Can you tell us about the roots of MatchingVisions?
MatchingVisions was founded in early 2014. Our idea was to offer a proper affiliate network. Building on the good connections we had in Malta, we were able to strike very good deals with online casinos. Our network has been growing very quickly, and we always had a focus on paying our affiliates on time, which is often not the case within the sector. We pay our affiliates within 15 days of the following month close. This means we pay our affiliates before we get paid. We have grown organically and received some interest for acquiring us in late 2016, but we will not mention any names. The market among affiliates is consolidating now with a few big players globally: Catena Media, RakeTech and XLMedia.
Is it hard to survive as a smaller affiliate as others are consolidating?
In our case, we are not that small because we manage a network of affiliates. We are part of the big three in Malta. We are also seeing more and more small affiliates popping up, and as soon as they record their first successes, the industry is keen to acquire them. Operators are starting to appreciate small affiliates as well because they are easier to negotiate with. Larger affiliates have much more leverage and can charge higher prices, or shut down traffic. Ourselves, we are not acting aggressively, it may sound romantic but we are thinking long term here.
How does the consolidation of operators affect the affiliate sector?
This depends on the merger itself. The latest large one, between Cherry and ComeOn, did not really affect us. It was actually beneficial because we were already working with the larger one of them. However, there could always be cases where one has an excellent relationship with the smaller company, but not with the larger one. In those cases, the merger can materialise in the wrong way with the new management. An operator could just stop our deal; therefore it is all about maintaining a good relationship so that they would not want to do that.
Why do operators not just generate the leads themselves?
Companies need to focus on what they are good at. If you are running an operation, this must be your focus. We have seen a few operators trying to start SEO departments of their own. We have also seen some affiliates trying to run operations. It is not as easy as people think. The focus needs to be 110%.
What are your thoughts on regulating the affiliate sector, and what form of regulation would you prefer, optional or conditional?
We would welcome regulation of affiliates. We think that regulation could be a way of making the sector more transparent. We play with open cards and would prefer everyone else to do the same. As the middle man running a network, it would make it easier for us if we had transparency since we are sometimes stuck between the affiliate and the operator.
Regulation would certainly eliminate unprofessional affiliates. Affiliate forums already offer accredited affiliate programmes, but they can never be as successful in improving standards as audits and proper licences could be. The larger affiliates would probably support regulations, the smaller ones probably not. However, I also think that regulations should not be too strict, but we would certainly prefer compulsory KYC-checks for affiliate networks to get rid of the wild west that is ongoing.
What are the biggest issues when it comes to affiliate fraud?
Most common are what we call CPA-fraud. It works like this: operators pay affiliates for every customer who deposits money in the casino. The cost per acquisition (CPA) could be €150, and the payout to the affiliate is triggered once the customer deposits €10 in the casino. You might have some affiliates signing up bands of fake customers. These fake customers deposit the minimum amount to trigger the payout and then never return. If an affiliate has 10 fake customers depositing €10 each, the affiliate will get paid €1500 at a cost of €100. Many operators and affiliates have hired full-time fraud detection officers due to the damage a fraud ring like this can cause. We are now quite good at seeing the patterns of these naughty guys and can immediately alert an operator.
From an affiliate perspective, what is the most difficult European country to operate in?
Denmark is quite complicated. They have this system called NameID, which verifies the identity when an account is being set up. Registering a player account, therefore, takes more time. Player values, however, tend to increase as they do not play around as much because of the complicated KYC procedure. Germany is also quite difficult due to the tax framework.
What can you say about player behaviour trends, do you see anything changing in terms of retention?
Players today are becoming a lot harder to retain. There are so many options for them now with all the new casinos. New casinos often receive a lot of traffic but it is not always quality traffic. Many people are just trying it out, taking the bonus and moving on. There are some known brands where people tend to stay a bit longer. The player lifetime value has also decreased in the last few years. Hence, we are trying to put some pressure on the operators to work harder on their customer relation management.