Elaine Gardiner goes through all the intricacies of how affiliate marketers can make informed decisions based on actual data to truly get return on investment.
Picture the scene. You’re in the weekly marketing meeting. The polite chit-chat is done, and it’s time to go round the table to discuss the numbers and any new opportunities.
The CMO turns to the affiliate manager. They start with the headline numbers: total sign-ups, first-time deposits (FTDs), deposits and net gaming revenue (NGR) for last week. On the surface, everything looks fine. NGR is higher than the commission being paid, so why worry?
Next topic: new deals.
“I was chatting with Paul from Speedy Media on Telegram yesterday. They launched a new site in Canada a few months ago and traffic is growing. They’re looking for a hybrid of €150 + 50%. I think it’s worth trying. Is that okay?”
Then comes the million-dollar question: ‘What are we going to get from this deal?’
What usually follows is a discussion about the site’s traffic, the positions and pages on offer, and some vague numbers from previous campaigns. Most likely the standout ones, not the worst.
In 18 years of affiliate management, I’ve seen this scene play out over and over again. And the thing that trips every deal up isn’t the Ahrefs traffic checks, the stats requests, the IOs, the get-out clauses or any of the other checks you run to make sure a deal is legitimate. It’s what’s happening closer to home.
Can you convert that traffic, retain it and maximise player lifetime value so you get a true return on your investment?
You can lead a horse to water, but you can’t make it drink. This is the missing piece of the puzzle for most operators: truly understanding their own product and player value before spending big money to acquire players.
Yes, there’s an argument that you need to acquire customers to find out what they’re worth in the first place, and that’s true. But if you’ve been acquiring customers for more than six months, you should have enough data to stop making blind deals.
Spending good money on expensive placements to send traffic to a poor product is like buying a brand-new Ferrari when you’re a terrible driver who hits every curb. A waste of money.
Know your numbers
On a €150 + 50% deal, you need €300 in LTV (lifetime value) from each customer just to break even, and that’s before you’ve factored in any other costs. So how much LTV do you need before you’re actually profitable? Do you know?
This is where data comes in. If you’re running a casino or sportsbook, you have it, and lots of it. Use it to make smarter decisions. Get the basics right, then segment, measure and improve.
Start with this:
ARPU (average revenue per user, per month) × average player lifetime = player lifetime value
Then break it down by product, country and channel where you can. An average customer acquired through social media will be worth something very different from a high-intent SEO customer.
You can see where I’m going with this. You’re starting to build a real picture of how your customers perform and where the value sits, by channel and by country. With the average LTV of an SEO-acquired customer in Canada and the affiliate’s pricing in front of you, the decision becomes a lot easier.
Say you crunch the numbers and find that SEO-acquired customers in Canada are worth roughly €420 in LTV. You know the breakeven on €150 + 50% is €300. Saying yes to that deal with confidence is a truly data-driven decision.
Price isn’t the only lever
Once you understand how to measure traffic, you can start optimising your spend. That’s where your return on investment grows, and it leads to brand growth because you’re acquiring players more efficiently. And once you’re measuring and tracking every step of the user journey, you can tweak each part of it, not just the price at the top of the funnel.
It’s a balancing act. Cutting the price you pay for traffic sounds logical. If your player value in a market is only €200, why would you pay €250? €100 to €150 seems the obvious answer, right?
In theory, yes. But you also need to consider the wider market. If a competitor has perfected their funnel and achieves a player LTV of €400, they can safely pay €250 knowing they’ll see a return. And you both want traffic from the same source.
If the affiliate sends you 10 players at €100, they earn €1,000. If they send those 10 players to your competitor, they earn €2,500. As the affiliate, logic says follow the money.
So understanding customer lifetime value by product, country and source is only the first step. Optimising your affiliate deals around it is the second. To really grow, the third step is optimising every stage of the customer lifecycle so you stay competitive.
The lifecycle stages you control
Acquisition
You’ve optimised the price, but have you optimised the journey? Do you know whether your home page or your sign-up page converts better?
Is all your external information correct? For example, are affiliates displaying the right welcome bonus? Are sports affiliates sending traffic to a sports-themed page, or to a casino-focused home page?
Conversion
How easy is it to sign up? Do players really need to fill in four pages of information?
When it comes to payment, is the deposit button easy to find, and do the payment methods you advertise match the ones you offer? What happens if someone abandons a deposit? Will they ever hear from you again?
And if they sign up but never deposit, how long before you try to tempt them back? If it’s a generic, untargeted CRM email seven days later, is it any wonder they aren’t engaging?
Retention and engagement
What reason do your players have to keep coming back? Do you know which games they like? If they only play live casino, why do you keep sending them sweet bonanza promotions? Did you give them free spins on their birthday What about cashback?
The takeaway
There are so many areas you can look at. The more data you have, the more power you have. And the more power you have, the more control you have over your success.
Elaine Gardiner is managing director at TAG Media and co-founder of affie.ai
