Video interview with CAP's Warren Jolly

Jeff: We’re here with Warren Jolly, CEO of Affiliate Media and the founder of Casino Affiliate Programs. We’re going to talk to him about some of the things going at CAP right now. Warren, could you introduce yourself to everybody and tell us about how you landed in iGaming?

Warren: Sure. It’s great to be here. Obviously, I’m Warren and I’m one of the co-founders of CAP actually. CAP was founded in 2000, by actually a gentleman called Louis Fabiano. I got involved in the business in 2002. I started in the business as an affiliate, worked primarily for casinos back in 1999. At the time, actually I was an affiliate in other verticals as well, but I moved into gaming just because, as we all know, it’s extremely lucrative.

Back in those days, it was the wild, wild west. Operators were paying affiliates $0.60 per click. That’s what really attracted me to the business, where in other verticals it was still very difficult to earn those kinds of returns. So I moved into gaming because of the money potential. But really we started CAP and got involved in CAP because, as I said earlier, it really was the wild, wild west. There was no legitimate way to figure out which operators to work with, who was going to pay you, or who was really tracking your statistics properly. CAP was really created for that.

Jeff: Tell me a little bit more about where you got that idea to create CAP. Was there one moment where you looked at another site, or you just had a moment where you thought this is the way to solve this problem for affiliates?

Warren: With CAP, there wasn’t really another website that I would say we looked at. What really happened was we were just looking at the way people were communicating at the time. The forums were really popular. I don’t know that there’s one specific example per se, but back in the early 2000s, everyone would congregate around forums to discuss a variety of issues. We just figured that affiliates need to help other affiliates, we need to stand together, and there needs to be a way to keep everyone in the know. We just chose the forum model as that. Really, it was the quickest way for people to exchange information and again let other affiliates know about who’s good and who’s bad in the industry.

Jeff: What was the biggest learning you had along the way as you’re coming up with the idea for the site, getting it built, and just getting it out there and trying to get a good audience? What did you get too far along the way before you said, “Okay, I’ve got to regroup and go in another direction”?

Warren: As far as learning, when we’re all sitting behind the computer every day, working eight hours a day in front of this monitor, the key thing that I think we always miss or forget is the importance of just human communication. For us, it was doing whatever we could to go out and talk to affiliates, talk to people in the space, and just figure out what are the true pain points. It sounds really simple and archaic, but for many affiliate marketers, they just put their heads down, build a website, do keyword research, do niche research, build content, and wait for the traffic to come. Yes, it does happen if you do the right things. But again, you can make so many mistakes along the way. If you just do simple things like an email survey, like something we did today that many of you probably saw, or just go to events and meet people face to face, understand where the real challenge is and build products around those to solve those challenges, that approach has always served us well.

As far as something that we’ve done that we got really deep into and we decided it really wasn’t a good thing, back in 2007, we decided to build our own social network called MyCAP. We spent a bunch of money and a bunch of time doing it. We just realized with Facebook, at the time, it just makes no sense. Audiences don’t want multiple social networks and especially not for a niche website. Any affiliates out there who are thinking about building a social network, I would advise you to really think through that decision before you do it.

Jeff: During the launch of CAP and during those first few months, when did you know that this was going to work? When did you start getting great feedback and good traffic? When did you have that feeling? What happened and how did that affect the future?

Warren: I sort of knew first-hand that CAP was going to be successful. The reason for that was, prior to getting involved with CAP in 2002, I was involved in running an affiliate network on behalf 888. CAP was supplying 80% of our active affiliates. I really saw the potential in CAP and the search engine rankings that it held, and just the targeted affiliate traffic that was coming through, we knew that those affiliates wanted better information, different degrees of engagement, and just the right access to both other affiliates and operators. I would say that I had some prior knowledge before really getting involved in building the business. Beyond that, as I really took the initiative to build the site and take it to the next level, we just found that, again, the level of engagement on the website from users commenting in the forums, the conversations we were having with them, we just knew that we were on the right track and that affiliates were really finding value in what we were publishing.

Jeff: How did that make you feel? As an entrepreneur, how did all of that click? When did the team working on things at the beginning really start to feel good about what everybody was doing, particularly the founders?

