Warren and Raj approached me with a business plan to better monetize CAP so we would have the necessary funds to expand the community. CAP and a number of retail affiliate sites were rolled into our new company. All of the people on our team were experienced affiliate marketers and were brought on board as the business expanded. Alex Pratt (Electric Word PLC) and our company entered into a new Joint Venture to produce and distribute CAP Magazine and handle the organization of our European events.

CAP. Its primary focus then and now was to provide a community where we could share knowledge with other affiliates, learn about what worked and what didn’t in marketing, and where we could warn each other about media outlets and program operators to avoid. I also had two core beliefs: 1. By working together we could all maximize our profits online – a lone wolf approach produced less revenue than a group effort. 2. By communicating with our partners (the programs and operators) we could eliminate misunderstandings and develop winning strategies where both parties prospered.

Q3 and Q4 posted by The Captain

“My motto has always been ‘Late to bed and early to rise. Work like hell and advertise!’”

3. How do you find the time to manage all your day to day business responsibilities? Answer: My motto has always been “Late to bed and early to rise. Work like hell and advertise!” I am generally up and working by 7:00am and stay at it until 10:00 pm Monday through Friday, so I tend to put in a lot of hours. I also have an excellent full-time team which helps keep everything running smoothly. Warren, John, Yvette, Jose, Arjun, Wadin and Aman help even the load and allow CAP to grow at the pace it has. Now, if there were only more hours in the day… 4. What motivated you to start CAP and help new gaming affiliates? Answer: I first started affiliate marketing back in 1997 in the retail sector. In 1998, I ventured into online gaming. In those days it was a virtual ‘Wild West’ in online publishing. There really was no source for a new affiliate to access help or learn the ropes. There were also no communities or message boards through which to communicate with peers. I found myself losing tens of thousands of dollars each month due to fraudulent ad campaigns and disreputable program operators. In 2000, I decided enough was enough and started

Q5 posted by Sara 5. What impresses you most about the industry? Answer: Phenomenal growth would be an easy answer. Another might be the generous income and freedom we have all achieved. But for me the ‘hands down’ winner is the people. Virtually everyone I have met, from affiliates to operators and affiliate managers, has been positively a delight to work with. I have made more lifetime friends in the last eight years in this industry then I did the previous 40. Even though, on paper, affiliates are competitors, we all work together, grow together and share our private lives via CAP. We are all better people for it. When members are sick the group responds and provides support and prayers. In times of personal loss we all pull together and help our friends get through it. Our industry and CAP, in particular, is a family. I am proud to be a part of that and it never ceases to impress me.

In Memoriam

REMEMBERING

‘The Captain’ In memory of Allan Leonard or as he is affectionately remembered, ‘The Captain’, we look back fondly at our affiliate magazine interview with him from our April/May 2008 issue. How long have you been an affiliate and what got you started in the industry? I have been an affiliate since 1999 and feel lucky that I have a role in this industry. The reason I got started was my love to gamble. Another reason I entered the industry back then was due to needing a change from working for someone else. The freedom that I have had has been great to say the least. Having more time to spend with family has been the greatest benefit of all. How has the role of an affiliate changed in that time? The role of the affiliate has become more challenging over the past few years in this industry. Back in 1999, there was more quality advertising that could be purchased and less competition. Good SEO is definitely a must these days to survive. Why do you think affiliate programs have become so widespread in the gaming industry, particularly among well known media brands? The gaming industry realizes that affiliates bring more traffic that converts with their properties. Successful affiliates work long hours and have the incentive to make a lot of money. The gaming industry knows this and will continue to utilise affiliate marketing well into the future. Is the role of an affiliate as important to the industry as ever? The role of an affiliate is more important than ever for the gaming industry to continue to flourish. Affiliates are a cheap

“I have been an affiliate since 1999 and feel lucky that I have a role in this industry. The freedom that I have enjoyed (since working in the gaming industry) has been great to say the least, but having more time to spend with family has been the greatest benefit of all.” work force that is only rewarded when they drive quality traffic to the industry brands. What are the key things an affiliate looks for from an affiliate program? The affiliate looks for honesty in the program first. On-time payments are important to affiliates to pay expenses and have personal monies to spend. Late payments do not build a quality, trusting relationship. Quality marketing materials come in third place for they make the difference in driving visitors that convert. What could affiliate programs be offering affiliates that they are not already? Affiliate programs should not and must not forget the hard working US affiliates. Give greater incentives to market to all countries around the world. Many affiliates are struggling during this time and these extra incentives can make the difference. Recent discussions have suggested that affiliates will go the way of the junketeer and become less and less important to gaming operators with increased regulation. What is your response to this point of view? I don’t agree that affiliates will go the way of the junketeer now or in the future. Affiliates will always be needed to help

market online gaming no matter what. Affiliates drive traffic and new players and this will always hold true. What other challenges are facing affiliates in today’s climate, and what has been your biggest obstacle? The biggest obstacle for me has been the loss of the ability to purchase traffic from the search engines. There are not many quality traffic sources today. Most of the places selling online ads for online gaming are sending fraud traffic. The decrease in revenues is the next big challenge. Affiliates have to be able to pay their bills to continue working at home in this industry. What is your forecast for the future of the market? It’s going to be challenging and only the best affiliates will be able to continue to do this full-time. What would your advice be to any would-be gaming affiliate? Get ready to work some long hours online and have the patience to wait for the rewards to come. It is a very competitive market, much more so than when I first started in 1999. If you’re ready to work hard this industry can be the most rewarding.

iGB Affiliate october/november 2010

Product Feature: Online Poker

When Social Means Business A closer look at casual games by Rene Colin Magri. In the following article, I shall try to give an overview of casual games and the business model and the philosophy (I know they are not that deep) behind them. I contend that, just as the iGaming industry cannot afford, literally, to oversee the importance of social media, not just as a way to get new customers, but also as a channel for retaining, and engaging current ones, the same applies for casual games.

Aren’t all games casual? Not really. Casual games target the mass market. They are usually very simple ‘Ataristyle’ games, with one simple scope: to help the person unwind, take off stress, and enjoy a simple game on the PC or mobile. It is dramatically different to the type of games enjoyed by serious gamers. In fact, there is very little in common between casual games and what we’d term to be more ‘serious’ gaming.

A simple game of cards Hundreds of millions of people became accustomed to playing simple games like solitaire on a regular basis. It comes with Windows and, indeed, solitaire and similar games were the primary cause of employee distraction. Now, admittedly, the crown for employee distraction is in the hands of Facebook and YouTube. Studies on the matter have shown that casual games are thus replacing even TV as a mode of entertainment; so much so, that the value of the casual games market is estimated to reach well over $7 billion by 2015.

Opportunity knocks Companies like Zynga and Playfish have managed to capture an audience in the

iGB Affiliate ocotber/november 2010

millions (making ‘millions’ in the process). Indeed, Zynga has become such an important player in the entertainment space that Google invested money in the company, and will be launching a social games platform very soon. So why are so many getting involved in the social games space? What is so lucrative about this new way of engaging with customers, and admittedly, new ways of monetising customer attention? Games like Farmville and Mafia Wars – both produced by Zynga – each have more than 25 million players playing regularly (a good percentage of them daily). These numbers made Zynga a billion-dollar company in record time (less than five years since inception) and has created a market for others to jump into, and cash-in on. Another company worth mentioning is Playfish. Starting back in 2005, Playfish produced hit games like Word Challenge, Poker Rivals and Pet Society which attracted millions of avid users. The numbers alone are impressive enough, but the levels of return and engagement were equally striking.

Facebook played its part! All the above successes, and others that I don’t have space to mention, are all possible thanks to one particular, omnipresent platform that continues to dominate our online environment – Facebook. In fact, Zynga and Playfish would not have made it to where they are today without Facebook. I dare say that the social games phenomenon would not have attracted all this attention in the first place without the Facebook platform. The platform offered the following elements that made it increasingly easy for game

publishers to achieve the ultimate success for any social game: 1. Reach over 500 Million players; 2. Viral-enabled platform; 3. In-game credits and monetisation possibilities; 4. E xtensive tools for third party integration.

Where does iGaming fit in? Facebook, alongside other social media channels such as twitter, FourSquare and Loopt are becoming increasingly popular – read inevitable sources for customer acquisition and engagement. The game for online brands has changed considerably with the advent of social channels: brands lost control over their central message – they have to always be on the channel, alert, available, and willing to listen to customers and commentators to engage and fulfil the expectations and aspirations of customers both current and future. This, in turn, applies to the iGaming Industry. Social games offer a similar, inevitable paradigm shift for the iGaming Industry. Games like Zynga Poker and Poker Rivals are generating a good chunk of revenue through Facebook credits, virtual goods and other similar monetisation strategies. They are ‘similar’ to the traditional iGaming operators in many ways, bar one: they don’t monetise in the same way. It takes longer, but the engagement – because it is social, and with friends – is more ‘loyal’ and long-term. We all know how expensive customer acquisition and retention is becoming in this industry and, therefore, my contention is that these new ways of engaging customers might become a

life-line for many operators in the field, as it might provide the comparative advantage – the new trend in affordable platform development. Repetitive business models, skinning old offerings and similar tactics are not going to work. They never have, but surely, it will become even more expensive.

A case to follow I don’t want to sound pessimistic. The industry is changing at breakneck speed in some quarters, and some operators, indeed, understood the need to cross-pollinate their offerings and, thus, to go into the casual games market head-on. One such example is 888 Holdings. Recently, 888 bought Mytopia – a company very well established in the social games space. The acquisition will help 888 to connect with their future customers in this new space, and also find new ones in ways that are not traditional to the iGaming space. Mytopia also has a very strong mobile offering, with games available on all the mobile platforms, thus enabling 888 to become significant in real-time, and possibly location-aware (my speculation) gaming.

It is all about your eco-system, buddy! Monetising in casual games is very easy, yet very creative and takes roughly three forms: ads, virtual goods, or a combination thereof. This is all good, and it works wonders. But, the business models that iGaming operators are used to, make the adoption of casual games slightly more difficult than it ought to be. If we take the value of the player to be the amount of money that he/she will spend per amount of hours game play, then casual games monetisation might not be that lucrative compared to the same amount of time a player would spend on a casino – and the amount of money that same player generated for the operator. But, this calculation is wrong. The amount of ‘play time’ a player spends on a casual game will be, by definition, longer and more lucrative. How, you might ask? The point is not how much money a player spends per minute played on the game, but how many times the player plays, for how many minutes, and for how many days – possibly every day, and how valuable, and social the experience becomes. This

makes the experience personal, and this pushes the player to buy goods, or to click on ads, or to buy products advertised, because there is a ‘social element’, and a challenge to do something well in the long-term. There is absolutely no brain-work in a game like Farmville, but the social elements, the challenge of working with or against friends, and to build something that’s yours – read personal – makes the game very sticky, and extremely lucrative as a channel to sell products, in-game premium goods and other similar ways to monetise the ‘play time’.

