We caught up with Tero Päivärinta, Head of Accounts for CashMagnet to hear his perspective on the growing market, brand development and what benefits a regulated European affiliate market might potentially bring in the future.
When acquiring mid-low level affiliates, how can parent companies ensure that the level of content and service provided meets potentially higher companywide standards?
“Different affiliates take a different approach but here at CashMagnet we have developed a proprietary platform and content management system that allows us to quickly and easily add new brands and ensure they benefit from the same standard of content as that found on our flagship brand, Mr-Gamble.
“Our in-house technology is incredibly powerful and enables us to add and efficiently manage an unlimited number of brands/sites from one place. In addition to this, our content writers follow company-wide writing standards to ensure accuracy, consistency and quality across all our sites.”
What are the benefits of growing traffic through affiliate acquisition as opposed to organically? What are the associated risks and benefits?
“The main benefit is that it is much easier to rank for top search terms with an established domain than a new one. For affiliates looking to scale at pace, acquiring brands is the fastest way of doing this as it can take months and even years to build authority into a domain.
“The risk or rather the downside is that it is often more expensive to purchase an existing brand/site than it is build one from the ground up. Of course, over time the cost of acquisition can be easily recovered if the affiliate is able to drive growth in the acquired asset.”
Why did you target UK and Finland markets for your acquisition? What do you see as the key drivers for growth in this market going forward?
“We have enjoyed tremendous success in both Finland and the UK with Mr-Gamble and we believe we can achieve the same with additional brands which is why we have acquired the assets that we have. In the UK, we are also pushing into the bingo vertical for the first time.
“We see this as an exciting move as bingo is a sizable market, but it doesn’t get the same attention as online casino and sports betting. With our platform, content management system and experience, we have what it takes to become a leader in this space.”
Some industry commentators believe that licensed gaming affiliate frameworks such as what we’ve seen in the US is the key to improving industry standards. Do you think this should be implemented in Europe too?
“Yes. We very much believe that affiliates should be regulated and licensed in the same way that operators and game studios are. This is to ensure that affiliates are meeting the same high standards when it comes to responsible gambling and safe gaming.
“Thought needs to be given to what regulatory frameworks should look like so as not to become too restrictive but ultimately this is the best, no, the only way to ensure that affiliates are acting responsibly and that players are properly protected.”
Are there any other European markets that you are excited about for the future?
“Right now, we are looking to extend our reach into newly regulated markets as we believe that these jurisdictions will offer great opportunities in the future. However, we haven’t yet decided which markets we will enter and the order of priority.
“This is a fast-moving industry with new markets and opportunities opening up all the time and we want to make sure we make the right move at the right time.”
From speaking with Tero, it’s clear that the opportunities for growth in Europe are abundant especially in Casino and Slots. The fastest way to do this is through acquiring established brands but this comes at a steep price, it seems to be a successful strategy for CashMagnet. It has allowed them to reach new regions such as Finland and pursue new exciting verticals such as Bingo in the UK.
Going forward I think we can expect to see an increase in this type of market activity. The upside to this is the heightened levels of integrity and player protecting, while at the same time, smaller affiliates may find it increasingly difficult to gain significant market share in the regulated markets. It will be interesting to see how this shapes the future as the market tries to find the right balance.