With so much fuss about social gaming within the online gambling industry, you would think that there lies a massive opportunity for traditional iGaming affiliates to branch out. A fresh, innovative market, no regulatory restrictions or saturation, millions of players around the world…the question is though, do social gaming companies even need affiliates and if they do, is it worth it for the affiliate?
There are social gaming affiliate programs available, such a Playtika Playground which claims that it’s the largest one in the world. Personally, I’ve not heard of any other affiliate programs dedicated to social gaming and Playground is the only social gaming affiliate program GPWA sponsor, so I’ll let you deduce from there.
Commission rates at Playground are advertised at an 80% rev share for the first month, down to 60% for the second and 40% for the third, while the rev shares offered in the online gambling industry average at about 35%. Playground’s CPA amount is relative to the amount of new depositing players the affiliate brings in each month, ranging from $10 to $25 per player in comparison to the $200 CPA that is average in the online gambling industry. Some programs require a minimum deposit requirement before forking out the agreed CPA, so it would be interesting to know Playground’s full policy.
While I’m not sure of Playground’s commission structure fine print, what I do know is that it will take quite a large amount of traffic to achieve the levels of revenue an affiliate can achieve with online gambling affiliate programs. And now for the even bigger question. Do social gaming companies actually need affiliates?
If you ask Raf Keustermans, the answer is not really.
Keustermans is a social games expert, the CEO of social gaming start up Plumbee, and has an understanding of online gambling affiliate marketing from his days at Unibet and beyond. When it comes to social gaming marketing, Keustermans believes affiliate marketing is a very small piece of the ecosystem and that its not going to grow anytime soon.
Clearly one of the biggest challenges is volume- affiliates are going to need to be sending a massive amount of traffic to make any real money. “The traditional gambling affiliate model with rev share is hard to implement at scale in social gaming, as such a small percent of the users actually ends up spending and the overall average spend and LTV is so much lower, so an affiliate need to send tens of thousands (or more) players to a game to make any meaningful income from it”, Keustermans explained.
Keustermann added that traditional gambling affiliates are used to a smaller base of users, but with a much higher value per user ($200+ each) than a social gaming user ($2-$10 each). “Affiliates are not well equipped to switch from low volume/high value to the high volume/low value”, he said.
Another issue is a that social gaming companies often have their own in-house teams that are able to better accomplish what an affiliate could accomplish for them.
Online gambling affiliates add value to the operators that they work with, hence they are an important piece of just about every operator’s marketing plan. However, the same does not appear to be true for social gaming operators.
Keustermans explained, “While in iGaming affiliates have found an ‘edge’ where they can add value above and beyond what the in-house marketing teams from operators can bring (e.g. through clever SEO, setting up educational programmes for poker players etc) they struggle to find the same in social gaming: SEO doesn’t work for Facebook or mobile apps, and the in-house teams have access to pretty much exactly the same tools and traffic sources as the affiliates – there is no real edge”.
So how do social gaming companies get their traffic, you may be thinking. In a word, the answer is Facebook.
“For Facebook apps I would say 90%+ of traffic comes from Facebook: in most cases a combination of paid advertising through different ad formats on Facebook and viral + organic installs using e.g. OpenGraph, in-game gifting, invites, …”, said Keustermans. He continued, “For mobile Facebook is becoming a big player as well with their app install ads, but there are a gazillion other ad networks, ranging from incentived install networks (e.g. Tapjoy) to game-specific networks like Chartboost to more generic ad networks like adMob, Inmobi, Millenial etc”.
Who knows, maybe in the future there will be more opportunities for affiliates through mobile. However, in the meantime, sounds to me like iGaming affiliates should stick to iGaming for now, yet another reason why there is not as much cross over between the social gaming and online gambling industries as we originally thought.
