Does iGaming Affiliate Marketing Have A Future?

Over the past decade or so, affiliate marketing has matured to become one of the principal growth drivers of the iGaming industry. From individuals working from their laptops at home (or on the beach), performance marketing superpowers have rapidly emerged. Today, in iGaming hubs like Malta, large operations such as GiG, Catena Media, and Game Lounge, market hundreds of casino, sports betting, crypto, and financial services brands to consumers all over the world.

Indeed, affiliate marketing has become a cornerstone of digital marketing strategies, enabling businesses to easily leverage the power of a vast network of dedicated content creators, bloggers, and influencers - without having to build such a network themselves. And, though there are several different commission structures used, the basic principle is the same as it always was - affiliates earn commissions for sales, clicks, or leads generated.

Sounds simple, right? Well, it basically was, and many businesses and individuals in the iGaming space have made fortunes from it. But, is the party nearly over for gambling affiliates? Actually, has the writing been on the wall for some time now?

Oversaturation, SEO changes, and other challenges

For years, it has been obvious the affiliate marketing space was becoming overcrowded, with numerous players vying for the attention of the same target audience. Of course, this saturation makes it harder for new affiliates to break into the scene and gain traction. The result is that, over the past few years, we’ve seen a lot of market consolidation, with the big players buying the promising small operations, and the weaker businesses (especially one-man operations), falling by the wayside.

One of the principal reasons small affiliates now struggle is the frequent search engine algorithm changes. Clearly, if you’ve got a team of experts focusing full-time on SEO, you’re better able to keep up with Google’s incessant algorithm changes, and more likely to spot opportunities to pull in organic traffic with highly targeted content.

Then, there’s regulation. The early days of the online gambling industry were pretty much a ‘Wild West’ - there were few rules and no one really enforced those there were. Most gambling markets weren’t regulated, and most early licenses were little more than formalities anyway. Today, most valuable mature markets are tightly regulated (for example, the UK, the Netherlands, Sweden, and Germany), and many emerging markets are also putting into place fairly robust frameworks. Needless to say, achieving compliance for highly-regulated markets is a daunting task even for the biggest affiliates. For small affiliates, the unregulated/lightly regulated ‘grey’ markets still offer some respite, but with more markets regulating, and more affiliates than ever targeting the remaining regions, it’s cold comfort.

Additionally, even when affiliates think they’ve earned commissions, there’s the issue of disputes. The complex nature of the online gambling industry can often lead to payment and commission-related challenges. Discrepancies in tracking, delayed payments, or disputes over commissions can strain the relationship between affiliates and operators.

And, let’s not forget, all of these challenges are on top of the ones that have always been there in any marketing, like building and maintaining trust and credibility, maintaining product quality, and keeping up with consumer trends. It’s definitely a tough space to operate in.

Enter AI: the coming paradigm shift

As if all these challenges weren’t enough for the iGaming affiliate marketing industry, there’s something potentially even more disruptive happening right now; the AI revolution.

While many people in the industry talk about how artificial intelligence will change the way people work, few have really thought about how it might undermine the very foundations of affiliate marketing. Yes, AI will likely improve productivity and efficiency, especially regarding content generation, data analysis, personalisation, and localisation, but it could also render large-scale affiliate marketing obsolete very quickly.

I’ve written about this issue in detail already (see What Happens When AI and SEO Collide?), but basically, my argument is that affiliate marketing is only viable as a business because search engines, like Google and Bing, are so flawed. As I previously put it “Since the early days of search engines, there’s been a constant, and increasingly rapid evolution as SEO became ever more sophisticated. But, the pace of change was still within the capacity of individuals, teams, and businesses to adapt. And, most critically, this environment meant there were always opportunities for those employing the latest and best SEO practices to leapfrog the competition. This environment is exactly what has allowed affiliate and performance marketing companies to become so successful - especially in sectors like iGaming.”

Anyone working in affiliate marketing will be familiar with running things like CGA (content gap analysis), and using Google Analytics, Ahrefs, Semrush, and AnswerThePublic to help plan content that will, hopefully, rank better than the competition. But, again, fundamentally, this is only possible because no one is perfect - there are always ways to improve, to better meet user intent. But, the sheer capabilities of AI mean this situation is probably going to become unworkable - once a critical mass of content is ‘checking all the boxes’ or filling all the gaps, then the principles behind the search we all know will have to change, at the most fundamental level.

AI will also flood the web with so much content, that the over-saturation we’ve seen to this point will seem like a dripping tap compared to the tsunami that’s coming. Again, I’ve written about this in more detail recently. Simply put, Google isn’t going anywhere (for now), but in a few years, searching the web will be very different. Regardless of the technical minutia involved, it has to be. There will simply be too much content, that is constantly being automatically optimised, being created for search to work like it does now.

Even in the unlikely scenario that Google tries to keep to its current search principles, just making more iterative updates to its existing algorithms, it won’t help today’s big affiliate businesses.

Why? Because of predictability. A large business of any sort needs an element of predictability in order to be viable. You need to be able to relatively accurately estimate revenues so that you can ensure your costs are lower and will leave you a profit. In the affiliate marketing business, this means you need to be able to, reasonably accurately, know that if you invest a certain amount of time and resources in creating content and optimising it, you’ll likely generate ‘X’ amount of revenue.

Yes, I know, even today, there’s a large element of chance and luck involved - many affiliate campaigns fail to deliver. But, the point is, on balance, successful large affiliate businesses are able to fairly accurately predict results, enough of the time. This is what enables them to invest so much in growing their operations, building their teams, and acquiring new properties.

But, what if, thanks to AI and a completely new way of searching, this predictability evaporates? What if AI effectively removes the ability of affiliate teams to find reliable, predictable opportunities? Furthermore, if this means that affiliates can no longer offer a reasonably reliable way to generate leads for operators, then won’t operators start to bring marketing in-house again - especially given the fact that AI tools will make content generation and optimisation much easier and quicker?

Does iGaming affiliate marketing have a future?

So, is iGaming affiliate marketing dead? I don’t think so. What I do think is that the big performance marketing companies, with their hundreds of staff and swanky offices, are about to see their business models collapse. They have become dominant in the industry by rapidly scaling, allowing them to cope with the pre-AI challenges. But, I think it is this very scale, which requires a level of predictability and forward planning, that will soon be their undoing, for the reasons I’ve described.

Don’t get me wrong, I think some of the large affiliate marketing companies will survive in some form, but they will be much leaner in terms of staff and other overheads. Conversely, it is conceivable that AI tools will enable small affiliates to overcome some of the things they were struggling with - enabling them to scale content creation and optimisation, and better manage complicated issues like compliance. Of course, small affiliates don’t have the massive overheads and liabilities of the big companies, so will be better suited to the increasingly unpredictable future.

But, then again, no one knows what the future holds. One thing is for sure though, flexibility and minimising exposure to fixed costs will be key.