Games, social or casual, are good money Casual games are lucrative. In very simple words: they are inevitable for our industry to keep thriving as they offer new and more fun ways to engage current and new customers – and thus prompts the industry to push the envelope and join the ‘social’ bandwagon that took the Internet by storm. What makes this important is that we are, by definition, social beings, and such an engagement in our product offerings makes it all the more personal, and remarkable, and will keep them coming back for more.

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ds od iGB Affiliate october/november 2010

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insight

The era of sporadic purchasing of domains and putting up banners at random hoping to make money from affiliate marketing is coming to an end. Affiliates are becoming more sophisticated and business savvy and the affiliate world is increasingly starting to consolidate. Large affiliates are choosing to acquire smaller competitors to increase the network of sites at their disposal and apply their business knowledge to other verticals in order to leverage on their experience and gain from diversification. As the business world is slowly recovering and coming out of the recession, experienced affiliates are becoming more selective about which partners to choose in order to guarantee the best return on investment. Faced with such a situation, what can operators do in order to facilitate the life of these affiliates and ensure that their products gain maximum exposure on these affiliate sites?

Make accurate and relevant statistics readily available to affiliates What is measured can be managed. As in any other business, including the operator business itself, affiliates need up-to-date statistics that can provide information on the performance of the different marketing channels being used, such as websites, media and customer acquisition campaigns, in order to be able to optimize the return from these channels. Most operators offer accurate statistics to affiliates as part of the affiliate software they use; however, it is important to give affiliates the choice to accessing this information in different ways. Larger affiliates, who work with a number of operators, may find it difficult and time consuming to log on to the different affiliate systems of each and every operator they promote to gather the required data. They usually develop their own software that allows either CSV imports or uses web service calls to update the statistics of each program on a daily basis for a general overview on revenues, activity and overall performance. By providing such reporting flexibility, one would be ticking an important box when it comes to facilitating the affiliate’s life. This, in turn, could translate into more exposure on these affiliates’ sites as it is easier for them to track the performance of their marketing efforts.

Pay for performance reward plans The provision of quality statistics in different formats is not enough to

lure affiliates to sign up to an affiliate program. The reward that affiliates finally receive at the end of the month is one of, if not the most essential parts of the operator’s offering. Affiliates must be seen as partners and not merely as an acquisition channel and as such, one must develop a reward strategy based on the quality of each and every partner. Reward plans should be set up in such a way that they reward those affiliates who meet and exceed established targets while at the same time attract new affiliates that have the potential to grow into good value partners. It is not recommended to advertise high standard reward deals as this tends to attract commission hunters or affiliates that are only loyal to operators that provide the highest commission levels. Try to build a loyal affiliate base by offering an attractive start-up commission that increases proportionally to the performance and loyalty of affiliates. Attracting low value affiliates could be a loss-making strategy that could also damage the relationship with high value affiliates as resources would be spread very thinly among the affiliate base.

Empower affiliates – provide innovative media and dare to be different Operators wishing to attract any kind of online affiliate have to make sure that they make online media (including banners and text links) readily available to affiliates. However, with such a multitude of online advertising mediums in use today, it is not enough to supply standard banners and links to convince affiliates that your media can produce a return that is over and above what other operators are offering. It is important to think outside the box and explore methods that make your advertising stand out from the crowd. Another newcomer in the affiliate media sphere is the use of dynamic widgets and online games that are offered to quality affiliates. Such innovative use of media

helps affiliates to offer unique features that, in turn, enable them to attract more customers to their website. This does wonders in helping to establish a long-term fruitful relationship with quality affiliates. Empower affiliates, be innovative and allow new and established affiliates that might have discovered new market niches to experiment. Make sure your affiliate software allows such features as social media tracking links (e.g. twitter affiliate links), mobile tracking and at the same time be open to any request that affiliates may have. Above all, be a step ahead of your competitors in terms of technology and take advantage of any new product launch that might give you an edge. Be sure not to turn down any affiliate request for new media as he/she might be a pioneer and enable you to develop your competitiveness and be a source of inspiration to other affiliates as well.

Conclusion There are only a handful of good quality affiliates and as the affiliate industry continues to consolidate, the ability to acquire these affiliates and retain them will become even more challenging. If you already have a good relationship with these affiliates, you can consider yourself in a privileged position, however, do not sit back and relax as other operators are striving to attract the same affiliates. Make sure that you are always listening to them, treat them as your preferred partners and be a step ahead of the competition. Above all, be transparent as trust is paramount for business relationships to succeed in the long run.

Matthew Castillo is an iGaming and Affiliate Marketing specialist who has experience working for a leading affiliate software provider, providing affiliate marketing consultancy services to a number of leading iGaming operators. Matthew can be contacted on matthew@actifusion.com

iGB Affiliate october/november 2010

INSIGHT

This issue of iGB Affiliate, we look into three major European markets and the recent regulatory and market activity within France, Italy and Spain. Ahead of iGB Espana, we begin with a legal insight into the Spanish market with Xavier Muñoz Bellvehí, Partner, ECIJA. Three years ago, an executive from a certain online gaming company told me that Spain was a ‘goldmine’ for gaming operators. There were no laws for online gaming, the existing laws were not enforced and operators just provided their services to Spanish users without any problem. The situation has not changed. On December 28, 2007, the Spanish Congress passed a motion within a Law obliging the Spanish Government to develop nationally-binding regulations allowing for remote gaming and betting activities. Following such motion, the Spanish Gaming Commission, formed by representatives from the Estate, the 17 Autonomous regions and the State-owned Lotteries and Bets organization (“LAE” – Loterías y Apuestas del Estado) has held various meetings, although no regulations have yet been approved. It is certain that Spain will regulate and permit online gaming, however, we just do not know when this will happen. The Director General of LAE mentioned some months ago that the new Law would be passed before the next general elections, which are in 2012. It is quite probable that no regulations will be passed until then. At the moment, there is not even a public draft of the new Spanish Gaming Law. The expected legal framework would grant the necessary legal certainty to remote gambling operators: they should be able to apply for an authorization in Spain and provide their services. However, until the new regulations are approved, current legislation is still relevant to operators active in Spain. This article analyses the relevant legal provisions regarding online gaming and betting in Spain as they currently stand and the tendencies for the new regulations to come.

Distribution of powers between state and autonomous regions Article 149.1 of the Spanish Constitution does not grant the Spanish State jurisdiction over the activities of casinos, gambling and betting. Thus, the 17 autonomous regions, with the exception of Ceuta and Melilla, have assumed exclusive jurisdiction over such activities by including them in

iGB Affiliate october/november 2010

their respective Statutes of Autonomy. This system produces some difficulties when casino games and gambling activities are carried out via the Internet, offering their services in some or all of the regions, other states or even throughout the entire world. The most respected legal opinion is that state jurisdiction may overrule the regional jurisdiction for any type of gambling or betting activities that exceed the territory of one region. However, this remains a complicated issue. Both, the state and the regions have developed specific regulations related to gaming activities. However, most of these regulations refer to traditional forms of gaming in general and do not make specific reference to online gaming (most of the existing legislation is prior to the emergence of the Internet). In this regard, it is worth highlighting the laws of the region of the Basque Country, the Madrid region and the region of Catalonia (with a recently approved law), all of which mention the possibility of including online gaming amongst those gambling activities catalogued and authorized in the region. In relation to the Madrid region and the Basque Country, online betting regulations were developed to allow the authorization of both physical and online bets. Authorizations have been granted to various street betting operators (Sportium, Victoria, Winners…), who are providing their services in those regions. They are currently also expecting a new authorization allowing them to provide online betting within the region.

Current prohibition of online gaming and betting in Spain At the end of 2006 and within the annual State Budget Law, the Spanish Government changed some laws in order to criminalize online gaming and betting activities provided by national and foreign companies without a Spanish authorization. Thus, under these new regulations, it is not enough that those companies rely on an authorization from a third country, even from a country within the EU. The law establishes that the following activities will

be considered a crime of contraband: “the sale, import, traffic and production of tickets, stamps or any other support of lotteries, bets and other games organized or issued by foreign persons or entities is forbidden on Spanish territory.” As a result of these regulations, since January 1, 2007, the offering of games of chance via the Internet by Spanish or foreign entities is clearly illegal if provided without an authorization from the appropriate authority in Spain – authorization which can not be obtained in any way. This is how the regulations stand and, in spite of the various moves towards liberalization and the fact of the laws not being enforced, the mentioned prohibition has to be taken into account. In-line with the prohibition above, the advertising of any of these online activities is also clearly forbidden, when those games lack the obligatory administrative authorization. Again, the laws are not being enforced in this case.

Spanish regulations in light of the European Union principles As a member of the EU, Spain is subject to the principle of free provision of services between Member States, which includes gaming and betting. Basically, this means that Spain cannot establish restrictions on a company based in another Member State when offering its services to Spanish users. Nevertheless, the European Court of Justice (“ECJ”) in its landmark case, Gambelli (January 6, 2003), determined that restrictions imposed by one EU Member State on the activities related to gaming, lotteries and bets from another Member State may be perfectly justified for reasons such as public interest, consumer protection, fraud and crime prevention, public order, trade, cultural, ethical and economic reasons of the Member State that receives such services. The application of the above mentioned exception to the basic rule of free provision of services between Member States must also be applied in a congruent and fair manner. In this regard, the ECJ – in its resolution of the Placanica case (March 6, 2007) – points out that if the regulation

of a Member State restricts the exercise of betting (specifically sportsbetting) to companies established and licensed in other EU countries and denies them the possibility of obtaining an authorization (while these authorizations are obtained by the domestic companies or else the service is lent by means of a state monopoly) that behaviour constitutes a restriction to the freedom of establishment and to the free provision of services as guaranteed by the EC Treaty. Invoking the public order exception when sportsbetting is already permitted in the Member State and other entities are offering and actively promoting it there, is, in principle, not allowed. In this regard, the last decision from the ECJ, published on September 8 this year, declared that the state monopoly system in Germany is illegal and not in accordance with the EU principles. The ECJ stresses how the German state monopoly runs intensive publicity campaigns in order to increase its profits from lotteries and other games. Therefore, it considers that such monopoly does not follow the objectives of prevention and public order in relation to online gaming, which would be the only ones which could justify such a monopoly. In Spain, since 2005, LAE has been the only vendor authorised to sell its products online. Also, some regions already foresee online gaming in their regulations. The Spanish online gaming monopoly regime could easily be perceived to be similar to that in Germany. Therefore, perhaps the Spanish legal system could be deemed outof-line with EU principles and, therefore, be illegal. This is a strong card that online operators providing services to Spanish users can play if, at some point, they are fined by the Spanish authorities.

