Industry predictions for 2020 - including grey markets and collaborative affiliate programmes

Chris Welch, consultant

Chris Welch, consultant

The rise of the machines

Constant pressure of rising CPA costs and increased regulation will put even more pressure on customer lifetime values as operators increasingly shift from increasingly risky VIP customers to recreational ones in regulated markets. Trying to attract and retain these lower spending customers cost effectively will continue to be a challenge and operators will increasingly turn to the new wave of AI-powered technologies to drive efficiencies across the player journey from predictive modelling to real-time marketing, seeking to deliver the right message to the right player at the right time. Early adopters in this space will likely reap the rewards.

Grey looks good on you

Regulatory oversight will continue to become more prevalent in regulated markets with many governments also raising the tax burden. This will drive more operators and their affiliate partners to seek relief in the many grey markets that still exist in all parts of the globe. Japan, in particular, already an attractive market for online casinos, will see yet more operators competing for a piece of this lucrative but challenging market in 2020, with brands such as JPJ’s Vera&John driving more revenue from the east and many others playing catch-up. Some will make it while many in 2020 will be nursing their losses. To quote a famous Japanese saying: “Saru mo ki kara ochiru”(Even a monkey can fall from a tree) i.e nobody is perfect; even experts can make mistakes. Operators beware!

Fancy a Flutter

The biggest merger in online gambling history, Flutter and The Stars Group, will be approved in 2020 creating a true global giant of powerful brands across the UK, Australia and, most importantly, the US. My crystal ball predicts this mega-merger will suffer some initial birthing pains and maybe even a sell-off and 2020 may prove challenging. But the sheer breadth and scale of its reach, its brands and technologies, not to mention its stellar management teams, will ensure this giant will in the end be a winner, if it executes it with excellence. While there is no such thing as a guaranteed winner, I confidently predict that this Flutter will pay off, maybe not next year but certainly in the years to come.

Martin Calvert, marketing director, ICS-digital

Martin Calvert, marketing director, ICS-digital

Surprising brands will target international markets

In a consolidating market, many operators and affiliates will find it harder to maintain growth in their core markets. However, as the US, Latin America and Africa open up further and expand, I predict that an increasing number of companies who have previously focused on just a few territories will expand their operations to enter different global markets. We now work across 71 languages – and this has been entirely driven by client demand for content, translations and customer-facing content. The accelerated pace is significant. It’s clear that some big shifts are happening under the radar as betting brands change their market focus – and there will be some surprising moves in 2020.

Some major operators will waste money at unparalleled levels during Euro 2020

Major football tournaments are great opportunities to attract new betting audiences and reactivate lapsed players – but we’ve seen that during these ‘halo’ events, major operators are prone to wasting money as they rush to acquire players at any cost. Keep an eye on what some of the major operators do in Google Ads, programmatic and paid social media advertising and we predict you’ll see poor under-optimised customer journeys, over-bidding and wasted potential. Of course, there are clear opportunities for those with a critical and highly targeted approach to player acquisition – but costs will nevertheless be artificially inflated by the blind bidding of larger brands.

The best affiliate programmes will become more collaborative

Some relationships between operators and affiliates can feel unbalanced. In 2020 we predict that the most growth-focused affiliate managers will be working with their affiliate partners to help them to professionalise their marketing operations and increase traffic while staying on the right side of regulation. We’ve already experienced more direct requests from our operator clients to start conversations with and support their affiliate partners, and we anticipate that this trend will continue. As competition heats up and regulators become more muscular, we expect operators to be more proactive at supporting affiliates, and introducing them to trustworthy partners for digital marketing, technology, content, legal support and much more.