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GAMINGmalta 2O17 EDITION
Erik Bergman, Chief Strategy Officer & Co-Founder of Catena Media
Affiliate Duo Optimised for Success Consolidation in the affiliate sector was one of the big themes in 2016, allowing for larger volumes of traffic being negotiated with single partners. Catena Media is the obvious example, going through an IPO that raised €25 million followed by several prominent acquisitions.
Catena media is one of the most visible companies these days. Could you outline the roots of the company? Catena Media started more or less by accident. The founders are Emil Thidell and myself. We were born on the same day in the same hospital in Sweden. Our first step into iGaming was creating rate-back affiliation for poker sites. In 2007 we went into bingo and focused all energy into understanding how to advertise through Google. In 2009, we managed to strike a deal with a friend of a friend who had a platform, and we launched our own bingo brand. We then decided to move to Malta and apply for jobs but no one wanted to hire us. So we started comparison sites of all kinds: mortgages, fashion and hotels. This was the first chapter of Catena Media, and it was all about SEO. We hired our first employee in 2011. Through my girlfriend, we met the people who founded Optimizer Invest and moved to Marbella and Gibraltar in 2012 together with them. At the end of the year they bought half of our company, their initial investment. At the time, we had a monthly profit of circa €50,000. Optimizer Invest pushed us out of our comfort zone and assisted us in scaling up. We hired 10 employees, started what later became Betit Group, and for the first time we had red numbers in our books. Our business was so stretched that we had to streamline and separate the business into different companies. Results improved by the end of 2013. We moved back to Malta in 2014. It was a struggle initially, but since then we have rocketed up to about 200 employees with offices in London, Belgrade and a HQ in Malta.
Can you tell us a bit about the sites you run and how they differ from each other? We have many websites. AskGamblers.com, for instance, is focused on helping players with customer complaints and player reviews of online casinos. If a player experiences issues with a casino, we allow both the casino and the player to send in their version of the story with print screens and evidence. This has resulted in millions of euros paid out to players from casinos on issues that were previously disputed and unresolved. FreeSpins. se and SlottiMania.com have more of a social approach. One is a blog, and the other is a casino chat room. Another site is PlayNJ. com. Since the United States are fragmented with different iGaming laws for every state, this site explains players in New Jersey the options and legal requirements there.
te The Affilia
As profit margins are increasingly being squeezed, how would you describe the relationship between operators and affiliates these days? It is a love-hate relationship. In the defence of affiliates, I must say it is a very weird approach thinking that online casinos should do their own marketing. In any industry, very rarely do operators execute their own marketing. Weirdly enough, in iGaming they think it makes sense to do their own advertising.
Between three payment methods: set fee, set fee & revenue share, or complete revenue share, which one do the operators usually prefer to negotiate with affiliates? It varies among operators. Primarily, online casinos and sportsbooks prefer complete revenue share due to the low risk involved. From our perspective, we prefer different fees depending on the source of traffic. We prefer a set fee due to our marketing costs for paid advertising. We need to make sure we get our marketing costs back, so we can reinvest the money. We usually charge a set fee that is lower than the revenue share would be, enabling us to scale up quickly instead of waiting the entire year. For SEO and other sources of traffic we usually have a mix of set fees and revenue share. We have different deals with every operator, but on average we split net profits fifty-fifty.
You started your business from a novice level; how did you manage to gain insight into Google search engine algorithms? By trial and error, as well as reading. Google releases 500 small updates per year, but the basics do not change. Therefore, we don’t focus too much on analysing every little change because we see ourselves working with Google and not against it. There are no shortcuts, it is better working on what Google thinks is the best. Of course, we are making sure Google sees us in the best possible light.
What is the churn rate of customers and what are the general behaviour patterns? We often see players returning for another casino. Customers prefer those casinos where they believe they will be lucky and win. They