White Label: Pros,Cons and Rationale for Affiliates
Published 11th May 2016
Over the last year, I’ve made the transition from SEO guy to white-label operator. Last year I started my own white-label casino. And my SEO agency? Well, it’s been very successful because I passed the day-to-day running to someone far more capable than me, my CEO Aferdita Pacrami. I realised my great strength is building new businesses and teams to support them. For many years whilst working in Betfair, subsequently Unibet and then within my own agency I constantly felt that ‘I could do iGaming better’. I started out with a standard white-label solution from SoftSwiss (a great white-label provider by the way) and over time we’ve built ‘Tyche Core’ and ‘Tyche Frontend’ , which sort out a whole number of issues around ‘same as’ front-end iGaming experiences. Philosophically, my whole team and I look at e-commerce rather than iGaming for inspiration.
The rich, lazy world of iGaming
My CTO Tom Finlayson pointed out that in e-commerce:
- A good idea makes you $1m
- A bad idea loses you $1m Whilst in iGaming:
- A bad idea makes you $1m
- A good idea makes you $10m
Of course, in iGaming the numbers are far bigger. So why are iGaming brands are often successful despite themselves? It’s because people are desperate to gamble and gambling online is far easier than going to a land-based casino somewhere. In an industry where around 12% of all gambling is online, we have a huge amount of headroom. And that’s not even accounting for a gradual softening of social acceptance for gambling in general. So, I want to share my journey as an affiliate/agency guy turned white-label operator and the journey from there. Hopefully, if you like what you read, I’ll be asked to come back and let you know more over the forthcoming issues of iGB Affiliate. I decided to kick off with online casino, because based on my research and experience, it’s where the money is in terms of average revenue per customer and it’s where there’s been the least progress in improving consumer experience.
What about you?
Before you say ‘yes’ to white label…Are you the right person for white label? It’s important to understand what you are like as a person in this context. If you’re only interested in focusing on a narrow skill-set, avoiding hassle and the huge responsibility of building out a broad team, being a regular affiliate is actually a great way to go. But, if you’re like me and you’re OK with the complexity of building a brand and deep down you believe you can do iGaming in a better way, then read on.
There isn’t a middle ground
In my opinion, you’re either in it to find a true competitive advantage, or not. That’s because in order to make a white label work, there has to be some kind of competitive advantage over others. The advantage could be the way your brand communicates with people, your knowledge of SEO that can help with rankings, picking a profitable segment of the market, the technology you employ, and so on. But whatever your special thing is, it’s really important you understand how to employ that with your own white-label brand. Just taking on a white label product, changing the logo and hoping users will be attracted to your casino (which is exactly the same as another 20 casinos) really won’t be good enough.
We all have our own mental picture of the Great War of 1914–1918. Mine is of mud, corpses, trenches and not much progress. iGaming marketing in general has reduced to this. Why? Because in my opinion, one iGaming operator is pretty much like another. Some differentiate because of more brand awareness, a football sponsorship, some kind of interesting creative. But deep down they are all the same. When everything is at a stalemate, you end up with trench warfare, where operators fight for inches of advancement.
What’s your blitzkrieg?
The Germans realised trench warfare was a path to stalemate. Within iGaming marketing, if you take on a white label, what’s your big win going to be? This is important, because as an affiliate you have some things in your favour and many things not. Let’s assume you’ve done OK as an affiliate, and have been around for at least five years and built up an investment fund. In your favour you know:
- how the Internet works
- how to rank on Google
- how to find a niche that is profitable
- which casinos are most profitable for you and why
- how to do things ‘economy’
- how to be agile
What you don’t have (probably):
- a huge pile of cash
- large amounts of data showing which games work and don’t
- technologists who can build your infrastructure
- How the Internet works
Let’s define what ‘how the Internet works’ means. Essentially, you will have been around the Internet for years and it’ll be like a second native language to you. You know what a good website looks like, you intuitively understand why people do things on the Internet. That’s why you’ll probably be pretty good on conversion-optimisation, for instance.
- How to rank on Google
In my opinion, starting with grey markets is the easiest place to begin. The only easy way to gain visibility in these places is to rank on Google. If you ranked for iGaming phrases as an affiliate, then you can rank your own casino.
- How to find a niche that is profitable
You’ll know from experience where the best places are to make money as an affiliate. Maybe you set up a site around PayPal casinos? Or perhaps some kind of ‘fruit machine’ site? Whatever it is, you’re pointing traffic at operators….that could be your casino.
- Which casinos are most profitable
Assuming you have been sending traffic for some time to various operators, you should have a good feel for who gets you the most revenue based on a mixture of volume of visitors and revenue. Therefore, you should be able to work out which operator resonates most with your traffic. Point your affiliate traffic at your own white label, emulating the look and feel of the successful site, and you’re getting somewhere.
- How to do things ‘economy’
This is huge. If you can produce more for less money, you need less money to compete. Simply, you can churn out the marketing more efficiently than the next person per pound spent. This area is a huge focus of mine and something I’ll get into in another article.
- Being truly agile
If I were to pick one core advantage you have over a big operator, it is agility. If you come across a big idea, by the time you’ve got it live and making you money, the big operators will have just started talking about it at conferences. I know this is true, because I’ve seen it.
What you (probably) don’t have
- A huge pile of cash
I assume you don’t have mountains of cash? Not being rich is a good thing in many ways. It means you care about how money is employed and so you don’t waste it. I’ve seen millions burned on ridiculous things within big iGaming brands…and nothing to show for it. When you have some money to work with, odds are you can be far more productive with your cash than others.
- Large amounts of data
OK, that is a competitive disadvantage, but that’s why I said it’s so important you’ve done your time within iGaming. You will have a feel for what works and what doesn’t. From my experience with big brands, they have massive amounts of data and insight, but the data can’t be used because there is no technology to employ it properly for customers. And the insight usually gets isolated within an insight team that doesn’t communicate particularly well with the rest of the business.
- Technologists who can build infrastructure
In my opinion, having really strong technologists to support your marketing knowledge is critical. Technology is what makes things happen. If you’ve got this far in your affiliate career, you know quite a lot about building marketing-friendly websites. You may even be familiar with technologies that allow you to do odds comparison or other sophisticated things. Huge brands have armies of technologists, but from what I can see, they sit on technology stacks which are highly complex and fragile. This leads to paralysis, because the wrong change in a piece of software could break the ‘money-making machine’. So whilst the brands talk a big fight about their amazing technology, the reality is it doesn’t manifest itself very well. If you’re smart enough to not make their mistakes, keep your technology stack agile and light, you can produce results within months that big brands would take years to do.
Should I/should I not?
I think if you’re smart with your marketing, you’ve got the knack of building up converting traffic and you really believe you can improve iGaming consumer experience, then white label makes sense. Ultimately it’s a gamble and you reduce your risk through your clear thinking, resources and competitive advantage. If you get into white label because you’re greedy and you just want to make more cash, stop now because you could spend that money on a nice Ferrari and save yourself a whole lot less stress. If you believe you can serve iGaming customers better in some way, then white label just becomes a rewarding journey to great fortune. In my next article, I’ll go into more specifics on numbers and who offers what.