Mathew Symonds has built a thriving affiliate business targeting sportsbook traffic in Africa. He gives us the lowdown on operating and marketing across the region.
Mathew Symonds’ Affiliate profile provides iGB Affiliate with the lowdown on operating and marketing across the region, including ongoing challenges around acquisition and conversion and the differences with more mature markets such as the UK.
You’ve been developing African (Kenya, Nigeria, Ghana, Tanzania, and others) affiliate traffic for 14 years now, with a focus on advertising local brands in the last two years. How did you get into these markets and how do you specifically cater for these bettors?We receive traffic from almost every country in the world, and have always attracted a lot of organic traffic from Africa without specifically targeting the region through SEO or paid search. When we started our websites we took the philosophy that we were going to produce good content and useful statistics that would help sports bettors – of the kind that we ourselves would use to analyse and determine our own bets – and secondly to keep them coming back to us each week for that information. We approach all developments on our websites from a user-led, customer perspective, and over time this strategy has worked really well for us. Take for example our popular stats sections at WinDrawWin.com that detail both teams to score data for more than 100 football leagues around the world. We have not chased SEO strategies and methods to try build traffic quickly and unsustainably. Our sites are also African-friendly in that we have always tried to keep our technology suited to some of the lowest common denominators when it comes to bandwidth, screen size, browser functionality and other factors that widen your customer reach.
In the past two years, our mobile traffic has risen from 50% to 80% in Nigeria. In Kenya our mobile traffic exceeds 90%, and for all Africa our websites average 82% mobile trafficWe try to not do anything that over-complicates our proposition. Users primarily visit our websites for upcoming football predictions, statistics and analysis, as well as the odds on those games, and we provide these in format that is easy to read and access on both desktop and mobile, in a format that people have become familiar with and rely on. Other websites do some very clever things that we do not, but our proposition has always remained focused and clear. We have tried not to become a “jack of all trades” and a master of none. Our view on being an affiliate is that player retention is one of the most important success factors above and beyond the number of registrations or number of depositors generated. Other affiliates might register thousands of players through various methods, but if you want to build a sustainable business as an affiliate and relationship with operators then you have to cater for, and refer players that are going to be retained and deliver higher value, especially if working on a revenue share model. Retention is also the responsibility of the affiliate, not just the operator. Because of our consistent proposition over the past 13 years, more than 80% of our traffic is return visits and we have some of the highest player lifetime values of any affiliate in the industry with some operators. This is due to the player loyalty we generate and the fact that our websites keep players playing, unlike lower player value that you might expect from a free bets website, a pay-per-click affiliate or other one-time referral type websites. In general we do not do much different to cater for the African market than we do for all of our visitors. The only things we might do differently is to geo-target very efficiently. All of our website technology, including our geo-targeting, has been built in-house, so we are largely unrestricted and unbound from the restraints that bought-in software solutions might introduce.
What are the key issues you have to deal with in terms of acquisition from the region?We have been an affiliate for 14 years now, and in the early days most operators were focused on now saturated key markets like the UK, Scandinavia, and other parts of Europe. Acquisition in Africa was therefore very difficult with mainstream European-facing operators, and still is due to a lack of interest in and understanding of African markets and the potential they offer. Regulation has also restricted most operators in pursuing business in Africa. For operators willing to target and accept African players, payment methods are one of the key enablers. If you are looking to acquire Kenyan traffic then you must offer the M-Pesa payment method. Until recently most European facing operators had probably never heard of M-Pesa. Mainstream European-facing operators also struggle to convert African players because they are bound by strict regulation in areas such as KYC, for example. Until recently many mainstream operators even blocked customers from countries like Nigeria because they saw the market as too high risk in terms of fraud. Acquisition with locally based African operators has proven relatively easier, and in recent years we have worked with brands in key African markets such as Kenya, Nigeria, Tanzania, and more recently Uganda, Ghana and Zambia. These operators have a number of advantages over mainstream brands competing for African traffic in that they understand local markets, provide betting in local currencies, and already have established brand awareness in those countries through land-based activities.
