The Affiliate Marketing Podcast - Why Affiliate Management must be done compliantly

On this week’s episode of The Affiliate Marketing Podcast, Lee-Ann Johnstone speaks with Rightlander's Ian Sims and Kindred Head of Affiliates, Ryan Henderson.

They discuss compliance in the iGaming industry and the importance of this for affiliates. Listen to hear their thoughts on how operators can educate affiliates on compliance and more.

Rate, Review, & Subscribe on Apple Podcasts

“I love AffiliateINSIDER’s Affiliate Marketing Podcast.” <– If that sounds like you, please consider rating and reviewing our podcast show!

Taking the time to do that, helps us support more people in our community to access digital and affiliate marketing insights, expert lead learning and the latest online marketing tactics that help Affiliate businesses grow.

Click here, scroll to the bottom, tap to rate with five stars, and select “Write a Review.” Also, if you haven’t done so already, subscribe to the podcast. We will be adding new episodes as we gear up to launch a spectacular 3RD SEASON in January 2021.

Subscribe HERE!

Transcript

SPEAKER_02 0:32

And discuss the latest affiliates and digital marketing friends. If you want to stay at the cutting edge of affiliate marketing, you're in the right place. Join me for this week's episode and let's get started. Today I'm welcomed here with Ian Sims from Wrightlander and Ryan Henderson, head of affiliates at Kendren Group. Hi guys, welcome to the podcast. Thrilled to have you here with me today because we're going to be talking about compliance and affiliate marketing, two of my favorite subjects, and I have two of the best representatives with us today to talk through this really complex subject. So thanks very much for being here.

SPEAKER_01 1:18

It's a pleasure.

SPEAKER_00 1:20

Looking forward to this.

SPEAKER_02 1:21

Okay, so let's kick off with our first question. Affiliate compliance is now being enforced more rigorously in iGaming. And today we've actually had some news about Betson pulling out of the UK. Can you talk to us a little bit about why you think this is important and how each of your businesses are currently supporting this compliance process?

SPEAKER_01 1:43

You want me to take it? Why do I think it's important? Yeah, I it's an interesting question. It's not important, is it? It's required. Um I always find conversations around compliance quite quite entertaining. Um it's uh we live in an increasingly complex um regulated situation. Um and as it gets more complicated, um obviously affiliates are are asked to uh update frequently uh how they're promoting operators and and and some of the language used and things like that. Um yeah, I I mean it's yeah, again, it's it's it it's a default, you know. The thing about compliance is you have to be compliant. Um and um, you know, it's not a it's not a yes or no sort of situation, is it? Um so yeah, I mean, listen, it's it it's increasingly complicated. Um and in terms of supporting it, I mean, you know, it's no secret, we we we talk about the relationship we have with Rightland and um worked with Ian a lot in the last couple of years. I think we were one of the first clients with with Rightland, Ian. I can't remember that. Yeah, signed on a piece of paper on my knee, I think, at LAC 2018, something like that. Yeah, back in back in the days when we used to see each other in in person. Yeah, yeah. Um we we've got a few different people helping us out with compliance, and Ian and the Rightlands team, obviously one of them. Um it's an increasing burden, I think, for everybody. It's an increasing burden for affiliates, uh, and I'm super conscious of that. Um, it's an increasing burden for for myself and the team. I mean more more of a team, if I'm being honest, um, in terms of managing uh how we're how we're promoted, how we're exposed, um, and the relationships with affiliates that are doing that. Um and and you know, we're very sympathetic. I I've been doing affiliate marketing for 15, 15, 16 years. I know lots lots of people know me, and I know lots of other people, and you know, I'm very sympathetic to the the increasing demands on affiliates to to do this. But ultimately, uh, you know, compliance regulation is there to protect the player. That's that's what we have to remember, that's what's important, and and and that message and that desire to protect the player and to create a sustainable um marketplace um has to be kind of front of mind, and we think we have to get behind that.