Moves towards regulation In December 2007, the Spanish Parliament passed Law 56/2007, containing measures to boost Spanish information society. The 20th Additional Provision of the law obliges the Spanish government to regulate gaming and betting activities in Spain. It then sets out a list of principles which will need to be followed in the drafting of such new regulations. However, the law does not establish a deadline for all this to happen. This law has yet to be passed and it is not expected to be signed into motion until 2012. Although it is unclear when the new regulations will be approved, in 2007, the Spanish government expressed its opinion

on online gambling in a law and is obliged to draft a future law to regulate the activity. Again, after such opinion, it is difficult for the Spanish government to prohibit online gaming to EU operators under the grounds of public order. The principles that will guide the Spanish government are below, as translated from the law’s 20th Additional Provision: “The government will present a Proposal of Law in order to regulate gaming and betting activities, in particular those activities developed by means of interactive systems based on electronic communications. The above mentioned proposal shall follow the principles set out below: “1. To ensure the compatibility of the new regulations with the applicable regulations in other areas that are related to these types of services; in particular, with regard to the regulations relating to the protection of minors, the protection of youth, the protection of especially sensitive groups of users as well as of the protection of consumers in general, and of personal data and electronic services regulations. “2. To establish new regulations on the provision of gaming activities by means of interactive systems following the rules and the general principles of European Union law. “3. To create a system of control for gaming and betting activities provided by means of interactive systems, which ensures secure and fair market conditions for the operators of such systems as well as suitable levels of protection for users. In particular, the new regulations shall regulate the activity of those operators which already hold an authorization to provide the above mentioned services granted by the authorities of any Member State of the European Union.

“4. To establish a tax system for gaming and betting services provided by means of interactive systems taking into account the origin of the transactions being subject to taxation. The above mentioned regulation shall also foresee a tax distribution system between the State and the Autonomous Regions with regard to the revenues obtained from the taxation of gaming and betting activities provided by electronic means within Spain, and taking into account the specific tax status of the historical regional regimes. “5. Gaming and betting activities using interactive systems based on electronic communications shall only be provided by those operators duly authorized to do so by the competent Public Administration [authorization], which can be obtained by fulfilling the established conditions and requirements. Operators that have not received such an authorization shall not be allowed to perform any activity related to interactive gaming and betting. In particular, the necessary measures to prevent advertising in any way shall be put in place, as will the prohibition of using any existing payment system in Spain. Furthermore, the operation of gaming and betting activities by means of interactive systems without holding the relevant authorization shall be fined in accordance with regulations relating to the repression of smuggling/contraband. “6. The jurisdiction for organizing gaming and betting activities developed by means of interactive systems shall correspond to the General Administration of the State whenever the scope of such activities is the whole national territory or more than one Autonomous Region.” Besides these principles, for online operators and their affiliates it is important to know the

iGB Affiliate october/november 2010

INSIGHT

resolution approved by the Director General for Spanish Lotteries and Bets on June 18, which set out the following requirements for online betting. These are applicable exclusively to LAE, however, these can be a very useful guideline to assess how to comply with certain requirements in Spain: “1. Bets will be made at the website www.loteriasyapuestas.es, although the Loterías y Apuesas del Estado organization is allowed to use other domain names. “2. Participants must register completing their user name, password, date of birth and email address. However, additional data may be requested. “3. If the participant wins a prize above 600 he will need to identify himself properly in order to obtain payment. “4. Bets from users in other countries are

not allowed and shall be prevented. “5. Participants must use an electronic bank account authorized to operate in Spain and from a bank registered within this system. Such bank account must belong to a person a residence in Spain. “6. Bet payments can also be made with secured bank cards issued in Spain, in which case, participants will also need to provide a bank account to receive any payment of prizes. “7. Taking bets with this system will only be possible when the central system of Loterías y Apuestas del Estado is generally taking bets. 8. The maximum amount to have in the participant’s betting account will be €200. This will also be the maximum amount for any bet.”

For those operators interested in entering the Spanish market, it is important to note that once Spain issues its Gaming Law, it is most probable that it will then start acting against any operator which is not providing its services with authorization and under the compulsory requirements. At that moment, once the new regulations are in place, we think that the Spanish government will enforce its regulations. XAVIER MUÑOZ BELLVEHÍ is a Partner at the law firm ECIJA. Xavier advises on all areas covered by the firm including internet, telecommunications regulatory law, investment in Spain and corporate transactions.

Madrid Hold’em Overview of the Spanish iGaming market, by Willem van Oort and Manuel de la Marta. A few years ago, Spain seemed to be the number one up and coming marketing for iGaming in Europe. That promise has not fully come true. The regulators have not helped, hence the title of this article ‘Madrid Hold’em’. Although the legislators have announced many times the regulation of online gaming in Spain, this has not happened to date. And the consequence is that it seems more likely that the regional authorities will issue licenses during the coming months. For a full overview regarding the legal situation here, I refer to the preceding article by Xavier Muñoz Bellvehí.

In the meantime, the market has matured slightly and is thought to be worth about 550m GGR in 2010 (source GBGC). However, in the intervening period, France and Italy have opened up their markets, taking away the focus on the Spanish market.

Poker has seen an incredible growth during the past 18 months due to the TV exposure of the various platforms. Of course, betting levels during the 2010 World Cup were significantly high, especially given that Spain won the tournament. On the publishing front, most media companies now have policies regarding the acceptance of advertising for online juegos de azar. Bingo and casino are lagging, compared to international market penetration, and the GBGC data shows that the largest steps forward are expected in these areas in the coming years. Better product localisation for the Spanish market and not a straight copy of an international product is, I believe, the key driver of this. After all, bingo clubs and casinos look different than in other countries, and the game play is significantly different, contrary to poker, for example.

Changing times

Affiliate marketing

The internationally renowned economic crisis in Spain does not contribute to this either. Online access penetration, however, has increased, payment methods are more widely available and five of the top Spanish Liga (football) teams now have a betting sponsor.

The affiliate market has seen a slight increase during the last few years, with two large affiliates merging forces. However, most affiliates focus on sportsbetting, as this is the most popular product in Spain and, therefore, the easiest to promote.

�500m and growing

Poker and betting

iGB Affiliate october/november 2010

Apart from the legal situation, another reason for the slower evolution of affiliate marketing in Spain is a lack of professionalism in the market, and this is the main reason why most of the traffic generated by affiliates is coming from just 15-20 percent of them. We have also seen a more than decent increase in poker affiliates. Bingo is also growing, although slower than expected, and casino is the most complicated product, as in any other market. In many cases, the relationship between the affiliate manager and the affiliate is something personal, and some companies are not being able to deliver it. On the other hand, those companies providing better support to their affiliates are really making the difference.

The Future: mañana may happen soon What the future will bring is not clear. Regulation will play an important role in this. From now until Christmas, many changes are feasible in Spain. Whatever the changes are, the interests of the media owners and the land-based operators will give fruit to many discussions regarding the (limitations of) the marketing of online gaming and those best prepared for these changes will emerge as winners.

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12/11/2009 17:23:31

INSIGHT

The Italian iGaming market opening sounded the figurative ‘starting pistol’ for a new form of regulation in Europe and this year is set to tell us more about future prospects in this buoyant marketplace. The Italian online gaming market will come of age at the end of 2010 when the first licensed operators will be able to launch casino games for the first time. Although online slots will not make an appearance until March 2011 – in order to provide time for recently introduced VLTs to get established in the offline world – operators are still confident that a mix of roulette, video poker and dozens of variants of “games of chance at fixed odds”, as they are legally denominated, will ensure that the already buoyant online business will see another round of major growth.

Landscape in numbers Internet betting and gaming is already big business in Italy. Online sportsbetting typically turned over an average of around €130 million per month during the football season, up 20 percent on 2009 figures, whilst online poker and skill games peaked at almost €300 million turnover in January of this year and by August, the year’s total had already passed the €2 billion mark, up 50 percent on the previous year. Online bingo, although still to be fully rolled out, now adds another €10 million a month to the statistics whilst horseracing, online scratch cards, numbers games and pools products take the total spend on all products to an average of around €400 million per month, over €3.2 billion so far this year (to August 2010). It is not only the turnover figures that are attracting overseas operators to acquire licences in the country. Italy may be the fastest growing market in Europe, but it also has levels of taxation that, although not on the levels of ‘fiscal paradises’ like Malta, Gibraltar and Alderney, do allow companies to manage profitable businesses. Cash poker and online casino games (both due to be launched in December 2010) will be taxed at 20 percent of gross margin. Online bingo rules allow a maximum rake of 30 percent for operators whilst duty is levied at 12 percent, leaving a maximum net margin of 18 percent. Tournament poker has a levy of three percent of the buy-in, but operators

iGB Affiliate october/november 2010

are allowed to rake 20 percent, although, in practice, increased competition and the transfer of punters from dot com sites of companies such as PokerStars has lowered the average take from the pot to around 12 percent, still leaving nine percent margin for operators. Sportsbetting has seen the duty level fall over the years and now has a formula that taxes single bets at two percent of turnover and multiples and other bets at five percent giving an average of around four percent.

Maturing market The online sector is also growing up and leaving behind its dependence on offline affiliates known as Punti di Commercializzazione (PdC). For the second half of the decade, thousands of bars, Internet cafés and standalone outlets have provided Italian punters with the opportunity of using PCs and broadband connections, an important benefit in a country which traditionally lagged behind the rest of Europe regarding Internet access. The outlets also allowed players to fill out their contracts that were required for registering with online operators (which, in future, will no longer need to be sent by post to the operator) and to top up their online accounts in cash. However, the fall in price of PCs, increased availability of high-speed Internet connections and, above all, the change of product mix are driving more punters direct to gaming sites. Whereas betting is very much a social phenomenon, poker and particularly casino games are products which are played at home, and indeed by a younger more affluent and Internet savvy demographic. This move away from the traditional model of retail outlets promoting and facilitating online gaming to players transacting directly is increasing the opportunities for online affiliates to drive traffic towards licensed websites. In the past, it has been the dot com sites which have benefited from the activities of online affiliates, their role in particular having

been to assist operators to bypass the blocking carried out by the authorities. Now, they are increasingly refusing deals from overseas operators in favour of companies licensed in Italy, aware that they would be risking severe penalties by continuing to promote overseas sites and also recognising that mainstream Internet users in Italy are increasingly interested in gambling of all forms. Only two or three years ago, few operators were equipped with sufficiently sophisticated affiliate management software, however, with the arrival of more overseas operators such as PokerStars and PartyGaming, and the introduction of more advanced gaming platforms by the likes of bwin and Eurobet, affiliates are now more able to show how their activities can be effective, and, of course, ensure they are being paid for the players that they have brought to operators’ sites. Having already been transformed by the arrival of tournament poker in September 2008, the Italian online gaming scene is now ripe for a fresh revolution at the end of the 2010 when online casino brings a new breed of gambler online.