Outside of Kenya, where we generally expect conversion rates from registration to depositor of greater than 50%, this regularly falls to 10% or even lowerLocal operators also have the payment methods in place to facilitate player conversion, and more importantly mobile payment methods in place. Mobile growth has been exponential in Africa in recent years, so the ability to convert mobile traffic is key to the success of any African- facing operator. In the past two years, our mobile traffic has risen from 50% to 80% in Nigeria. In Kenya this exceeds 90%, and for all of Africa our websites average 82% mobile traffic. Many online operators have therefore almost bypassed developing for desktop in favour of efficient products that work on mobile, on limited bandwidth, and on limited feature mobile phones and browsers. There are however a number of acquisition challenges and obstacles when it comes to African traffic, whether converting through African operators or through more mainstream brands. Payment methods like M-Pesa work very well in countries like Kenya, and although there are some synonymous but less popular methods in other African countries, no other current payment method really performs anywhere close to M-Pesa when it comes to acquisition. From our experience it almost feels like mobile usage and the appetite for online betting in Africa has grown so fast that the operators have not been able to keep up. They have not been able to get products and payment methods in place that will efficiently convert the ever increasing number of mobile customers. Operators have also been slow to enter the affiliate market, although a number of African affiliate programs have been launched in recent months. Customer conversion from registration to depositor has been a challenge in most African countries we have worked in. Outside of Kenya, where we generally expect conversion rates from registration to depositor of greater than 50%, the general level of conversion is regularly 10% or even lower. There may be many reasons for this – customer trust in betting online and depositing money, customer understanding of how to deposit and bet online, the lack of free payment options in many countries (many payment methods charge per transaction), and perhaps the general acceptance and norm that betting is still a land-based activity. Despite poor conversion in many African countries, if you can acquire the volume of registrations to provide a significant active player base, then Africa is a lucrative market. It is however frustrating as an affiliate to see 90% of registrations in some countries not convert at the moment. However as an affiliate you can really only do your part in sending the registrations to operators. From there on it is largely up to the operator to complete the acquisition process.
What are the main differences with established markets such as the UK, and how do you address these?Operators always need to offer good value odds because no matter where you are in the world, a customer who is considering taking a risk on a bet will intrinsically assess the value of taking that risk (or not). Despite similarities between African and non-African markets, there are also a lot of differences. It is also hard to generalise Africa as a whole, because Africa is so diverse. For example, betting terminology varies between countries, and even within countries. What we might call an “acca” or “accumulator” in the UK, might be termed a “bet bundle” in Nigeria, a “multiple” in other countries, or something entirely different in a local dialect in Kenya.
African customers do not seem to need to be incentivised by headline, high-value bonusesPayment methods are largely different in most African countries than in established markets like the UK. As mentioned earlier, in Kenya the M-Pesa payment method is very commonly accepted and trusted (mobile penetration in Kenya is 90% yet less than half that section of the population even have bank accounts). In other countries players may be familiar with card transactions or bank transfers, whereas in the UK it is commonly accepted that every customer will have a debit or credit card that will facilitate their deposit. When marketing to Africa you have to understand how people transact, and what methods they trust and commonly use. You cannot just refer players to an operator without explaining how they can deposit and bet, unlike the UK where you can take it for granted that every referred customer is likely to have a debit or credit card or bank account. Player incentives in Africa are less common than in established markets like the UK, so at first sight it might seem difficult as an advertiser or affiliate to attract customers and convert them. However, because acquisition offers are not that common, nor high value where they do exist, African customers do not seem to need to be incentivised by headline, high-value bonuses. It is probably more important to an African player to understand that their money can be trusted online with an operator and that if they win they are going to be paid out in a timely manner. The way Africans bet, and the reasons why they bet, also appear to differ from established markets like the UK. In general Africans prefer small stakes bets on large multiples that might return very high winnings. It is not uncommon to see 20-fold multiple bets or more, as customers seek to hit a massive life changing return from a small stake. Many African operators therefore promote their own “jackpot” games whereby for a small stake the customer can predict the outcomes of a number of games and potentially win a massive amount of money, not too dissimilar to the football pools that were very popular in the United Kingdom in the 1980s (and still exist). Because of the nature of small stakes-high odds betting, the margins in Africa are very good. Profit margins greater than 25% are not unheard of. In established markets like the UK, most operators are working on sportsbook margins of less than 10% due to how competitive they need to be in setting odds and providing big headline acquisition offers that will attract customers in an increasingly saturated market.
How do you see the outlook for affiliates and the wider sector in the African region?The outlook for both operators and affiliates in Africa can be seen two ways. On the face of it Africa is a very lucrative and untapped market when it comes to online betting, hence the number of operators emerging in countries like Kenya and Nigeria in recent months. However, with growth in any industry comes regulation and attention of governments and authorities. Regulation could make operating in some African countries unsustainable for a lot of operators and has already done so in some due to unsustainable taxes being levied on betting activities.
Because of the nature of small stakes-high odds betting in Africa, profit margins of greater than 25% are not unheard ofAfrica needs to remain open for business when it comes to online gaming if it is to succeed. Conversion will continue to be poor until operators can find local payment methods that work for their customers. It is not just about finding the right payment methods that work. Agreeing commercial deals with the right payment providers and getting these payment methods in place can be a long, bureaucratic and sometimes expensive process. That said, if operators in areas like Nigeria can solve the issues around payments methods, then this will make the large untapped volume of registrations that today are going unconverted more accessible. Competition will also shape the future of many African markets. The number of online operators in Kenya for example has rocketed in the past 12 months, and mainstay operators like Sportpesa may increasingly find their market share threatened by new operators, many of which are growing their market share via their own affiliate programs. Competition may also come from some of the big European brands entering the African market in a serious way. Some of these brands have always accepted African players, but if they make a concerted effort to target African players through the addition of local payment methods and betting in local currencies then this will further erode the market shares of local operators. Africa is an exciting prospect, but as with all emerging markets only time will tell whether positive change will help this market grow, or whether negative changes will cause it to stagnate and become less lucrative.