SPEAKER_00 4:07

Yeah, I mean I second that, but it's it's a mindset as much as anything, but especially when you know I was an affiliate for 12 years prior to doing right then, and you get into this kind of this way of doing things, you know, everything's about bonuses and trying to push players through to operators, and you know, I I didn't give it much of a second thought, to be honest with you, in terms of vulnerable gamblers. And I think what this does is opens a conversation and makes people aware that not everyone is the same. So I think it's it is very important to treat to be aware of vulnerable gamblers, and and probably one thing that kind of gets missed out in all of this is uh the sort of trigger points that do trigger vulnerable gamblers. You see a lot of politicians getting involved, you see the UKGC kind of caught between a rock and a hard place with politicians on one side trying to blanket ban everything and the industry on the other and players on the other, saying gambling gambling still needs to be uh enjoyable, it just needs to be you know treated with the right degree of respect, and players and people need to be educated of what the dangers are. You know, it's not really a lot different to alcohol. In fact, if anything, it it's not as dangerous as alcohol when you look at the uh the amount of deaths and families affected by alcoholism and and uh the the general effect on society, it's it's far greater than gambling. But that's not to say that you know one's worse or better than the other, they both deserve a degree of respect. So I think that's all uh really compliance should be doing is trying to get people to understand how they're marketing, what they're saying, what the dangers are, and not just to go for you know using greed to get people in for gambling, make sure that there's a level of um of education. I think actually that education is missing at the moment. I think the uh affiliate could be with operators could be doing a lot more to educate players and other affiliates into how to do this. I think we just got caught up in this whole if something's wrong, we have to ban it, we have to stop people doing it, we have to take the fun out of it. And I'm sure we'll talk about it later in the podcast. There are dangers associated with that.

SPEAKER_02 5:57

I do want to talk, I do want to talk about this because there is an impact of rogue affiliates that are not educated, that are um not following the rules in terms of you know what the gambling regulations and advertising uh regulations stipulate. And in terms of program management, and really this is a question for you, Ryan, and more importantly, liability to your business. I mean, how what effect does rogue behaviour actually have in your program? And and you know, what do affiliates need to really do to make sure that they are keeping themselves compliant, Ian?

SPEAKER_01 6:30

Yeah, well that that's a part, that's an educational piece um in terms of understanding what's necessary in each of the different different markets and and uh you know affiliate marketing, the clues in the title, isn't it? It's marketing, and and back in the day, you know, you used to be able to get away with um with lots of things that that we wouldn't that we wouldn't support now. Um and it's not it's it's almost less about marketing, of course that's that's important, but it's more about um being um compliant and understanding those those regulations in terms of rogue affiliates. Yeah, listen, I mean for me they keep me up at night. I I I've used this phrase I think with Ian a few times, you know, that they're the guys that that cause me sleepless nights, although I don't know who they are. I did if I did, I would have I would have shut them down. Uh sorry, or or educated them. Um, you know, I the there's no place for them. I what what impact do they have on the program? Um, you know, they put the whole program at risk.

SPEAKER_02 7:29

Of course.

SPEAKER_01 7:30

You know, generally being genuine with you guys uh and everybody else, my job now is is less about marketing, it's less about relationship management at my level. It's more about um speaking to the team, educating the team, working with Ian, working with affiliates, um, and and making sure that ultimately we don't lose a license because of the behaviour of a single rogue operator. Uh when I say operator, I mean a sorry, affiliate, not operator, um, that that causes causes problems and goes about marketing in a you know unsustainable um well just non-professional way, yeah.

SPEAKER_02 8:06

I mean the thing is that we're all in this ecosystem together and we're all trying to figure out how best to apply the practices and rules that are being given, but when people don't comply with that, it impacts the whole, it impacts the community.

SPEAKER_01 8:22

Yeah, of course it does. And there's that educational piece as well from one affiliates to another. And um, you know, I think it w as an industry we could probably be better at it um in terms of running compliant seminars and and supporting um uh supporting neural affiliates, I guess, or even existing affiliates in terms of what what it's compliant. The challenge with that is it changes so frequently.

SPEAKER_02 8:45

Yes.

