Industry interim results have highlighted the woes of igaming’s affiliate media companies. Across the board, the results of affiliates have been lacklustre, witnessing a slowdown in growth across key markets and declines in the performance of media assets.

Ted Menmuir, SBC’s Content Director, and Martyn Elliott, SBC’s Project Director, joined James Ross on the latest episode of iGaming Daily, supported by Optimove, to dig deeper into the causes of the downturn.

First under the microscope was Better Collective. The igaming media group announced year-to-date revenue of €194m, up 17% year-over-year, however, the firm’s EBITDA stagnated at €20m.

Ted explained that the company has attributed the results to the fact that it transitioned its operating model for its US network from a high-value cost-per-acquisition (CPA) model to a revenue share model. 

The company predicts better results going forward and Martyn agreed that the switch in strategy is a “good long-term decision”.

He said: “If you look at the way the operator market is shaping up in the US, there is not a huge amount of competition, particularly in sports.

“Igaming hasn’t yet opened up in the way everyone was hoping it was. So you can almost view it as a defensive move to go with a longer-term revenue share model. I think it will work for them but time will tell.”

Catena Media has also struggled, with delivery of new customers declining by half to 30,000 and revenue dropping by 65% to $9m.

Affiliates in the gaming sector rely on paid partnerships. However, this model is under threat due to changes to Google’s algorithm which are downgrading these paid partnerships.

Ted suggested that Catena Media could be the most susceptible to being impacted by the changes. 

He said: “My view is that from what’s been reported, Catena carries the biggest exposure in terms of its paid partnerships with US partners to Google’s changes.

“It is a discipline in which the majority of affiliates are putting significant resources to so I don’t think that they’re just going to be giving up on paid partnerships, but I think they’ve got to readjust to putting out better, more informative content and re-engaging their partnerships in a new way.”

Towards the end of the episode, the trio examined the trends that could define the future of the affiliate section and Ted explained that it is “a period of transformation” for the main players in the industry.

He explained: ”In 2023 and 2024 we’ve seen that a lot of the gambling affiliates have entered a period of reorganisation and transformation, rebalancing their networks. The other thing is that they are undertaking a revision of their required M&A assets.  

“Short term from an H2 perspective, I think the analysts and observers in the affiliate space are going to be looking at the cost balance sheets of these companies. They’ve got big tech projects and big integrations, but it’s also going to come down to what their revenue to EBITDA generation is and how they maintain their cost balance sheets.”