Graham Wood is director of iGaming Consultancy, a specialist firm advising gaming operators seeking to develop business opportunities in the newly liberalised markets of Italy and France, and providing market research and market intelligence on gaming throughout Europe.

The French iGaming market opened four months ago, and as one of the historical markets for Gambling Affiliation, we’ve been following the impact of the opening on the affiliate sector very closely. Capacity of newcomers to take a stake in the market Despite the fact that newcomers to the market didn’t have the knowledge of the more ‘experienced’ domestic companies, operators like Sajoo and Eurosportbet were actually very successful in recruiting new players. They are building strong positions in the French market at the moment but it has the potential to evolve quickly as more operators are awarded a French licence. The capacity to survive financially (as long as the taxes are high) and the quality of the product will, ultimately, be the defining factors.

Impact of the high level of taxes on iGaming operators’ margin Operators are complaining about the high level of taxation whilst having to finance massive marketing and communications campaigns at the same time. This will lead to merger activity within two years. Operators are not looking at immediate profitability but within a maximum of two years, the market will consolidate because a drop in tax is not something you can forecast in France considering the coming Presidential election in 2012. No politician will risk cutting gaming tax before the 2012 election, so with that in mind, the biggest, or those with the most money, will be able to hold on until (potentially) the level of tax is eventually cut. Don’t forget that France, as other European countries, is not in a good financial position; largely indebted, the government needs money and I doubt it will cut the tax on iGaming operators for this reason.

Blocking of illegal operators The French Authority, ARJEL, was supposed to block illegal operators but it has been proved impossible so far. However, you can’t

really build a solid brand in France without access to mass media advertising which is only possible if you have a licence.

Big competition between operators Despite the fact few licences were granted at the very beginning, now we are seeing more and more operators being awarded French licences.

French iGaming affiliates’ position regarding the new law 98 percent of affiliates targeting the French market decided to work solely with licensed operators. It’s understandable, and at the same time, many operators ceased promoting their brand in France to be able to succeed in the licensing process. This could explain why newcomers were able to recruit a huge amount of players quickly through affiliate deals/partnerships.

Google As expected, Google now has a big influence in the French iGaming market. 30-35 percent of the total depositing players recruited by operators are done so through Google AdWords advertising campaigns (affiliate marketing represents 30 percent maximum, with the rest coming from direct recruitment). Google can be considered as a ‘winner’ in this market opening.

The impact on affiliates First of all, the activity is now legal, so affiliates can now work in good conditions, raise money, and capitalize on their business activity. The impact of high taxes on affiliate commissions (for CPA deals) is not that important for now, as there is a huge amount of competition going on

“There will be a consolidation process in the affiliate sector, as CPA commissions will drop to a level that varies with the evolution of the taxation on gambling operators.” between operators (especially with the newcomers). This competition should last two years maximum. Further down the road, there will be a consolidation process in the affiliate sector, as CPA commissions will drop to a level that varies with the evolution of the taxation on gambling operators. Still, affiliate marketing will remain one of the most effective ways to recruit players, and should represent 30 percent of the total number of players recruited. In summary, in the coming two years before the next presidential election, competition between operators will intensify, which will lead to a consolidation process due to the tax rate remaining ‘fixed’ as long as it is politically risky to alter. I believe this is key if you want to understand the French market. As for affiliates, as long as there are numerous operators, thus competition, they are in a good position. But in my view, you can’t just focus on one market as an affiliate. If you want to survive political, legal or financial events that will have direct impact on the market you can target and the level of commission you will receive, then diversification is key.

Fabrice Drouin Ristori is Founder of Gambling-affiliation.

iGB Affiliate october/november 2010

INSIGHT

A tale of bonding between TV and affiliates. After a turbulent youth, online gaming is slowly becoming an established and regulated industry in an increasing number of countries. In view of recent legal developments in Germany, Austria, and some US states, this trend will only gather speed. While this is great news for players – allowed to indulge in their favourite pastime within the boundaries of a secure, regulated environment – it raises questions as to how this is affecting affiliate marketing. Where in the past affiliation marketing has been a major source of traffic in unregulated markets, the trend towards regulation frees gambling advertising from the shackles of its underground roots. In mature and emerging regulated markets, Above the Line advertising (ATL) has become a very attractive proposition. With television, print, radio, sponsorships, billboards, endorsements and online partnerships now vying for the lion’s share of the marketing budget, affiliates do face steep competition. Or do they?

A hungry Goliath It’s easier than ever to assume that online affiliate marketing faces increasingly tough competition from ATL advertising: while the online gaming industry is heavily indebted to affiliate marketing for its meteoric rise, the marketplace has evolved a great deal, and the deck of cards has been reshuffled. The industry has seen more than its share of listings and consolidations in the past few years, while big brands have entered the marketplace. Combine increasing marketing budgets with the relaxation of advertising laws and declining moral concerns and you get new synergies between ATL advertising and the online gaming industry – the new wealthy kid on the block. In the matured UK market, not a day passes without being reminded that our industry is a marketing force to be reckoned with: sporting events and TV show sponsorships, football kit contracts, print, radio and TV ads – you name it. In the emerging French market, gaming companies are investing wildly in ATL land grab strategies. It’s the Wild West reloaded, where scores are settled via

iGB Affiliate october/november 2010

billboards and celebrity endorsements. Increased ATL spend sometimes sees affiliate marketing become less of a priority for the undiscerning operator. In fact, there have been instances of gaming companies handling such a shift in rather ungraceful ways, leaving their affiliates badly bruised.

There’s something about David Despite all of the above, the future remains bright for affiliates, as wise acquisition and branding marketers aim for balance to avoid the ‘eggs in one basket’ conundrum. Industry reports show that affiliate marketing as a whole is growing very healthily year on year, with more and more mainstream brands, all industries combined, jumping on the bandwagon. The increasing choice for affiliate networks and consolidations in the sector suggest that affiliate marketing will operate under blue skies for years ahead for advertisers and publishers alike. Looking at gaming affiliation in particular, recent years have seen many large UK gaming brands (land-based bookies spring to mind) step up their affiliate strategy through in-house affiliate programs tailored to gaming affiliates as well as multiple offers on traditional affiliate networks. If that’s anything to go by, it strongly implies that affiliate marketing is still considered to be an integral part of a large gaming company’s acquisition mix. ATL brings branding and volume, but does it necessary bring quality? That’s no secret: nothing beats targeted traffic when it comes to value. Gaming affiliates do not have the reach of online media corporations but they have something else: they’re numerous, and Internet users come to affiliate sites with a purpose, an initial drive towards enlightenment. It’s a different ball game: ATL is about putting your brand in front of unsuspecting eye balls; affiliation is about listening to what users look for, and helping them to find it. Finally, there is more to online gambling than solely large operators. There are still hundreds of well-run small to medium-

sized gaming operations out there, who cannot fight in the same arena as the titans for obvious financial reasons. Weapons need to be different, and in that arsenal, the affiliate weapon is still by far one of the most efficient ways to allow any business to thrive through cost effective acquisition.

“Everything is connected, whether advertisers want it or not. The butterfly effect permeates advertising.” A collaborative approach? Our experience with integrated acquisition campaigns highlights how pointless boundaries really are. Everything is connected, whether advertisers want it or not. The butterfly effect permeates advertising. As an operator, learning to go with the flow and let all acquisition sources support each other freely – or better still, encourage them to – means a far more efficient system to leverage exposure. In the long run, the benefits of pushing ATL content to affiliates and incentivising them to generate buzz around your offline activities far outweighs the risks, i.e. collateral affiliate costs and traffic cannibalisation. In layman’s terms: David bigs up Goliath; Goliath repays David with increased brand awareness, improved Click Through Rates, and better earnings. The future, as we see it, is a revival of hippy values. Peace, love, support, happiness. David and Goliath walking hand in hand towards the setting sun. Pierrick Leveque is Head of Acquisition at Virgin Games, managing the in-house affiliate program as part of the overall acquisition strategy. Virgin Games Affiliates was voted ‘Affiliate Program of the Year’ at the 5th annual EGR Awards 2009 ceremony, ‘Best Casino and Gaming Affiliate Program’ at the A4U awards 2008. Pierrick also received the ‘Best Bingo Affiliate manager’ award at CAP Awards 2009.

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INSIGHT

What will a five to ten percent increase in conversion mean for your business? If you can improve your average revenue per customer by ten percent or have your customers deposit more often what will that look like for your profit line? These are all tangible opportunities that in this recession-wrought economy and in this competitive iGaming space, we hanker after but find difficult to deliver. How do we create this kind of change in our business? Strategy is a word that gets most small or medium sized online business owners yawning, looking at their watches or opening up the next daily report on their blackberries. In our tactically driven entrepreneurial environment, somewhere along the line we decided that strategy was irrelevant and it was more important to do rather than think. No bad thing either, given the success many have enjoyed within our burgeoning iGaming sector. The Gods of ‘right place, right time’, ‘a fair wind’ and ‘blood sweat and tears’ have all helped us capitalise on the zeitgeist that was online gaming. A few years later though, we have ended up in a market that is cluttered, and targeting a customer that is over served and demanding much more for less, or nothing. The recession or competition is often blamed when we find our business growth has ‘plateaued’. How do we now take that big leap forward which will give our business clear space from the competition and quantum growth? As in all things in life, there are no silver bullets but rather, a combination of factors. At the heart of all these factors is a mantra we at Motive regularly apply: “think more, do less”. It’s also important to choose the focus and structure of your thinking as random thinking is as harmful as tactical doing. So, here are some top tips from our team at Motive that can help shift your business up a gear.

iGB Affiliate october/november 2010

Your boss – your target customer A few simple questions about your boss: ●●Who is your target customer? ●●How is your target customer defining the marketplace and how do you fit into their definition? ●●What is the journey your customers undertake to find you? ●●How do you keep your target customer motivated? ●●How are you perceived by your target customer at every single touch point – are you schizoid or coherent and are you consistent in all you do and say at every interface? ●●How do you get your target customer to want to spend more time with you?