SPEAKER_01 8:46

Um, you know, we had a we had a uh update, I'm sure everybody knows from um PGC a couple of weeks ago with regards to responsible marketing and and the whole hashtag ad conversation which has been going on about how we how we ensure that marketing is flagged as as marketing and advertising industry, and and how how affiliates can can market and how we can work with them. Um and that's another update where we had to put put something out. Um, you know, we've had recent changes in in Germany with regards to to what's possible. Yes, yeah, another email that's gone out, the Swedish market changes changes the situation frequently as well. So more emails out to affiliates and um yeah, um rogue operators going back to I guess the the main question, uh yeah, they're bad for for business, they're bad for everybody. Um and I know we pulled together, you know, we there was there was an instance around around COVID, and I know Ian will probably talk about it, um, with regards to the the search terms on Google, etc., which we sort of love to uh to tackle. Um, you know, so we are we are kind of working together, I guess, but I think perhaps we can do a little bit more. I don't I don't know what that looks like, but I guess that's something for the debate.

SPEAKER_02 9:55

Yeah, so yeah, no, we've had we've had some conversations about this too, in terms of um, you know, trying to rank on keywords that you know are negative gambling keywords and all of that kind of stuff. I mean, it's just you know, can you tell us how your tool can actually help stamp all of that stuff out?

SPEAKER_00 10:13

Yeah, I mean there there are kind of two types of rogue fillia, really. There's the ones that are deliberately being unethical and targeting gamblers they shouldn't, and in ways they shouldn't, other gamblers in ways they shouldn't. And there's the ones that are doing it inadvertently, perhaps you know, they employ a lot of content writers that don't fully understand the space, or there are various reasons. And the COVID thing that that Ryan raised there was probably the latter more than anything. It was writers not really thinking about what they were writing, big headlines saying while you're at home, why don't you gamble more? And it was more a question of the education aspect. And to be fair, it didn't take too long to clear that up. Yeah, months down the line, most people got the message pretty quickly, and most people understood the message, so that was quite easy. But you've still got this kind of core of affiliates. I call them affiliates, I don't think they are affiliates. I think they're people taking advantage of the fact they can become affiliates that are deliberately targeting self-excluded gamblers in Sweden and the UK, for example. That's still a big problem and will continue to be a problem ongoing because they know they're doing it and they refuse to stop it, and they're being supported by unethical.

SPEAKER_02 11:09

It's just unethical.

SPEAKER_00 11:10

Yeah, it is always totally unethical, but they might not necessarily see it that way. I mean, look at the whole COVID thing. You've got people going out and socializing because, for whatever reason, they don't think that this is what's going on is right or they don't believe it. So, you know, people have different ways of reacting to things, and and you'll always have this, and with affiliates, you'll always have if you if you facilitate it, you'll always have people that take advantage of this type of thing. And I think this this runs a bit deeper than the yeah, the facilitation with operators, it goes to platforms and stuff. It's easy to get a white label these days, it's easy to set up as an operator. Yes. And and the people that are supporting the rogue affiliates actually are not so much the licensed operators anymore, the vast majority of affiliates know the right way to do things, they want to work with the right operators, and the industry is a hell of a lot cleaner than it was, you know, even this time last year. Yeah but you've got these this core of affiliates that that go to operators well outside of our jurisdictions that know full well what's going on, have right white label platforms or somewhere, someone platform that's not being monitored, and they're able to facilitate that. And while that happens, you'll never get rid of it. You just have to steer clear of it. Um, yeah.

SPEAKER_02 12:14

That's really the education piece on the affiliates manager side to actually kind of you know enlist automation tools like your own, you know, have regular checks. I mean, what are some of the things that your team does, Ryan, to sort of combat all of this? I know you work with um Rightland already, but are there other things that you encourage your team to do?

