#4: The M&GB Formula

The previous essay focused on operators (which I hope you enjoyed), so I’m going to mix it up this week. Let’s talk about things from the perspective of affiliates. But with that said, I think this is relevant to everyone, and you’ll pick up something actionable.

So, this post is about using market research to spot uplifts. However, market research in iGaming is a vague term. Some say that iGaming market research is bullshit. And I agree, that’s why we started Blask (but that’s a story for another day).

One common source of information people within the industry love is the official reports from the regulator. They seem beautiful from the outside. But our friend Daniel (remember him) doesn’t agree, and I make him right:

So, what the hell do we do if we can’t even trust that source?

Well, let’s use our

Okay, I’m kidding—it's time to put on my serious hat.

Any metric within any niche can be inflated/wrong/not transparent. You have a varying confidence interval that you can use to support your assumptions.

In iGaming, you have a few good sources:

• Eilers and Krejcik: Amazing guys, I love them. They have really cool reports.

• H2GC: These guys have been on the block for a while.

Then there are the third-party tools:

• Semrush

• Similarweb

• SpyFu

• Statista

• Google Trends

• Ahrefs

• … and lots more (mainly starting with S)

But no matter which tools you use, I want you to leave this essay with principles that help you navigate this complex industry, spot the uplifts (trends), and use it to make money. Sound good? I hope so if you like money.

For illustrative purposes, I’m going to use the tool that I trust most, Blask. Not just because it's my tool but because it’s the one I have access to, and I trust the data more than anything else.

In particular, we’re going to use the Blask Index. You can use another tool, but to do so, you’ll need to find a way to estimate the market, its dynamics, the brands, etc.

The Blask Index illustrates the aggregated level of engagement and curiosity across all brands represented in the country. By synthesising various indicators, the metric provides a comprehensive view of trends and fluctuations within the entire market landscape. 

So let’s drive in:

The market in the image above serves as an example in our study. What can you see here? Take a few minutes to analyse the chart for yourself first, and I’ll provide my thinking below. But don’t cheat; force yourself to think deeply. After all, that’s why we’re here :) 

And now here’s my take on it:

1. You can see that the market has been struggling a bit.

2. The peak was a while ago at the end of 2018 - damn, almost 6 years ago (why does that feel like last week!?)

3. It was impacted by COVID, but not too bad, I guess.

4. The market is trending upwards. My data says 30% YoY.

So now let's ask a few more questions:

• How many brands are in the market?

• Is there a dedicated market leader with a dominant market share? I’ll explain why this is important.

So first, there are more than 50 brands, which is good. This shows that it’s an early-stage market.

Is there a market leader? Nope, which you can see in the image below:

But if you look closely, you’ll notice that the leader is bleeding its market share, even though the market is growing. This tells me two things:

1. The second and first strongest brands are fighting hard for market share

2. They’re investing in brand marketing because they’re growing, and the market is growing (and brand marketing is one of the most effective ways to make the market bigger).

So, guess what…

This is a perfect climate for affiliates to enter. When the market is growing and competitive, players are considering (BOOM!!) switching from one operator to another. So, I can promise you that the part of the funnel where affiliates operate is becoming very active with search queries.

I’ll summarise the example of a good market and how to spot it:

#1. The market is growing in size. I don’t have a clear benchmark of the metric yet, and if, for example, 10% is good enough or not. But I’ll say a few things here: Firstly, don’t look at MoM growth because you might be affected by the seasonality of the market, and most of them are seasonal. Secondly, use it as a benchmark against other markets to see which one has the most potential.

#2. There isn’t a market leader with 70% or a similar dominant number, which is still growing.

#3. The market has at least a few gambling verticals, casino/sports betting. Having one isn’t enough; yes, there are a few markets with just one.

#4. And last but not least, check the affiliate deal dynamics. The deals are a race to the bottom if the market is well-developed. (Read my essays about listing fees for more context). This is because brands are dominating, and they don’t want to pay affiliates anymore. They have thousands of cohorts, making them money. So please double-check whether you’re entering a market where the affiliate niche is decaying.

Now to further illustrate this point, let’s look at one more market with opposite dynamics, and I’ll let you go, I know this has been a reasonably long/heavy essay.

As you can see:

• The market has seasonality

• The trend is less than 10% YoY, so it isn’t growing very much.

And in this one:

• There’s a market leader with a significant and growing share.

• Competitors within the market are decaying.

This is a terrible market to enter. So, let’s give another one a try:

Wooooooooooosh! Say no more.

I think this is pretty obvious, right? Let’s dive in!

My Final Word

I hope this was useful. Look at the market trends. Spot the opportunities. Make the right decisions before investing in your business, and do so on data, not a gut feeling.

And here are some final thoughts to close this article, essay, what shall I call this damn thing?!

• If the brand is growing, but the market is not, it’s not a good sign. Players are redistributed from one operator to another. You might make some money, but it's probably not your best bet if you’re looking for a market with long-term potential.

• If a brand is investing significantly in brand marketing, it’s a good sign. This means an increase in the size of the niche and the market, and ultimately, lots of new players are generated.

• Always look into seasonality. Some markets have 1-2 months during the year when you can make 10x more money. Make sure you spot these trends and use them to generate revenue. For example: The IPL, EURO Championships, Superbowl. 

• Look out for brands with impressive, aggressive, stable growth. These are your best friends. Try to secure a juicy hybrid deal with them. The lesser their market share, the better. They will be investing more, and you’ll also help them gain market share.

Please share this with your friends and colleagues if you find it valuable. Send me feedback, and tell me your thoughts on this or any you want to see in the future.

I love you all, cheers.

P.S. Don’t be mad that I didn’t reveal the markets I used within the examples. It’s better to figure this out for yourself than copy the ones I’ve highlighted. I know that if I’d been transparent with this research, we’d have 100 new affiliate websites in these niches by tomorrow :)