We caught up with founder of wag.io, Roo Wright about how the affiliate industry is changing and how programmes can ensure they remain compliant and support continued revenue growth. We take a look at how these regulatory changes will affect the strategic management of affiliate programmes in future. Wag.io have recently signed a few large affiliate programmes onto their compliance management platform, which supports the fact that the industry is taking regulation seriously. Roo share’s his insight with Affiliate Insider readers here below:
There was a time when affiliate marketing was relatively easy and anyone could jump into it and start making a profit. This was largely due to the lack of any enforceable regulations in affiliate marketing, and affiliate marketers took advantage of this relaxed governance. In fact, savvy individuals used just about every strategy out there to get ahead of the competition.
Affiliates had very little restrictions or limitations when it came to SEO, banner advertising or using PPC to promote their products and services. There was one affiliate I remember, who made over $140,000 a month from the misspelt keywords ‘Party Pocker’ via his SEO efforts and direct type-in traffic.
Things have changed considerably during the last few years as governments and regulatory bodies across the world have started to pay more attention to affiliate marketing. There is now much scrutiny over the products and services being promoted, and even the advertising methods used.
Online Gambling Industry Under Close Watch
The online gambling industry has been one of a select few industries on the receiving end of much attention from regulators in the last couple of years. New Jersey’s Division Of Gaming Enforcement’s (DGE) has even cracked the whip on affiliate marketers that promote online poker in the Garden State.
The United Kingdom has faced growing concerns that affiliate marketers may breach regulations to promote online gambling and sports betting in the country. The UK has actually experienced an increase in problem gambling in the last 24 months, and there have been concerns that some online gambling websites are targeting minors.
This has forced the Competition and Markets Authority (CMA) and Advertising Standards Authority (ASA) to launch an investigation into online gambling websites, their marketing and advertising practices. This has led regulators to their affiliate marketing partners. The CMA is even working together with the gambling regulator in the country, and has found at least 5 iGaming operators to be in violation of regulations.
The ASA watchdog has ruled against four sports betting operators who have violated advertising regulations. The UK Gambling Commission (UKGC) launched their own investigation and found 17 iGaming firms to be in breach of anti-money laundering regulations and social responsibility.
iGaming Firms Are Taking Things Seriously
These iGaming firms were issued cautionary warnings in the past but most of them never took the warnings seriously, and continued to breach compliance laws. The UKGC cracked the whip on these firms recently and issued a combined millions in fines during the last 12 months, a considerable increase when compared to the previous year.
The stringent fines have sent a message to these iGaming operators that were in violation of compliance laws, as well as to other iGaming operators who have now taken steps to ensure they and their affiliates fully comply with regulations.
PaddyPower Betfair was one of the most prolific operators that decided to not only draw the line with what was acceptable, but sent a strict message out to its affiliate marketers, warning them to fully comply with all regulations or risk having their marketing accounts shut down. PaddyPower Betfair has taken further steps to be fully compliant and mitigate affiliate regulated risk by issuing a warning to its affiliate marketers of a new ‘One Strike And You Are Out’ rule.
Help Keep Affiliates Compliant
The increasing intensity of regulatory pressure has led to an environment of accountability for both affiliates and operators. As tough as this compliance driven economy may seem, the final objective is for an optimal customer experience.
Affiliate marketing is clearly in a moment of transition. It continues to be a highly effective method of customer acquisition, however it’s time for brand owners to evolve their perceptions. Affiliates should now be viewed as business partners. They are an extension of the brands they promote, and should endeavour to represent these within brand and regulatory guidelines.
The primary responsibility for observing the ASA and CAP code remains with the gambling operator. This requires a more proactive attitude to affiliate management and awareness of local or international laws, and regulatory issues. Similarly, affiliates can learn and adapt to this new environment.
Credible sources of industry information such as AffiliateInsider.com and The International Gaming Affiliate Association (iGAA), are crucial. They provide essential insights that focus on quality information and affiliate education. There are also numerous tools that can help operators correct legacy promotional issues and maintain a compliance-friendly environment.
Optimistically, we can assume that refining the affiliate marketing process would be key to thriving within this new environment. It doesn’t matter if you are a brand or an affiliate. It doesn’t even matter if you choose an automated solution or implement a manual process. If you want to survive, it’s time to evolve.