SPEAKER_01 12:33

Um we use Rightland, we use Gig Comply. Um, we've got a bit of stuff going on with White Bullet as well. Um I mean Rightland is the the most powerful tool that we have because it takes away a lot of the it takes away a lot of the front end manual work. Um obviously there's there's the back end of that managing that process of ensuring compliance going through it. You know, we're we're very lucky, we're a very big operator, we've got lots of very big heritage brands. Um we have a lot of affiliates. We have into the you know the many thousands of affiliates, of course that that creates a challenge because that means that every single one of those affiliates has to be compliant. And you know, we're um we're working we're working through that list. Um I say we, I mean the team are working through that list. You know, the the job of an affiliate manager now is is so very different to very broad. Yeah, it's very broad. It's it's very broad. And I spoke briefly about you know a bit of a lack of marketing. It's more about kind of um being a compliance officer now, and that's that the job has changed. And certainly at the moment, you know, when we're all sitting at home um focusing well in our own little um bubbles, I guess, and and not not doing a lot of the kind of gregarious kind of meetups and and and relationship side of our role. Um, you know, it can be it can be a bit of a slog, um, certainly in terms of trying to keep on track of this sort of stuff. Um but the team the teams know what to look out for, you know. Um we have regular kind of meetings about it and talk about it. And I I bring it up with obviously monthly meetings, bring it up in every monthly meeting what's what's new, what's different. Um certainly, you know, UK, UK, Sweden taking the brunt of it at the moment with with other stuff coming on board. Um, but it's it's a mind shift, isn't it? It's a mindset shift that Philip, you know, affiliate managers used to go out and and and do deals and get get promotion, but now you're you're almost hesitating um, you know, whenever you speak to to affiliates, especially around new affiliates. And I know there's a question coming up about that, but it's um you know, you're hesitating when you're doing deals, you you want to make sure that the the partners are compliant that they understand. And I've even I'm deal with a few new inquiries around affiliate advertising, and and if the people are asking questions which which shows that they don't understand compliance, I just I just don't really respond, I don't engage with them because as a bill as a bare minimum nowadays, um, you know, you you have to be compliant in the in the markets that we operate.

SPEAKER_02 14:52

So for affiliates that are listening to this podcast, because we do have quite a lot of entry-level affiliates that have kind of joined our community. What are some of the things that you can advise them to do before they start coming to you to talk about commercials? Like what what how do they need to get their ducks in a row? What what kinds of things would you be looking out for? What are the flags?

SPEAKER_01 15:11

Yeah, I mean, for us, we try and include, well, we do include um advertising restrictions, guidelines, whatever you want to call them in in our Ts and C's. I think it's always you know, for any any new affiliate, it's always super important to read T and C's anyway. Yes. Um we we all talk about that, um, entering into contracts when you don't understand what they the restrictions and what you're able to do. Um super important to get that clear. Um and and just on that point, there are lots of terms and clauses which which you won't agree with. Oh well, there are but you may not agree with. Um, but it's good to have that conversation up front with people. Um so definitely, definitely check out teas and season programs. I think that's where most of this information should should sit because a lot of it is around you know a contractual obligation to be compliant, and then we try and specify what that means. Um, you know, any affiliate you should always have a USP. Um I think your USP should be um compliance and should be regulation. And I know that if everybody does that, it doesn't make it a USP, I get that. But but you you know, you should you need to be coming to us with a a really good understanding now of of how you're able to operate and and the restrictions that that you're you know you have to operate within. Um and that doesn't mean the opp you know the opportunity is still there, the the audience is still there. Um it's just that you have to be perhaps a little bit more creative around how you how you access that.

SPEAKER_02 16:31

But I think that also comes down to the fact that affiliates need to consider themselves as an extension of the brands that they promote in terms of the marketing relationship, the marketing responsibility. It's no longer just about traffic driving from one website to another, it's actually a deeper, more meaningful conversation and relationship that needs to be established and compliance, showing that you are compliant and that you understand the industry and the the ground rules that you're meant to be operating in is part of that. Um obviously having yeah.

SPEAKER_01 17:00

Sorry, sorry, Dan. Um, you know, from a regulator's point of view, an affiliate is a is a is a member of our team, it's a member of our staff.

SPEAKER_02 17:07

Exactly.