Your rivals for your boss’ affections: ●●Who

are your competitors? space exists between you and your competitors? ●●What space can you create between you and your competitors? ●●How does your target customer interact with your competitors? ●●What

Your own business: ●●What

makes your business money? do you spend your time doing? ●●How can you make more from your existing traffic? ●●How can you find more of the right types of customers? ●●What

These are simple questions, but they flow through into important pieces of work, spanning: ●●Marketplace

positioning USP and key proposition – what your business stands for in the customer’s mind

●●Your

●●The

user journey and optimising the online experience ●●The golden grails of conversion and retention ●●Reworking the way you operate and structuring your resources to deliver the plan ●●Taking your refined product and usercentred approach to your marketing plan Since early 2009, we have been working with ecommerce, iGaming and home shopping clients and affiliates, helping them to realise that the solution to their growth issues were, by-and-large, externally defined but internally solvable. The approach we take is always strategic in nature, data-driven and most importantly, focused on return on investment or meeting a goal or target defined by our clients. For your business to succeed, clear space, fresh perspective and emotional distance is vital when you are thinking about the future. This is hard to do for a business employee or owner as there are a lot of personal dimensions in the relationship you have with your business. Working with a strategic consultant gives you the affordable and invaluable benefit of an experienced, external perspective on your business. Michael Braga is a Director of Motive Marketing Services, a consultancy offering iGaming businesses strategic marketing services spanning marketplace position, product and brand development, retention and conversion enhancement, organisational and team structuring and marketing planning and can be contacted at mbraga@ motivemarketingservices.com.

INSIGHT

It’s an old expression you’ve probably seen me write about before. But, it’s an expression that continues to push me into finding new and exciting opportunities and one that can also prove to be something of a safe haven. Let’s face it; if you keep all of your eggs in one basket, and the basket drops, breaking your eggs, you have no eggs left. This axiom also applies to your business in two different ways. First of all, just as you would lose all of your eggs if you dropped your basket, your business would probably disappear if something happened and you were about 80 percent exposed to maybe one market or even one vertical in one market. For example, if you were primarily US-focused then your business probably came very close to a standstill about four years ago. And assuming your website was 70 percent French casino targeted, you are probably experiencing some very hard times today. Or, what happens if you only had a rev share deal in place for French casinos? Secondly, keeping your eggs in multiple baskets, gives you multiple opportunities for people to find your eggs. By using a mixture of multiple practices you are increasing the likelihood of the search engines finding you. One of my clients, for example, started seeing his revenues decreasing. No matter what level of revenues you are on (in this case, it was upwards of six figures per month), when earnings start moving south, bells should start sounding. When I first started in this business, my expertise was increasing commission rates for my clients. With this particular affiliate, I was already getting him the maximum, so the answer wasn’t in pushing up the CPA. Instead, we started reviewing the site, the resources available to us and over a three-month period, we started testing a few things to see where and how we could increase revenues again.

Areas of diversification to explore Think of diversification as a form of business insurance – you are protecting your business from the unknown. Some webmasters find the prospect of diversification either intimidating or too much work. So how does one branch out?

iGB Affiliate october/november 2010

Well, let’s keep things simple and look at just two options.

1. Content/news feeds When was the last time you added an article to your site? Has your site become static? Have people stopped coming back? Is it because you can’t be bothered to add new content? How about trying to get submitted into Google and Yahoo! news for example? Besides noticing an immediate uptick in your traffic, submission here can also show long-term rewards to the webmaster. By being in the main news feeds, you appear on the first page of the SERPs (search engine results pages) for a particular keyword in your vertical for the period of the story. It’s a great way of getting authority over the longer-term; and not to mention, a great way to attract links. In fact, you can even look at news feeds as killing not just two, but several birds with one stone. After the traffic from that story has passed, unlike an old newspaper, your story gets indexed and starts to appear for some great tail searches on an ongoing basis. Once a feed is in place, Googlebot starts to visit you daily, meaning that changes to your site will start getting indexed within 24 hours. Many websites and blogs also scour Google News to come up with ideas for new stories. If your site starts being perceived as an authority it’s a great way of getting oneway links. And one-way deep-linking from many different quality websites is probably the best way to climb up the SERPs.

2. Mobile marketing Mobile marketing may still be very much in its infancy but, certainly, the early adopters will reap great rewards. A great advantage of mobile marketing is hindsight! Think about the knowledge you have today about something that is like the Internet was ten years ago. It’s like back-to-the-future all over again. Betting on the move and betting from a stadium when a match is underway is

“Some webmasters find the prospect of diversification either intimidating or too much work. Think of diversification as a form of business insurance – you are protecting your business from the unknown.” exactly what sports gamblers are seeking. So much so, that in-play betting now accounts for over 50 percent of most sportsbook revenues. With figures such as these and with the European mobile betting market alone being valued at around €1 billion, now should be the time to start ‘mobilizing’ your business. Everything today is evolving so fast. Change is taking place on a continuous basis. We don’t have to reinvent the wheel or be pioneers, but you have to keep thinking of new ways of bringing traffic back to your core business. Your average Internet user today keeps getting savvier. He has wised up. He understands the Internet more and knows where and how he can find the best results for his search. You have to start breaking out. Get your eggs into more baskets. It’s time to find more channels that expose you and keep you engaged with your audience. Evan Shein has been involved in affiliate marketing for over five years and runs Toptieraffiliates.com. For the last three years he has focused his attention on providing a very niche service in helping affiliates of almost all verticals monetize their website traffic. Evan can be contacted at evan@toptieraffiliates.com

webmaster world

8 Eight Simple Rules for Email Marketing Campaigns

One of the most effective online marketing techniques used today is email marketing. Marketers direct their messages to an audience that has opted to receive regular communications regarding latest developments and special offers. In affiliate marketing, building an email list gives an affiliate an excellent opportunity to reach out to targeted customers who, if approached properly, can convert into profitable customers. Here are eight simple rules for executing successful email marketing campaigns.

Know the rules Step one is to be familiar with, and adhere to, the rules of email marketing. Most importantly, you must have an opt-out clause that appears as a link on the page that readers can follow to opt out, as well as an actual email address that readers can use to request removal. Similarly, your opt-out list should be updated regularly and should be held in confidentiality.

Subject line A strong subject line that is catchy and meaningful will prompt readers to open the email and read its contents.

iGB Affiliate october/november 2010

It can be very tempting to write your subject line like an advertisement, but this is rarely successful in generating good open rates. Subject lines should inform readers of what they will find inside, should be relevant to the content of the email and should be short. For example, “Sign Up For This Fantastic Casino Who Offers Slots” won’t speak to the reader and will go straight to a receiver’s deleted items. One word of advice: make sure that you have an up-to-date list of ‘spam alert’ keywords and refrain from using them in your subject lines. Otherwise, you risk never reaching your target audience.

Relevant, highly targeted copy The intention of your copy is to inform readers that you have products or services that they want. It should build that bridge between the product and/or service, and the ability of your intended audience to obtain it from you. For instance, if your campaign is geared towards a bingo audience, it may use slightly different language and graphics to a campaign targeted at a sportsbetting audience. Bingo audiences like soft colours, large graphics and a general community

feel while sportsbetting audiences are interested in the odds offered by different bookies. In addition to the relevant content and presentation, a clear call to action is also a vital component to your copy for a successful conversion. Cross marketing of different, yet relevant promotions can also be a valuable inclusion to an email campaign as it may generate additional interest. The best practice, however, is to begin by knowing what your readers are looking for, and sending them offers that would be of interest to them.

Limited graphics, clean look The content in an email campaign needs to be clean, clear, easily skimmed and not cluttered with graphics. Text links are always more effective at generating clicks than banners on web pages, and the same holds true in email marketing. Simple, effective text that describes precisely what readers are going to get if they click on the link is the key to generating clicks. Make headers bold, with a few lines of text beneath them. Avoid using graphics, unless they are germane to the subject you are writing about, or are small and don’t

take up too much of the real estate that you want to be dedicated to ‘eyes on text’.

Exclusive offers Special or exclusive promotions give readers reason to keep subscribed to your email campaigns. Whether it is a cash incentive discount or a chance to receive merchandise, exclusive promotions not offered elsewhere help improve the conversion rate of email campaigns. Exclusive promotions can also be aimed at existing customers or acquiring new ones depending on the size and activeness of the database.

Sense of urgency Limited time offers create a sense of urgency. Known as ‘urgency marketing’, it is a strategy that is a staple in the marketing world. It is a way of selling to people without having to ‘sell’ them something. Marketing expert, Jim Rohn, once said that, “Without a sense of urgency, desire loses its value.” You’ve gone through all of the trouble of creating relevant copy within a nicely designed mailer; now it’s time to ensure that your readers act. Provide your readers with offers that are of a limited supply or time, or that have added benefits

that compel the reader to act based on their needs. If you know who your readers are and what they’re looking for, you’ll be able to appeal to them much more effectively.

Calls-to-action As online marketers, we all know the importance of a call-to-action. In email marketing, a call-to-action is vital and should be strong and clearly marked so your readers can take advantage of the offers presented to them. Your call-to-action must give your readers a reason to act. ‘Click here’ tells someone to click, but it’s unlikely that they actually will until they know why they should. ‘Click here to claim your bonus’ or ‘Sign up now to qualify for your prize’ are more clear and informative calls-to-action. Tell your readers why they should take action and highlight the benefit they are likely to receive. Lastly, always ensure that your calls-to-action are clearly visible and located in strategic places that your readers will find.

Personalisation Personalising your email message is a good way to make a meaningful impact. Addressing your email to your recipient’s first name or adding their name in the

subject line acknowledges their identity and lets them know you’re reaching out to them. Similarly, learning the interests of your recipients and personalising your campaigns accordingly (so you are only sending targeted promotions or news items) will keep your readers happy and wanting more. It is also good practice to ask your readers for feedback on previous promotions they have received so you have a good understanding of their experience.

Conclusion The key to email marketing is to keep testing to find out what works. A segmented database of different types of readers allows you to target your communications very carefully. Follow these few, simple rules and you will be certain to increase the effectiveness of your email campaigns.

