In the modern competitive iGaming industry, some of the decisions that operators have to make can define the evolution of their business. Another vital question is whether to use an affiliate network or manage an in-house program. Each solution has its advantages and drawbacks, but it is important to realize when it is better to outsource and when to develop it internally to achieve speedy market penetration and sustainability.
What do the two models offer, what are the trade-offs, and how can operators determine which approach suits them?
Understanding Affiliate Networks and In-House Programs
What Is an Affiliate Network?
An affiliate network is an intermediary between operators and their affiliates. Operators access a ready-made pool of partners, instead of recruiting, onboarding, and managing affiliates manually. In the case of iGaming brands, this leads to swift exposure, quicker acquisition, and can hit multiple markets without having to scale the infrastructure themselves.
What Is an In-House Affiliate Program?
In contrast, an in-house affiliate scheme is run by the operator. Affiliates do direct sign-up by using the own platform of the brand, and the internal backend takes care of onboarding, reporting, compliance, and payments. Although this path provides increased control over alliance and brand options, it needs higher investment in equipment, personnel, and sustaining supervision.
Pros and Cons of Affiliate Networks
Advantages of Joining an Affiliate Network
The biggest benefit of using an affiliate network is speed. Immediately, operators can access hundreds or even thousands of affiliates. This shortens the process of establishing visibility and acquiring players. Networks also offer established mechanisms to follow, report, and pay, which makes them especially useful to brands in newly regulated markets.
The other advantage is scalability. The right network will also help operators cater to a variety of regions within a short period, since it has established affiliates that are aware of the markets they operate in and the behavior of players.
Potential Drawbacks of Affiliate Networks
Nevertheless, outsourcing has its costs. Commission fees are profit killers, and they usually have little influence on how their brand will be promoted. In other instances, affiliates in the same network may end up promoting rivals, thus overlapping with traffic sources.
Operators with very high compliance demands or brand positioning may consider these restrictions too limiting.
When Should Operators Choose an Affiliate Network?
Ideal Scenarios for Outsourcing
Affiliate networks are best when:
- New businesses in a highly competitive or controlled industry.
- Brands with fewer resources to allocate to internal management of affiliate programs.
- Operators in search of fast growth and immediate market presence.
In the case of these businesses, access to a network of affiliates with limited initial outlay can be the most direct path to revenue.
Key Considerations Before Joining a Network
Operators should consider:
- The reputation of the network and the history of iGaming.
- Commission structures and the disclosures on each report.
- Readiness to abide by various jurisdictions.
All these will define whether the partnership will yield sustainable results or whether it will lead to dependency.
When Should Operators Run an In-House Program?
Although networks have reach, in-house programs are typically the right solution when an operator has a strong brand and resources. Affiliate management maintains full control over how the brand is represented, affiliate commission structures can be adjusted to any business need, and sensitive data is not exposed to the wild.
In-house programs enable closer relationships with affiliates, as they grant the operators a stronger say in campaign strategy and compliance. This is because customization is important to multi-vertical operators who cater to casino, poker, and even sports.
Hybrid Approach: Combining Affiliate Networks and In-House Programs
To some operators, both solutions hold the best. A hybrid strategy enables a brand to take advantage of network-scale with short-term scaling provided by networks, as well as future control and optimizations through the creation of an in-house program.
Why Some Operators Use Both
- When moving to new markets, affiliate networks enable rapid acquisition
- Programs run internally build stronger and more entrenched relationships over time.
- The combination is a mix of speed and control.
Example Workflow
An operator could start with an affiliate network in order to create visibility in regulated markets and slowly shift the affiliates into an in-house program as the brand awareness increases. This incremental strategy can reduce risk and establish a healthy future.
Conclusion
The choice of an affiliate network or an in-house program by iGaming operators is rarely one or the other. Outsourcing is fast, can be scaled, and has low initial outlays, whereas in-house programs are more customized and develop stronger ties with the affiliates.
The best operators take a hybrid form that is breaking into new markets with networks, but then developing their own networks to sustain their business. Even more, platforms such as Affnook add an extra dimension to this process, including enhanced tracking, compliance features, and automation, facilitating outsourcing and in-house approaches.
Finally, the decision depends on the level of development, available resources, and the long-term goals of the operator. In an industry as competitive as iGaming, the wisest operators are those that can learn when to outsource and when to invest internally and how to successfully complement both strategies.