SPEAKER_01 17:09

They're representing kindred, they're on my team, essentially. Um, I've always thought that anyway, but but even more so um even more so now, you know, and that's another thing to consider. You know, do you want to be working with 50 brands where you've got to try and stay on top of 50 requirements from from different things? And I think that's uh you know, what can we do better as operators, what can we do better as an industry? I think we would benefit from having a clear set of rules that we all adhere to and some kind of um what's the word um alignment, sorry, when uh across across Ts and C's. And I, you know, I know we've been dealing with this for you know two, three years now, and I know the requirements from from Kindred, from 365, from Hills, etc. I know they're all different. Um I think we would benefit from aligning that. And I know that some you know companies like um organizations like RAG are trying to do that. Um, and I I support that. I think you know uh we're here to to work as a partnership and a team, and if we can make your life easier, then I think we should try and do that as well.

SPEAKER_00 18:08

So that's that's the new affiliate model, then is it? So you're going to uh you could employ people rather than give them CPL revenue streams. We can just kind of employ them. Don't joke, we might have to we might have to be able to do that. I'm being I'm being serious. Um as an affiliate again. Why why don't I approach four or five programs and say, right, you employ me on a yearly basis to do these sites and do this, you know. You know what?

SPEAKER_01 18:31

I thought, yeah, it's uh we could end up in that place in a frankly. Um yeah, I it's really interesting. I think there's a lot of changes coming on the horizon and probably outside the scope of the podcast, but um yeah, something like that isn't beyond the realms of impossibility. Um it would certainly make the relationship uh clearer. Um I'm not sure how HR would feel about having you know five 5,000 additional employees.

SPEAKER_02 19:01

Um struggle with that. It actually brings me to my last question because we do need to wrap up. But you guys are both extremely well-versed in the affiliate industry. You've been around as long as what I have. So I really want to just kind of close off this podcast on this very important conversation that we're having about where do you think the future of affiliate marketing is headed and how do you think affiliate roles may change? I mean, obviously, you know, this is one way they could become employees, microemployees. Um, do you think that operators are going to still have, you know, massive affiliate programs, or do you think you're gonna get more selective in terms of how you work with partnerships? Obviously, from Ian's perspective, there's you know massive changes in in like SAS products that are going to come to market to help align the partnership between affiliate and operator. So, where do you guys feel this industry is headed?

SPEAKER_00 19:52

I mean, my my personal feeling is that that we've got to go through um quite a bit more and go through a few dead ends first. I mean, we've got the whole influencer thing to think about yet, and um, which is which is dangerous to our industry as well. There's there's these these kind of dead ends we have to go down. I think you just have to look at the finance industry to get an idea of where we're going to end up. I think when you look at the finance affiliate sector, it's less affiliates behaving in incredibly you know, strict, in a very strict environment. They've got a way of doing things, opinions kind of gone out the window. It's very much, you know, here's a product, this is how you compare it to another product. So I think if you look at finance, the way that works, I think that's that's where our industry will end up. But I think the big difference between us and other sectors is we have this whole grey market hovering under the surface. Yeah. And the way regulation's going at the moment, you know, today we heard about Betson pulling out of the UK, we don't know the reasons, but you know, you can imagine there's been other brands recently, like um, I think Dunder and one or two others have done that in the last week alone. And a lot of those reasons are going to be down to you know, is keeping an affiliate network in a country viable, is keeping a brand in a country viable, or is it become to the point where it's no longer cost effective? And the moment that happens, and and you get a territory then that has no option but for affiliates to start representing grey market operators. So it could go, we could end up with 10 operators in the space um doing what finance do, you know, very, very, very well, but then you'd end up with Google, you know, with lots of grey market operators in front of the players. So I don't think that's necessarily um a track that everyone wants to tread down right now. I think the regulators need to step in and do something about that before we go too much further, in my opinion.

SPEAKER_01 21:32

Yeah, but you'll you're you know, we'll we'll get to a place where affiliates are licensed.

SPEAKER_02 21:37

I think that's coming in you know, in multiple jurisdictions. And uh on the one hand, I look at how the US has handled it, um, and that's budgeting market. I mean, we see growth in that sector. So I do think that that is going to change the way that we manage the strategy behind our affiliate relationships. What about from an operator perspective, Brian, from your perspective?

