LiAC: Day 1 round-up
Josephine Watson rounds up the conference highlights of day one from the Lisbon Affiliate Conference, including the current state of play in the Portuguese affiliate market, the latest developments in influencer marketing and the outlook for sector M&A in 2019
Portugal ripe for affiliate growth
Kicking off the day with a presentation on Portuguese affiliate marketing, Tiago Almeida (pictured), CEO of Lisbon-based consultancy egamingservices.com, saw great opportunities as the country recovers from its recent financial difficulties.
The average cost per acquisition (CPA) is currently around €60 according to Almeida, and while he recognised other European markets have more competitive rates, he believes the opportunity ahead lies in the stable regulatory landscape.
With a new 25% flat rate tax for all products being developed as part of the government’s Budget plans for Fiscal 2019, he said: “The basic rules of the game are not going to change any time soon, so it’s an investment where you will see returns and break even.”
The market isn’t however without risks for affiliates. Almeida warned against working with brands still using .com addresses in Portugal, citing statistics and personal experience of brands not paying up.
A major benefit of tapping into the Portuguese market identified by Almeida is how it can potentially open doors to other Portuguese-speaking countries.
Primary concerns here are legality and taxation, but Almeida explained it’s a win-win: “The current tax model doesn’t compensate (for international players) because the operator is paying tax based on turnover, and they’re not obligated to offer foreign traffic [under] Portuguese licences.”
When asked about the challenges of having only eight major brands in legal operation in Portugal, Almeida had a positive outlook for the affiliate market: “What is curious about the Portuguese market is that there is space for everyone.
“The number of active players is still less than one million, and we’re talking about a country that we know was very active in the .com market, so the potential is far higher.
“Under the new tax model, more new operators will come in with very aggressive odds and bonuses.”
Social media taking charge
A panel in Room 2 provided further expert insights into the latest advances in social media through the lens of influencer marketing.
Yitian Chen, MD at Helium Holdings, opened proceedings by explaining how influencers provided much more flexibility than traditional marketing channels.
Tiz Gambacorta, co-founder of 8020research.com explained that the crucial way to unlock return of investment on these influencers is to go beyond simple endorsements with “wealthy, deep marketing strategy that relates to our target audiences’ core values.” By presenting a solution to audience needs and desires rather than just a product, the panel agreed this form of creative marketing is the way forward.
Expanding upon this, Andre Root, CEO at Avantgarde Capital Partners said broadening beyond core audiences and influencers is crucial to a successful campaign. For instance, capturing a young, materialistic male audience with lifestyle or rap artist influencers.
Chen and her fellow panellists felt that while Facebook had previously proven effective, Facebook’s tightening of its advertising guidelines and the growing momentum on Instagram had positioned the latter as the new front-runner for igaming influencer marketing.
The future for M&A
After a somewhat hectic H1 for M&A, the expert panel rounded up day one confirming a continued positive outlook for the market following a successful summer.
In the face of new regulations shaping the industry, Michal Kopec, head of M&A at Better Collective said: “We’re not stopping with acquisitions, but we need to be more careful and prepare properly for that.”
Marcus Teilman, President and CEO at NET Gaming Europe AB, sees sustainability as the solution for companies preparing for acquisition in this new, more regulated M&A landscape.
“Be your own business in a sustainable way, and that goes back to GDPR compliance, but also how you generate your traffic – don’t be too aggressive with your SEO, for example”, he said.
Throughout the panel, the underlying focus was on preparedness in the face of all M&A challenges, especially when it came to due diligence processes.
David Levy, head of M&A at XLMedia, explained that in his experience, the ideal process takes 30-45 days from start to end, depending on how well-prepared all parties are.
Most important in M&A processes, however, is trust, which can prove difficult for largely unprotected affiliates.
However, Levy said: “When we go into a due diligence process, we have every intention of buying a site because we don’t want to waste resources, so we’re generally closing out 85-90% of M&A deal processes.”