ERICA ANDERSON is the Affiliate Marketing Team Leader at Income Access. She is responsible for overseeing affiliate program growth for multiple clients, prospecting affiliates, negotiating deals and managing the portfolio of online marketing tools.

iGB Affiliate OCTOBER/NOVEMBER 2010

webmaster world

Branding Tips for Affiliates In the iGaming business, being recognised and remembered is key to player acquisition, retention and an increase in your bottom line. That can be a tall order in such a competitive industry. With so many affiliates vying to promote similar gaming products, the question remains: how does an affiliate stand out? Your brand identity is what distinguishes you from your fellow affiliate marketers. Itâ&#x20AC;&#x2122;s your unique selling point, what makes you stand out and, if done correctly, prompts players to keep coming back to your site time and time again. One of the more recent examples of successful branding outside the industry is Old Spice. The new front man for the

iGB Affiliate october/november 2010

recent ad campaigns is Isaiah Mustafa, whose viral sensation has revived what only recently may have been considered an old, dying brand. It was our fatherâ&#x20AC;&#x2122;s cologne. Tired. Forgotten. Boring. Isaiah is anything but tired, forgotten and boring. Heâ&#x20AC;&#x2122;s fresh, funny, handsome and makes a connection both with his target audience and target influencers.

Old Spice took its sensation a step further and created what many consider to be a marketing genius; they launched a social media campaign that created immediacy and personalisation seldom seen in advertising. Old Spice reached out with personalised videos, carefully crafting realtime responses to YouTube comments, tweets and blog posts from influencers

such as Alyssa Milano, Ellen Degeneres and Demi Moore. Results? According to Symphony IRI, as of June, Old Spice body wash sales were up over 100 percent and there was a 4.8 percent jump in share points. The videos have received millions of views, and Old Spice now has over 106,000 Twitter followers, close to 800,000 Facebook fans and a 300 percent increase in website traffic. And water cooler chat is completely off the charts. The more competitive your industry, the more important good branding becomes, and this is certainly true for affiliates in the iGaming sector. Don’t wait until your brand is tired, forgotten and boring to make good branding a priority—get started with these six tips.

3. Language and tone

1. Distinguish yourself

4. Co-branding

As an iGaming affiliate, you are an entrepreneur, and so in many ways you are your own brand. As your own brand, it’s so important to distinguish yourself from the other masses of affiliates, especially those who are promoting within the same vertical. What value do you provide to your audience and potential users of your site? How are you different or special? How can you ensure that your site is worth coming back to again and again? Internet Marketing guru, Rae Hoffman (aka Sugarrae) calls this your point of difference and states, “By creating a point of difference, you’re creating a brand, and branding is often what separates the men from the boys (so to speak).” If you’re just getting started, this is one of the most important aspects of branding to nail. If you’re a veteran affiliate, make sure your point of difference comes shining through in your website and promotions.

If you are able to negotiate a branding strategy with your affiliate programs, this can definitely work to your advantage. Affiliates who have achieved a solid track record with their player database may be able to reach out to their affiliate manager to negotiate an exclusive deal. If you’re partnered with leading iGaming operators, having their presence on your marketing creative can increase trust, player confidence and help drive traffic to your website. This strategy will help you build awareness of your own brand, and can be especially effective if you are just starting out or your online branding remains relatively unknown.

2. Design The look, feel and navigability of your website are critical to your success, and if you’re a thriving affiliate this is no doubt something you have spent a considerable amount of time developing. In terms of branding and design, one of the most important elements to keep in mind is consistency. That means when you look at your website, business cards, email marketing campaigns and banner ads, for example, they should use the same colours, font and logo. A good test is to look at your various promotional items individually, and see if you can identify your branding across the board. It’s also worthwhile hiring a professional to help you with this, especially if graphics and design are not your strong suit.

The language you use says a lot about your branding. Are you very technical or do you promote more of a fun, playful tone? Not only does this say mountains about who you are, but it also attracts a specific kind of visitor to your site. Your language will have a lot to do with your target audience, in terms of attracting newbie players, expert players, casual players and so on. Like your design, your language needs to be consistent. You don’t want a very technical website combined with a light-hearted email campaign; this creates confusion. Similarly, if you send out newsletters, your subject line should remain identifiably yours, so your players recognise your communications, thereby increasing your open rate.

5. Targeted promotion It’s hard to build your reputation and branding when you aren’t letting people know who you are and what you do. There are so many ways of doing this today that vary in price and scope, and will help ensure you are maximising your reach, and ultimately, your bottom line. One of the most important things to keep in mind is your target audience. You may be able to find an incredible price on an online ad, but if the website is targeting an irrelevant market, you might as well not invest. This is often the case when you are getting traffic to your website, but aren’t able to covert. This rings true no matter where you are promoting, whether it be social media sites like Facebook and Twitter or a sponsorship opportunity. So position yourself and your brand in strategic places, where your target audience can identify with you.

6. Conferences, mascots and merchandise In line with the above point, participating at iGaming conferences and events can be an effective way of promoting your

brand because you really are at the right place, with the right people. Conference swag is also ideal for branding, especially if you can find something cost effective and attractive. Mascots can be especially effective in creating further interaction with your customers, can help you distinguish yourself in a saturated market and can add personality to your brand. Mascots give your business a face, a personality and can be especially effective in the iGaming industry. Operators like Bucky Bingo, Dream Bingo and Butlers Bingo have used mascots across their marketing campaigns to build their brand presence successfully. Foxy Bingo uses its Foxy character across the board—it even has Foxy Radio, Foxy on Facebook, Foxy Awards, Foxy TV and more. Chances are when you see the fox, you think Foxy Bingo, and that, of course, is the end goal.

“No branding strategy can stand alone, no matter how clever, without a strong business backing it.” Affiliates may not always be in the position to have a mascot, and may want to opt for merchandise instead. Let your creativity be your inspiration when it comes to merchandise, with items like branded playing cards to give at poker associations, branded bingo cards and pens and dabbers to distribute at bingo halls. There are many ways for affiliates to build their brand presence, with the aim of increasing their recognition and trust in the industry. One of the main things to keep in mind, however, is that no branding strategy can stand alone, no matter how clever, without a strong business backing it. If your brand is a promise of value, then delivery on that promise is an absolute must. Relying solely on brand name for loyalty is wrought with risk unless you are backing this with the full marketing mix: product, price, place, promotion and excellent customer service.

Nicky Senyard is CEO of Income Access, overseeing their independent iGaming affiliate network, market-leading affiliate software and expert affiliate management services.

iGB Affiliate october/november 2010

webmaster world

operator insight

“In the past, many gaming organisations relied on their SEO rankings to capture brand clicks, since there was no serious competition from PPC ads on their brand terms. Companies I’ve spoken to in this situation are admitting they are now going to have to start using PPC to bid on their brand terms.”

Google has finally done it. It has changed its European trademark bidding rules to bring them in line with its US policy. The new change means advertisers can now include trademarked words and phrases in their Google ads without the owner’s permission. This follows on from Google’s decision in 2008, which allowed advertisers to bid on trademarked terms, without being able to include that term in their ad. Many discussions around this move have focused on the (now famous) Louis Vuitton trademark case from earlier this year, where the European Court of Justice ruled in favour of Google. However, what I want to look at is how this move might impact you as a gaming advertiser, and what tactics you should employ to deal with this change.

Impact My first reaction was that, in the competitive gaming industry, for example, this could cause a swathe of problems. Many bookmakers execute a large amount of above-the-line marketing activity, particularly around major sporting events. Previously, this generated vast revenues as online sales were captured through their brand terms in Pay Per Click (PPC). Now these same brand terms will have non-trademark owners bidding on them using the trademark in their adverts. Consequently, you may surmise that big brand gaming advertisers will have to share the clicks from these searches with their affiliates, as the latter starts using the trademark in their ad copy and increases their Click Through Rates (CTRs) on these terms. This could increase your Cost Per

iGB Affiliate october/november 2010

Funded Account (CPFA) as you end up paying your affiliates for the cost of their clicks as well as their affiliate commission. Undoubtedly, this path is a possibility and it would be a major blow for large gaming brands that relied on their brand terms for high volumes of traffic and new accounts. An additional aspect is that, in the past, many gaming organisations relied on their SEO rankings to capture brand clicks, since there was no serious competition from PPC ads on their brand terms. Companies I’ve spoken to in this situation are admitting they are now going to have to start using PPC to bid on their brand terms. They are expecting to see organic clicks decrease as a result of affiliates using the trademarks in their PPC ads and taking away clicks from them. Again, this is going to result in an increase in CPFAs. All in all, the impact is potentially damaging if you don’t consider how you’re going to combat it. As Chris Harrison, from one of our clients, Betfair puts it: “Paid search is a large part of our online strategy and with the above-the-line campaigns we run, a lot of our PPC clicks come through brand terms. This move could reduce our CTRs on these terms and impact the volume of new accounts we get opened through PPC. So, we are working on combating this move using affiliate marketing and updates to our ad creative to maintain our current CTR on brand terms.”

Counteraction Many gaming brands have been policing their trademarks very closely ever since Google’s original trademark changes, due

to the competitive nature of the space. The use of trustworthy affiliates to claim your trademark space has proved one of the most effective ways of policing it. This way, you can be sure that all searches for your brand terms are finishing with an account getting opened with you, as opposed to one of your competitors. To do this effectively you need to ensure you are communicating your stance on trademark bidding clearly and effectively to your affiliates. If Google isn’t policing your brand terms then you need to self-regulate. It’s best to communicate your stance with affiliates through your affiliate terms and conditions. Make sure you let them know what is acceptable when it comes to brand term bidding. At the same time, ensure you give them enough freedom to bid on brand terms to keep your competitors from claiming space on them. When affiliates aren’t sticking to your terms and conditions, simply cut their affiliate commissions. Another technique we’ve seen used for combating ‘trademarking’ issues in the gaming industry is the reduction of affiliate commissions for sales that come through brand terms in PPC. This way, it dissuades affiliates from bidding highly on your brand terms as it makes them less profitable, leaving you to mop-up all brand clicks from your above-the-line activity. However, this is a risky strategy as it opens up space for your competitors to bid on your brand terms. As the owner of a gaming trademark, have a look around your terms now and identify who is appearing on them; have they got content about your trademarked phrase or product? If so, they will be able to include the phrase in their ad text. So define your tactics based on this analysis. Finally, it is now more important than ever to make sure you’re ad copy stands out in the creative you use for brand keywords. Think about using terms like ‘official site’ in your ad creative to make your site stands out as the one relevant to the trademark potential customers are searching for. Follow these steps and I believe the gaming industry will comfortably be able to adapt to Google’s most recent trademark changes.

webmaster world

One of the biggest breakthroughs that social media has achieved is the ‘humanising’ of companies. It has brought executives down from their ivory towers to the shop floor, making them available to interact with customers irrespective of their geographic location. Twitter, the micro blogging platform has spearheaded this trend, allowing prospects and clients to share their views about products and services in real-time through short messages of 140 characters.

