The online gambling affiliate marketplace has changed so much over the last decade that we cannot even imagine what things were like back in 2004. So many of the biggest and most successful affiliates from the mid-2000s are no longer- some by choice and some had no choice- mainly because the formula for success has taken on a completely different form. What worked back then does not work now.
Despite the rise and fall of many online gambling affiliates, one who has remained at the top of the food chain since the very beginning is Ory Weihs, currently the CEO of XLMedia PLC. I first met Weihs about eight years ago, back in his Reef Media days, and I recognized his unique abilities straight away. By constantly studying the marketplace and staying one step ahead of his competition, Weihs has grown his affiliate network into a full-blown PLC – the first of its kind to go public.
In an effort to understand how one person can continue to disrupt in the online gambling affiliate industry for over a decade, I spoke with Weihs to hear more about his strategy and what drives him to succeed.
Becky Liggero: Ory, it’s a pleasure as always- thank you for joining me today. After working in the affiliate marketing industry for a decade, can you explain the shift we’ve seen from affiliate marketing to performance marketing over the past ten years?
Ory Weihs: We have always been focused on performance marketing. When we started the business ROI was a key focus particularly as we were spending our own funds.
As we see the industry mature and competition increase, we see a greater need for technology and experience in order to maintain a consistent track record of success.
In the early days, around 2004-2005, a simple site with limited features and content could generate significant revenue. These days in the content and search field, it’s all about delivering great content and features to engage the maximum number of users. In the media world, technological and analytical superiority are pivotal. We have spent the last few years upgrading our systems, increasing our financial control and opening more channels such as mobile and social marketing.
I would say that the shift has gone from a sense of “tranquility” back in the early days to a very ROI focused technologically oriented approach today.
BL: Agreed- the landscape truly has changed since “the early days”, but you have always been one step ahead. At what point did you decide that going public was the right thing for your company and why?
OW: As one of the early entrants to this market, over the years we have identified several interesting opportunities. Within a fragmented environment such as the online marketing segment, in order to capitalize on some of these opportunities you need accessible funds. In the past we have bought several websites and domains, but in order to scale the business further we wanted to access significantly larger opportunities.
Following our first private equity investment in 2012 we began assessing our options, which included further private equity investment as well as an IPO. We ended up going for both. During 2013 we started the process and listed successfully (IPO was oversubscribed) in March 2014.
We are progressing with some of these opportunities and aim to close at least one significant acquisition before the end of this year.
BL: This is exciting news and an interesting perspective, Ory. Some iGaming companies have purposely chosen to remain private so they have more freedom, so they can make decisions quickly, so they can take more risks, they can have more freedom to innovate- how valid are these statements, in your opinion?
OW: As we see it, the benefits of being a PLC outweigh the disadvantages. The access we see today to new markets, products and platforms compensates for any additional exposure of data being a PLC may bring. Indeed there is some extra complexity when running a public company but personally I find the experience a challenging and motivating one.
Innovation wise we still work hard to stay on top of the game and the improved financial position will assist us in investing internally and via acquisitions in technology.
During the process of the IPO we added more knowledge and experience to our Board. Our board of directors and executive team is very dynamic and knowledgeable so we can still make decisions quite fast, but enjoy the benefits of additional views and discussion on important decisions.
BL: Sounds like going public was the right decision for you. You’ve also made the decision to expand your core markets from Scandinavia and the UK to other parts of the world- can you tell us where and why those new markets?
OW: As we mentioned in our recent trading update, our focus has been on expanding out of our core markets. We are making good progress in German and English speaking markets as well as Denmark & Greece (both being regulated markets).
The recent acquisition of a website network allowed us entry into Denmark, while organic growth is leading the way in other territories. The markets we focus on offer a combination of wide reach, generally high player values and comfortable regulatory environments.
BL: What are your thoughts on the regulated US market and the opportunity affiliates will find there?
OW: The US market is very exciting in the medium to long term. Currently there are only a few states that have a regulated market and the limited number of existing operators makes this a perfect time for setup. We do not expect significant revenues from gambling in the US in the next couple of years but are active in buying domains & websites for the North American markets and believe these will generate revenues once more states regulate online gambling. I believe that once the market is bigger, affiliates will have to establish themselves in the US by bringing marketing knowledge and technology.
In the meantime, we are using the time to build up our US presence organically and look for targeted acquisitions as well as testing other online marketing activities outside gambling which do not require licenses in order to gain a greater understanding of the American markets. Such products include personal financing, social gaming and others.
BL: I think that’s a great strategy for developing a presence in the US market. What about your social media strategy?
OW: We have been investing heavily in different kinds of social media activities, and as we progress we gain more knowledge and experience. Our areas of interest range from social advertising on Facebook and other sites (web and mobile), video and enhancing our own properties’ social factor. Going forward we are looking to invest more in this growing segment, with a focus on mobile.
BL: Ah, yes- mobile. Can you elaborate?
OW: We are investing in mobile via our social segment. Separate from social we are progressing with advertising on mobile networks, in app advertising as well as app store optimization. Currently a major factor in mobile is tracking. Many operators are still struggling with modern tracking solutions, and those that have taken the initiative are receiving a larger chunk of our traffic.
In general, much has been already been said about the mobile gaming industry but I will add that it represents a whole new level of distribution. From our perspective being able to access users constantly as opposed to just when they are in front of their computer allows for much more targeted and effective advertising.
Our plans going forward are to invest heavily in both development and understanding of the mobile scene as it is anticipated it will be a major distribution channel in the upcoming years.
BL: Mobile is most definitely the way forward- as I said before, you are always one step ahead, Ory. Is there anything else you want to add?
OW: Nothing at this point, thank you for taking time for this interview, Becky.
BL: You are most welcome. Thank you for sharing your expertise with our readers.