There has been a lot of chatter surrounding online poker trends, consolidation, ecosystems, rakeback and the industry shake-up that US regulation would bring about. So what does this mean for poker affiliates?
Jeremy Enke, founder of Poker Affiliate Listings and one of the most informed online poker affiliates in the industry, agreed to share some of his expertise in this space. During the interview, Jeremy covered how poker affiliate managers must become their own brand and the importance of trust, changes in poker affiliate program Ts & Cs, sharks vs. fish and what is better for the affiliate, the rakeback debate, what happens to affiliates if the US opens up and advice for success in 2011.
This interview will be shared in two parts, the first with a focus on affiliate managers and affiliate programs and a second on rakeback and the US market.
PART 2: Poker affiliate marketing strategies for 2011, rakeback and the US market
Becky: There has been a lot of discussion around whether its better for rooms to focus on the sharks or the fish…what is best for the affiliate?
Jeremy: Both types of players can be lucrative from an affiliate standpoint. The sharks will provide much more volume and longer retention because they will undoubtedly be on rakeback. However this means your profit margins will be far less. The fish on the other hand will continuously deposit and allow you to make the maximum revenue share. However, they are much more likely to go broke, become unable to deposit, or simply start playing at another room.
Contrary to popular belief, most poker rooms do not like having an imbalance of sharks versus fish. Sure the sharks will rake thousands of dollars per month, but they can easily destroy the overall poker ecology by essentially breaking the fish and being the only ones left with all the money. This is why some operators with skins on networks who provide fish (usually sportsbooks) have been “ring fencing” their players. They don’t like all of their fishy sports bettors being destroyed by the pro’s and essentially moving their rake dollars to another operator.
For an affiliate, I think it’s best to be diversified and in your recruiting efforts try to refer both types of players.
Becky: There are a number of affiliates that have dedicated their business model to rakeback and have made a lot of money doing it- how do you respond to people who say that rakeback is bad for the poker ecosystem?
Jeremy: This is a great question Becky. Back in 2004 when rakeback was just getting popular, there were some pretty heated discussions between rakeback and non-rakeback affiliates. I’ll never forget, during the CAC beer session in Las Vegas I made the point that it wasn’t the rakeback affiliates driving players to this new model; it was the players themselves.
The same holds true today. Whether you agree or disagree with the rakeback business model in online poker, it’s the high value players that are driving it. Likewise barring any U.S. legislation, it is here to stay. I think there’s a lot worse things for the poker ecosystem such as bots and especially players tracking tools where your opponents can get an immediate snapshot of your style, history, wins/losses, etc. Combine that with rakeback and now you’re looking at a sure fire way to move all the money from the fish to the sharks and essentially cannibalize the poker ecosystem.
I’ve always been indifferent on rakeback. I don’t love it, nor do I hate. Some of my affiliate friends have become very wealthy embracing the business model. I say kudos to them.
Becky: How should affiliates plan their marketing strategies for when/if online poker is legalized in the U.S.?
Jeremy: Wow, this is a tough one! Nobody really knows what will happen if and when U.S. regulation takes place. The best thing a poker affiliate can do right now though is to be prepared and diversify. Let’s face it, the days of ridiculous CPA’s, Rakeback, and maybe even revenue share may be long gone if a few Las Vegas casino companies are controlling the U.S. market. We might be lucky with $50 CPA’s from Harrah’s on CJ, and that’s it. If the States or any type of Federal government is truly controlling the market however, it might be even worse.
The best thing poker affiliates can do right now is to keep on keeping on, but adjust their 5 year expectations in the gaming industry as “unknown”. Likewise diversify into other niches and markets. I have never met a successful poker affiliate that can’t take their acquired skills and acumen and kill it in other affiliate markets. Poker and Casino is amongst the most competitive affiliate markets in the world.
In closing, 2011 is going to be an interesting year for all of us. And who knows what 2012 and beyond holds! The good news however is that poker is a global pastime and will continue to be played for many years to come. The opportunities as affiliate marketers may be more challenging in the future, however the business potential of marketing online poker will never go away.
Becky: Do you have any advice for poker affiliates who are want to succeed in 2011?
Jeremy: As the industry continues to become more competitive, it will be important for poker affiliates to think outside the box and try new things. Unfortunately building a static review site and buying a few links is not going to work anymore. I think diversifying within poker will be important as well. For example promoting training sites or add on products.
I also think it is important for poker affiliates to leverage their skill base and diversify into other niche’s within gaming and even outside gaming. Often times poker affiliates get trapped in their “poker affiliate” bubble and forget that there are multiple opportunities out there if you just go out and find them. I’ll leave you with one of my favorite old school quotes, “There’s a million ways to make a million dollars, you only have to find one.”