Lottery affiliate marketing is a type of performance-based marketing in which a lottery rewards one or more affiliates for each player brought by the affiliate’s own marketing efforts. Affiliate marketing is used by lotteries and betting companies which also sell their games online (via mobile and internet).
Affiliate marketing is being used by many European lotteries and has been proven very successful in attracting new players and increasing the online sales. In the U.S., only four lottery jurisdictions (Georgia Lottery, Illinois, Kentucky and Michigan) currently offer their games on-line; none use affiliate marketing.
“As online gaming will be part of the future of most of the U.S. lotteries, it is critical to understand what affiliate marketing is and how it can benefit the lotteries selling online,” stated Vasia Bakalis, Marketing Director, INTRALOT, Inc. “It has been proven to be necessary for a successful online lottery.”
INTRALOT has a vast experience using with great success affiliate marketing for lotteries offering their games and/or sports betting online. INTRALOT has a specialized team for online marketing consisting of young talented marketers always ready to try new things.
Participants in the affiliate marketing ecosystem are typically known as “publishers” or “advertisers/merchants.” An advertiser/merchant is the provider of the offer. A publisher promotes the offer. A publisher can also be an advertiser— they are not mutually exclusive roles.
Lotteries/betting companies can host their own affiliate programs. “The relationship between affiliate and merchant is a symbiotic one,” she said. “Both affiliate and merchant benefit from having an affiliate partnership with each other. Most affiliate programs follow a revenue sharing or pay per sale model. A small proportion follows cost-per-action.”
Affiliate marketing has grown quickly since its inception. “One report points out that the worldwide affiliate marketing industry is worth $6.5 billion across sectors including retail, personal finance, gaming, gambling, travel, telecom, education, publishing, and forms of lead generation,” noted Bakalis.
A recent survey from the Rakuten-Linkshare affiliate network indicates that despite the well-publicized challenges, affiliate marketing spend is on the rise and is forecasted to keep pace with other areas of digital spend.
A Foresters researh study yielded five key findings:
• The affiliate channel produces new-to-file customers and generates incremental customer acquisitions.
• Online buyers within the affiliate channel are deal-driven and are more likely to buy a product they find merchandised or advertised on multiple websites
• The affiliate channel attracts consumers who spend more than the average online shopper and are profitable for advertisers
• Affiliate marketing helps trigger brand reconsideration and often closes the sale for online shoppers
• Promotions in the affiliate channel have a positive impact on advertiser’s brand reputation and loyalty.
Lottery/Betting Affiliate Programs usually pay either a Cost per Acquisition (CPA) and/or a Revenue Share percentage for each player introduced to them.
CPA is when a lottery/betting company pays a set sum for each player referred to them (such as $50 a referral).
Revenue Share is where the publishers get a percentage of the losses of each player that they introduce. This percentage is usually set somewhere between 25%-30%. It can be higher if they are making the lottery/betting company large amounts of money. With “revenue share” they get that commission for the lifetime of the player’s activity with that lottery/betting company.
Mechanism and Advantages: The affiliate programs usually provide all manner of text links and animated banners to help advertise the website and the odds/offers. Affiliates can promote the advertiser through several different ways: paid traffic (like AdWords), a YouTube video of the product and link to it with the affiliate ID, email blast, blog posts, comparison sites and others.
• Pay only for results.
• For the lotteries offering ilottery (online sales), with the affiliate program setup, they can offer their games to a much larger market cost effectively. The lotteries can get more potential players without having to increase their marketing budget.
• Even if a sale is not made, inbound links will increase the number of visitors to the lottery’s web site when it has an affiliate program. The links also act as a great way of increasing brand recognition. When combined with a range of marketing techniques, affiliate marketing enables a lottery to expand its reach.
• Like other types of internet marketing strategies, such as email marketing and website creation, one of the greatest benefits to doing affiliate marketing is the fact that it can be tracked. “Affiliate programs often allow you to see certain things like click-through rates or views of your site as a result of a player having viewed an affiliate web page,” said Bakalis.
• Affiliates may be better at creating copy and reaching segments.
“There are five things a lottery needs to consider introducing an Affiliate Program. 1) Look at the lottery’s current audience; 2) Define how to market the affiliate program; 3) Understand how to drive traffic; 4) Announce the program; and, 5) Measure the results,” said Bakalis.
Even if a lottery has great games— if they are not properly advertised and promoted to the appropriate target group—they will not reach their full potentiality. “Offering great games through different channels means marketing/advertising the games by using different methods and techniques for each channel,” stressed Bakalis.