Practicing the art of generosity In most cases, users follow many more Twitter members than there are following them. This is one of the reasons why it’s important to be generous in following others in a particular niche. Using the right keywords, it is easy to find a list of users that are more likely to build a relationship by following you back and reading your tweets instead of ignoring them. Twitter users want to learn about the person who is ‘tweeting’ before they even think about the business behind the person. What this implies is that a manager or employee tweeting on behalf of the business should use a personal voice and be frank about what’s happening in the business. Readers quickly pick up on false bravado. For instance, a manager of a business can share his views about the latest industry trends and how the business is likely to be affected, but also an important travel tip that helped him save time while catching a flight to attend a conference. The only time you may receive a direct message from a Twitter user may be when you begin to follow them. Generally, this is a message to thank you for following them. Sometimes, however, a user will pick up the courage to send you a Direct Message that could be a query or a request to take the business relationship further. It’s not just courtesy, but also good business sense to respond to the direct message. A

response from a brand manager whom a customer would otherwise never interact with contributes to the goodwill that surrounds the brand. This will create an even greater affinity about a brand that a customer strongly favours.

Creating interest through consistency and innovation Just like any other marketing effort it is important to spend time to regularly update your tweets. It is far better for an employee in a business to spend time updating tweets and building relationships than an unresponsive manager, who will come across as cold and uncaring. It is also acceptable to spark some interactivity by using innovative ideas that do not necessarily have a business like tone. For instance a confectionery company can have a “Name your favourite chocolate day”. Ask followers for their opinion on one of your products. Respond to their feedback, indicating that you value their comments and also tell them if you implement their recommendations. This will make them feel that your company takes their business seriously and will strengthen your relationships. Some of the users will even retweet, meaning forward your tweet to their twitter friends. The advantage here is that you will not only get more feedback, but also gain followers and greater exposure for your business. Another great way to add value to your tweets and be tweet-worthy is to tweet details about conferences that you attend. If you have a Smartphone, you can tweet snippets of information as they happen to your followers, so they can learn from what is going on.

Adding personality to blogs Twitter is also an excellent tool that can bring the personality of the publisher to a blog. Since Twitter can never be used to tell the whole story, followers can be given a sneak peak at what is going on in the business, provide quick updates on company plans and post a link back to the blog. Further, as a company blog begins to grow it is highly unlikely that you will

be able to respond to all of the comments that you receive on the blog. Also, visitors to your website may be attracted to the products that you sell, not the articles that you post. Twitter gives you the opportunity to get closer to your target market using short messages that are simple to read and don’t take up too much time.

Drawing strength from numbers As you begin to use Twitter and gain more followers, you will reach a stage when you have several thousand followers. This is where the game gets to another level. This is when you will gain greater brand equity, not just through sheer numbers, but also through your value added tweets. After all, if someone with say ten thousand followers sends out a tweet, he or she must know what they’re talking about. In the offline world it’s hard to get an authority figure to talk about your products and services. However, if your tweet is picked up by someone who has ten thousand followers and retweeted, can you imagine the impact this can have on your brand? All said and done, every tweet about your products, service or brand should be seen as an opportunity to build relationships with people in real-time. The objective is to relate to their experiences and try to make them better in a way that delivers an ideal experience with the brand. Of course, using Twitter strategically is not for the uninterested or disempowered. In times when expectations run low, Twitter presents an option to engage in a manner that proves the brand is listening and ready to help. An authority on using social media for business, Logan Nathan has used the very strategies that you will be taught to build an impressive list of followers on a number of social media sites such as Twitter, LinkedIn and Facebook, most of which are targeted leads for his businesses. With over 28 years of Information, Communication and Technology experience, Logan has been running his own company, trading as ICT Internet Presence (ICTIP) in Sydney since January 2004.

iGB Affiliate october/november 2010

webmaster world

Give 15 Minutes of Player Fame to Make your Brand Famous Remember that marketing basic, the ‘USP’, the ‘Unique Selling Proposition’? I wasn’t long in the game until I changed it to ‘USSP: the Unique Selfish Selling Proposition’. In other words, a USP alone wouldn’t cut it (especially in B2B), you also had to answer the question ‘what’s in it for me?’ This was pre-Internet for most, late eighties. Put the buyer at the center of your proposition. Now, of course, it’s all about me, me, me: “Follow ME on Twitter, look at ME here on Facebook”. YOU are the center of your universe, the hub of your network… as it should be. After all, who’s more important in your world than you? The question then is: why is this not reflected in the iGaming industry? It is best executed perhaps in the genrebending PKR: you can decorate your avatar, unlock moves as you play the meta-game of PKR over your Texas Hold’em. And traditional poker has the ultimate chestbeating of getting in and playing the WSOP (never mind winning—you don’t expect to win). And in the massively socialized world online bingo (just try playing without chatting; it’s easily 80 percent of the experience), you can momentarily be the centre of the universe when you get to shout ‘BINGO’! But in the billions of dollars spinning through the slot machines, or the billions passing through the sportsbooks, aren’t we missing something? The opportunity to make the player King (or Queen) for a day, a moment. For the spotlight to shine and the victor to shout “I’m king of the world!” Because done right, that is how you feel when you call the play right, or split your aces, double down and rule the table. Or even make the right choices on the feature play. Is simply winning enough?

iGB Affiliate october/november 2010

Once we would have said unequivocally ‘yes’. Especially if they’re ‘American’ and their play is more closeted, clandestine, for social or legal reasons. Some say casino players in general prefer privacy – these guys weren’t standing around the craps table in Vegas last night. So how do you build social recognition into traditional iGaming products? You can (PKR has), but then the mountain has to go to Mohammad. Rather, I think the strategy is to bring components of the game, or even a new meta-game, to the existing social networks for your players. So they can tweet about their status and have others on Facebook ‘Like’ their accomplishments of achievements they make outside of the network (e.g., not on a Zynga game). It’s a challenging space – not all of your players will want to participate, so enthusiastic marketers and social networkers need to proceed with caution. But there is another upside; the social or meta-game components of your enhanced iGaming product can also work on mobiles. Suddenly, new worlds truly open. With already ubiquitous Smartphones overtaking PCs as the interface of choice, following this strategy of enhancing traditional iGaming with a social network meta-game component that makes the player the hero gives your brand relevance in both social and mobile space. And if your game (or the meta-game) is Smartphonefriendly, you can have players around the world connecting on their platform of choice and playing and sharing your game with their networked friends. Viral marketing? Viral selling! But the fundamental ‘selfish’ question remains: what’s in it for me? Why am I motivated to share this information? One simple answer is sharing is one of the

keys to progressing to a higher state of recognition; the more you ‘share’ your results/status, the greater your status becomes. To temper that so the mostconnected don’t always win (and contrary to the metaspace reality), players need to engage in components of the game as well. In other words, sure you get your miles for flying, but you get more miles for flying in business class. And that gets you out of the hordes at the boarding gate and into the lounge. Gaming has been integral to human existence since existence began; it addresses an essential need in human psychology – a stress and relief pattern that rewards the participant with survival itself. Likewise, humans have an instinctual craving for community, as the enormous popularity of online communities testifies. It’s also human nature to want recognition within that community – be it in metaspace or online. Why else would someone post their Farmville accomplishments? Playing off that pride in iGaming, through existing social networks, is the mechanism for giving something more to your players, and help attract more players through them. Think Ayn Rand’s Virtue of Selfishness for the interconnected world. If the USSP of your brand is that it makes your players famous for fifteen minutes in their worlds, I think you might have a pretty popular brand.

ALEX CZAJKOWSKI is CEO of eGaming 2.0. Alex is a known innovator and brand-builder in the iGaming space, twice winner of the industry’s ‘Sportsbook of the Year’ award and twice nominated for ‘Innovation of the Year’.

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webmaster world

SEO and CRO How can my website succeed on both battle lines, by EC Voica, Evosoft Media. During our session at the 2010 Budapest Affiliate Conference (BAC), we briefly dealt with the common pitfalls in SEO and CRO, which occur in the online gaming business. I will now provide a deeper dive into the topic, outlining some of the latest insights that, if well applied, can boost your revenues significantly. Most often, you’ll have to fight two battles to win a war. While SEO can boost your website visibility and create the premise of success, CRO ensures that there is no loss/minimal loss in terms of missed opportunities by increasing the conversion of your website closer to the maximum attainable level. In the past years at Evosoft Media, we have analyzed, optimized and provided advice for numerous websites. At BAC, we discussed the top SEO and CRO pitfalls based on real life examples. We forged scenarios which should help any business owner in gaining as much leverage and competitive advantage as possible; in an online sector where the only constant is the change itself. Analyzing pitfalls in a proactive manner does not necessarily lead to success, but it substantially decreases the risk of failure. Indeed, an integrative approach/mix is needed to succeed (and you need to combine product, price and visibility in an intelligent manner), but a good plan, powered by interest, motivation and knowledge guarantees that you will get the best out of the existing resources. The premises for a winning strategy:

Starting today is far better than starting tomorrow The perfect time to start building your empire was five years ago . 2004-2005 was a golden period for online projects. Most market players with dominant positions then consolidated and transformed into market-makers in multiple niches. Fortunately in the online world, you can always buy time even if the cost of lost opportunities might be high. You can try to compensate and leverage your competitive advantages (using premium domains, lower prices, and better products) but in general, these strategies are far more expensive because they involve stretching the normal growth cycle of your business.

names. Even if the PPC landing page model was beaten down , the prices for the good domains are stable, which turns them into a great investment alternative. Besides the obvious Search Engine Related advantages, and the higher probability of obtaining site links (enhanced listing), exact match domain names separate the market leader and the crowd, and they are generally a strong trust signal, with great advantages in ‘brandability’.

Search engine rankings place heavy emphasis on branding Starting with a small sub-niche and building your way up is no longer a great practice , as Matt Cutts used to advice. LDA (see reference 5 for details) creates an advantage for content rich websites which aim at multiple lexical forms of interlinked words and expressions, while generic domains can make it hard to compete at entry level with the brand and authority acquired by a more established competitor operating on a premium domain name.

Be relevant, avoid spam Google may be assigning relevance to keyword terms based on context (LDA system) – topical relevance. This means that the role of keyword density is far lower than expected. Using interlinked lexical forms/synonyms/similar expressions can lead indirectly to a higher ROI.

Do not forget endless possibilities of the Internet – why not build networks? Aggregate strategies – micro-sites can be used for hedging or consolidating your position/network. Abuse is often penalized.

Links are hard to get but great to find They are not born equal, nor do they live as equals. Anchor text, Domain Popularity, Topical Relevance, Diversity and Trustworthiness are just some of the signals used to appraise the value of GBLs/YBLs.