SPEAKER_01 22:00

Yeah, I I think licensing is inevitable, uh frankly. I uh we know it's been a hot topic for years and and we we've seen it work. Uh US is a really good shout. It works very well in the US, um, certainly in the states that that kindred are in. Um I and I know that it's I know that it's uh not everybody's a fan of it. Um and I think just going back to the the broader picture and sort of the questions that were asked at the beginning, I think you know, yeah, we are looking at a slim down affiliate partnership um programme. I think everybody is, I think we're that's we're going through that anyway. Um, you know, that there are requirements, uh financial requirements now in terms of anti-money laundering, etc., where you know, where affiliates have been asked to verify their account and politely declined and closed it. Um, you know, there there is some bloodletting to to to come, I think, on that. Um, and I think we'll we'll end up in a place where we have, I think I don't know about the brands, I think we'll there's still enough to go around for for most brands. I mean, Betson are obviously quite a Scandinavian Nordic focused group. I think the EGR magazine talks about 3% revenue, and obviously that's it's quite tiny. Um so I think there's space for for operators. I think licensing means the grey market should hopefully hopefully kind of fall away. And I think payment providers will be called in to support that as they are in other markets. Um so I it's it's kind of doom and gloom, and it's well it's it's doom and gloom if you know if you're a if you're a smaller affiliate, unfortunately. I think that space is really challenging at the moment. Um uh uh, you know, I've I've been around, as I said, for many years and I've seen lots of those small guys grow into very, very big companies. In fact, you know, I know the guys that are better collected really well. Um and they're obviously uh PLC now as well. So there's there's still opportunity there, um, but I think you have to be really smart about it and really focus on that, on that niche, on that compliance, understand the audience, and you know, there's always gonna there's always gonna be a need for affiliate marketing, you know, affiliates affiliates do marketing uh better than better than we can. That's why we employ them, uh work with them um to represent the brands.

SPEAKER_00 24:04

Um so I think the nature of people that become affiliates will change though, based on what you just said there, and I totally agree with that. Yeah, they won't be the marketers anymore, it'll be the innovators, the entrepreneurs, people that know how to think differently and leverage data. They'll become the affiliates of the future.

SPEAKER_02 24:18

It's going to be more sophisticated than what it ever has before. I mean, we're on the cusp of another like revolution in affiliate marketing, as far as I'm concerned, and strategy is going to become immensely important. I'm a firm believer that affiliate marketing is now becoming a standalone digital medium, like SEO, like pay-per-click, like advertising, like all of these other digital mediums that have had a lot of attention, whereas affiliate marketing has just quietly always been sort of siphoned off onto the side. I think brands can no longer really do that. It needs to be part of the overall digital strategy and marketing mix. And that's kind of how we're training affiliate managers at the moment, is to understand where does the affiliate channel fit within the bigger acquisition mix and how do you augment what you do in the affiliate side with whatever else your company is doing in all the other digital channels to acquire. So I'm a big believer that we're going through a really good change in our space. You know, it's taken us two decades to get here. Um, but the next generation of digital marketers need to be learning the historical background of how we've got to where we are today in order to move forward in a more structured manner. You know, it's not the Wild West anymore.

SPEAKER_01 25:27

No, for right.

SPEAKER_02 25:28

So I would like to thank you so much for joining me on this podcast. I've been dying to have the two of you together for ages. So I really appreciate you joining me today and really looking forward to seeing you guys at live events again soon.

SPEAKER_01 25:39

Yeah, fingers crossed. I'm excited.

SPEAKER_02 25:43

Thanks for sharing your time and your expertise with us today here on Affiliate Insider.

SPEAKER_00 25:47

Thanks, guys.

SPEAKER_02 25:48

This podcast is sponsored by OneAccount. Oneaccount offers a free, real-time age verification solution for affiliates and helps to ensure audience compliance in highly regulated markets. The process is super simple for players who need to age verify to access free-to-play games, and the tool integrates seamlessly into your existing affiliate site. To find out more and get started with one account in your affiliate business, visit www.oneaccount.net forward slash business.