Regulation and evolution of affiliate marketing

iGB has published its first ever Affiliate focused e-zine ahead of next week’s London Affiliate Conference.

Authored by Scott Longley and entitled Under pressure: Regulation and the evolution of affiliate marketing‘, it extensively quotes comments made by David Clifton. You can download a free copy of the e-zine here, where it is previewed as follows:

This exclusive report released for next week’s London Affiliate Conference finds a sector being reshaped by consolidation and the pendulum-swing of regulatory and legislative opinion against online gambling marketing.

Moves in some territories, such as the UK, Italy, Sweden, Spain and Belgium, place affiliates in the gambling regulatory spotlight, while other moves in relation to online advertising are similarly changing the nature of the affiliate landscape.

All this is taking place against a backdrop of slowing M&A momentum. The rise of the super-affiliate is closely tied to the regulatory embrace and has helped to create a market structure that is now more clearly defined than ever before between large and small.

The likelihood is that the current lack of deals is more of a pause and that more deals will be announced during 2019.

But at the very top of the tree Catena Media has said that its M&A strategy has evolved towards fewer, and potentially bigger, deals.

The regulation of US sports betting is one example of how new markets bring their own challenges and opportunities.

This report looks into the interplay between the online gambling regulatory backdrop and the affiliate marketing sector, and discusses how it has already adapted and how the market will evolve in the years to come.

Reflecting some of the comments made by David in the e-zine, in our view:

  • the current bout of regulatory pressure with regard to marketing presents both a threat and an opportunity for affiliates:
    • a threat in the sense that affiliates who have not woken up and smelt the coffee (and, as a consequence, very considerably upped their game in terms of regulatory compliance) will find themselves out in the cold, at least insofar as their relationships (or absence of them) with responsible gambling operators in reputable jurisdictions is concerned
    • an opportunity in the sense that affiliates who commit to education, training and a proper commitment to compliance with advertising, data protection and gambling regulatory requirements will have a sustainable future and a very major competitive advantage over their less responsible rivals
  • some affiliates (who have heeded the clear and longstanding warning signs) are well prepared for the increased regulatory pressure; others (who haven’t) aren’t. To take the UK as an example, it was known as long ago as 25 January 2018 that the Gambling Commission was intending to put in train a more robust means of addressing failings that arise from licence-holders’ arrangements with marketing affiliates. The formal confirmation of this was given on 1 August and it came into effect on 31 October last year. It is staggering that some affiliates still say “tell us what to do and we’ll do it”. Some affiliates complain that the regulatory landscape is too complex and ambiguous for them to understand, but it really could not be clearer to anyone who has taken even the smallest degree of trouble to find out
  • affiliates who are not prepared to subject themselves to the necessary degree of effective self-regulation required to satisfy ever more stringent regulatory requirements in well-regulated European jurisdictions will focus on fresher fields, including Eastern Europe and Africa. Why wouldn’t they?
  • the U.S. is rightly regarded as the land of opportunity, this time because the door to legal sports betting has been well and truly opened up to operators, suppliers and affiliates alike. However, those who forecast adoption of the New Jersey licensure model for affiliates are probably right. This will present high regulatory hurdles, particularly when revenue share arrangements are proposed.

You can also download the e-zine below.