Create attractive landing pages The right design can improve your conversion rate, and become link-sexy. QDF (Query Deserves Freshness) can broaden your long-tail reach .

Invest in a good domain name In the context of the Google Caffeine infrastructure , we are witnessing even more emphasis put on exact match domain

Your site architecture is crucial Website video tracking programs can provide valuable insights on the path and

behavior of your visitors, which can serve as valuable raw data for optimizing your business model or site architecture.

Pay attention to your actions, especially externalized work Statistics don’t lie, but they can be misinterpreted. You can’t hatch chickens from fried eggs. Wrong conversion channels and visitors directed inappropriately through action funnels can lead to disaster.

Patience A successful project takes time and effort. Focus on your to-dos, and on the way to get there. Change your plan according to the market realities. Plan on substantially different scenarios regarding≈ROI, expenses, time to get there and profit.

Social Networks can help you However, they will not replace the importance of a well optimized website. Social Media and Organic SEO are often fundamentally different systems.

Do not forget who your primary customer is and what their needs are Visit your page as a user, and check loading time, browser compatibility, and the behavior of flash embeds/needed updates to run them.

Proper link architecture is a common standard in today’s SEO Links in content on connected keywords with targeted anchor text and deep roots are always preferable. Even if some of the premises might belong to the basics of SEO, it is very difficult to find a site which would follow them all. Furthermore, SEO does not bring money without conversions. My last advice is, therefore, this: do not be afraid to question your website and your strategies, and do not hesitate to ask for a second unbiased opinion. At the end of the day, there is nobody more qualified and market aware than yourself. Questioning the decisions and the initiatives taken by your online marketing agency will only lead to higher quality of services and to other fundamental changes which will ultimately refine and consolidate a viable online business.

iGB Affiliate october/november 2010

marketplace

Welcome to the MarketPlace listings section in iGB Affiliate Magazine. All Listings below are from our iGB Affiliate Directory 2010 which is a 200 page directory of affiliate programs and services companies specifically for affiliates from translation toÂ SEOÂ services. To request a free copy of this publication or to have your company listed please contact Richard W on Richard@iGamingBusiness.com or +44 (0) 207 954 3437

advertising and marketing

888.com

PartnerLogic

Netgaming Services

www.888.com

www.partnerlogic.com

AffiliateClub

PartyGaming

www.AffiliateClub.com

www.partygaming.com

BetOnMarkets (Regent mkts)

Affiliates United

Refer Income

Affiliates.BetOnMarkets.com

www.affutd.com

www.referincome.com

Income Access

Bet365

Slots N Games

www.incomeaccess.com

www.bet365.com

www.slotsngames.co.uk

NEO Games

Betfair

Tipico

www.neogamespartners.com

www.betfair.com

www.tipico.com

ChanceAffiliates

Tower Gaming

www.chanceaffiliates.com

www.towergaming.com

Circus Casino

Virgin Games

www.circuscasino.com

www.virgingames.com/affiliates

EGO

Winner Affiliates

www.EGamingOnline.com

www.winneraffiliates.com

www.netgameservices.com

Alternative Gaming

Bingo Affiliate Programs Affiliates United www.affutd.com Bet365 www.bet365.com EuroPartners www.europartners.com GamblingB2B www.gamblingB2B.com Income Access www.incomeaccess.com Ladbrokes www.ladbrokesaffiliates.com Maria Partners www.mariapartners.com Market-Ace www.market-ace.com Paddy Power www.paddypowerbingo.com PAF www.paf.com StarGames www.stargames.com Virgingames www.virgingames.com/affiliates Virtue Affiliates www.virtueaffiliates.com

Casino Affiliate Programs

EUCasino www.EUcasino.com EuroPartners www.EuroPartmers.com Fortune Affiliates www.fortuneaffiliates.eu GaminGang www.gamingang.com Genting www.gentingcasino.com Income Access www.incomeaccess.com Intertops Casino

All in Translations

www.intertops.com

www.allintranslations.com

Kerching Casino

Burstin Group

www.kerchingaffiliates.com

www.burstingroup.com

Ladbrokes

NetGames Services

www.ladbrokesaffiliates.com

www.netgameservices.com

NetGames Services www.netgameservices.com

Email Marketing

PaddyPower Casino www.paddypowercasino.com PAF www.paf.com

iGB Affiliate OCtober/november 2010

Content & Translation services

Altex Marketing www.altex.ee Cheeze DMG www.cheezedmg.com

Clash-Media

Chance Affiliates

Paddy Power

http://www.clash-media.com

www.chanceaffiliates.com

www.paddypower.com

Communicator Corp

Circus Poker

www.communicatorcorp.com

www.circuspoker.co.uk

Epsilon International

EGO

http://www.epsilon.com/uk

www.EGamingOnline.com

Silverpop

Eurobet

www.silverpop.com

http://affiliates.eurobet.com

forex affiliate programs BetOnMarkets www.affiliates.betonmarkets.com Forex Yard www.forexyard.com

EuroPartners www.EuroPartmers.com Gutshot.com www.gutshot.com Intertops www.intertops.com

Hosting & Managed services CSB www.csbgroup.com Income Access www.incomeaccess.com NetGames Services www.netgameservices.com

Ladbrokes Poker www.ladbrokesaffiliates.com Paddy Power Poker www.paddypowerpoker.com PartnerLogic www.partnerlogic.com PKR.com

payment solutions Counting House www.countinghouseltd.com EntroPay www.entropay.com

www.pkr.com Virgin Games www.virgingames.com/affiliates Winner Affiliates www.winneraffiliates.com

Intercash www.intercash.com MoneyBookers www.moneybookers.com

poker affiliate programs 888.com www.888.com

search marketing

Affiliates United www.affutd.com Bet365 www.bet365.com Betfair www.betfair.com Cake Poker Affiliates www.cakepokeraffiliates.com CelebPoker www.celebpokeraffiliates.com

888.com www.888.com Affiliates United www.affutd.com Bet365 www.bet365.com Betfair www.betfair.com BetUS www.betUS.com ChanceAffiliates www.chanceaffiliates.com Eurobet www.eurobet.com Expekt www.expekt.com ExtraBet www.extrabet.com Income Access www.incomeaccess.com Intertops www.intertops.com Jetbull www.jetbull.com

Burstin Group

Ladbrokes

www.burstingroup.com

www.ladbrokesaffiliates.com

Vanguard SEO

Offside Bet

www.vanguardseo.com

www.affiliates.offsidebet.com

Income Access

Paddy Power

www.incomeaccess.com

www.paddypower.com

Affiliate Club www.AffiliateClub.com

sports betting

skill gaming 888.com www.888.com Affiliates United www.affutd.com EGO www.EGamingOnline.com Euro Partners www.EuroPartmers.com

RedBet www.redbet.com Sportingbet www.sportingbet.com Tipico www.tipico.com Victor Chandler www.victorchandler.com

webdesign

Income Access

NetGames Services

www.incomeaccess.com

www.netgameservices.com

iGB Affiliate october/november 2010

webmaster world

Preparing for the Deluge Graham Moore, e-gaming and gambling specialist at Zeus Technology, discusses the implications of the US regulating online gambling and outlines why affiliates must have web traffic management at the front of their minds. Legislation banning online gambling payments in the US has now been in place for four years and was a huge blow to the online gambling industry when introduced in 2006. Overnight, gambling companies and affiliates alike lost a huge market, creating challenges that still exist today. It is, therefore, unsurprising that the news of the potential lifting of the ban, following the campaigning efforts of Barney Frank, Democratic chairman of the US House of Representatives financial services committee, and by those at the state level, has been extremely well received by those in the industry.

New market opportunities According to analysts, the value of the online gambling market could rise to anywhere between $12 and $16 billion if the market opens up. This might sound high but analysts are confident consumer appetite for gambling online remains strong in the US, despite the ban. It’s likely to be true, especially given that thousands in the US have been happily using offshore websites while the ban has been in place. For affiliates, a repeal of the ban is hugely exciting as it presents them with an opportunity to boost profits as gambling companies look to expand their affiliate programs. Despite this, an opening up of the

“Without an effective web traffic management strategy, affiliates will struggle to meet user demand and risk missing out on the huge opportunity that the opening up of the US market presents.” 66

iGB Affiliate october/november 2010

market isn’t without its challenges for gambling companies and affiliates alike. It’s likely, for instance, that new gambling companies will enter the sector in a bid to secure a slice of the US market. At the same time, existing players will become more aggressive in seeking out gamblers as they look to hold on to existing customers while at the same time attract new ones. What’s more, because consumers will have more choice in terms of where they can go to part with their cash, they will become more demanding and less loyal.

Play your cards right with customer service Customer service and differentiation will, therefore, be the name-of-the-game in the online gambling world. Customer service isn’t just about the services offered online but about issues such as the speed at which web pages load, how quickly payment details are taken and how well a site copes during busy periods. For these reasons alone, expect to see the issue of web traffic management rise quickly to top of the agenda for both affiliates and online gambling brands. Without an effective web traffic management strategy and the necessary technology in place, brands will struggle to meet user demand, fail to deliver consistently high levels of customer service and, ultimately, risk missing out on the huge opportunity that the opening up of the US market presents.

It’s good to talk All too often, the issue of web traffic management isn’t something that’s discussed between an affiliate and brand. It only comes to light after a big push or boost to an affiliate program leads to a spike in web traffic, which then means a site is unable to handle the above average levels of traffic. To prevent this from happening, it’s essential that affiliates raise the issue

of web traffic management with online gambling companies. Affiliates are paid for the traffic they drive so it’s only right for them to express an interest in ensuring sites can cope with increased levels of traffic. Affiliates too should ensure they prioritise the issue of web traffic management to make sure their own sites are able to handle various peaks in online footfall.

The need for intelligent technologies In terms of the actual technology needed to ensure web traffic is managed effectively, affiliates and gambling companies need to invest in intelligent solutions. Intelligent web traffic management technology allows for the individual monitoring of users to improve their online experience. It also means ‘high rollers’ can be tracked and, if needed, prioritised when sites are busy so that those likely to spend more are able to access services quickly and kept happy. Although this technology sounds expensive, there are cost-effective software solutions available that provide some much needed and effective flexibility.

Time to act now While a decision has yet to be made about repealing the legislation in America, signs have recently become more positive, so it’s worth thinking now about what this means in terms of delivering excellent online service. This means discussing the issue of web traffic management, assessing how sites would cope with a huge rise in traffic and investigating intelligent and cost-effective web traffic management solutions. The American market presents the entire online gambling industry with a huge opportunity to expand. Missing out on this opportunity by failing to prepare for an increase in traffic is one mistake no affiliate can afford to make.