Warren: I think it probably took us a few years actually. I would say two to three years to really get our bearings straight. I was relatively young at the time. I think I was 21 or 22 maybe max. For me, I didn’t really have the experience. I’d never held a corporate job in my life. I had to learn a lot along the way. It definitely took me longer than most. I guess you could say that. Maybe not. I think things started to take off in 2005, 2006 for the company. We hired our first employee in 2006. That’s when things really started to fly.

Jeff: A couple years, that’s a long time to keep energy up. Everybody is so focused on what’s going to happen this year and in the next couple quarters. How did you keep your interest and energy level up to spend so much time and invested in the sites?

Warren: I’ve always been really passionate about affiliate marketing, technology, the Internet, and how things have changed. That passion I guess is what just kept me moving forward and pushing through. I think that for any affiliate today, especially today, my advice to them would be don’t get in the business if you can’t wait out that type of time period, at least 18 months. To build a high quality website, to get a great product together, to start building an audience, it just doesn’t happen over night especially in a competitive vertical such as ours. If you’re passionate about it, if you know you can make it happen, that’s the key element required.

Jeff: When you started understanding that CAP was really taking off and you hired your first employee, what did you have to start doing differently?

Warren: That’s a great question. I think changing from an affiliate to a business, a proper corporate business, is a big shift for many people. I think that was the shift for me. From being able to work from your home at odd hours and do whatever you feel like to having a structured company where there are goals, responsibilities, you clearly lay out duties, for me it was almost like being responsible for a family of sorts. You need to make sure that things are successful because you have people relying on your for their own well being. It’s just a shift in thinking and psychology. When you start to build a corporation like that, there’s a lot more structure and a lot more discipline is required. But obviously, the benefit and the plus side is you can only do so much as yourself, as a one-man band type of affiliate, where it’s good to have people that can help provide leverage to the overall initiative.

Jeff: How did you find yourself learning and growing and adapting, particularly as more and more affiliates started to come to the site? How did the team start to adapt the services that were being offered and start to expand the services?

Warren: As far as learning and growing, again relating back to my earlier comment, just being out there, just talking to people, and obviously studying what other businesses were doing, other websites such as ours, other industries, other verticals, seeing what users were reacting to. The Internet is a very dynamic space, if you will, and things change very, very quickly. Again, making sure that you stay up to date on trends and ensure you’re not going to become outdated as a business is really important. Learning and growing was definitely a part of that. Also I tried to hire people that were much smarter than I am. I know that a lot of entrepreneurs say that, but I truly know what I’m good at and I know what I’m not good at. The areas that I’m not good at, I really try to find people who are the opposites of me in those areas that can make things work. Surrounding yourself with really smart people has always served me really well in that capacity.

Jeff: To fast forward to today, CAP is the largest master affiliate in iGaming. That’s a great business model for affiliates to use to make money. How would you advise them to go about doing that?

Warren: I think many affiliates underestimate the earning potential of being a master affiliate. I was an affiliate initially in this industry for many years before starting CAP and moving to this vertical. I think really we all know other affiliates or we know people who want to do what we do. Who doesn’t want to be able to set their own hours and work anywhere in the world? That’s appealing for a lot of people. If you’re an affiliate, whether you’re small, medium, or large, chances are people you know are very interested in doing the same thing.

What I would say is there are a lot of affiliate programs that you already probably work with that have a sub-affiliate program or a component inside them. Get familiar with that. Talk to your affiliate manager. Say, “Can I make money by referring other affiliates to you?” Generally, they’ll pay anywhere from 5% to 15% of the lifetime commissions that those affiliates earn. It can be really lucrative. If you run a portal, you can create a webmaster section on there and list all the links and banners to various the sub-affiliate programs that you already work with. It’s just a component of those operators that already exists. It’s a great way to make money without having to do the hard work of driving the customers. Again, you’re going to have to educate the affiliates. You are going to have to tell them who are the right programs. But it’s a good way to complement your existing revenue stream.

Jeff: To change gears a little bit, tell me a little about your favorite website and how that’s influenced some of the changes we’ve seen on CAP over the past few weeks.

Warren: One of my favorite websites is TechCrunch.com. For those of you who are in the U.S., you’re probably familiar with it. I don’t know how popular TechCrunch is outside of the U.S. I know they’ve got a European site. The reason why I like it is, as I said earlier, we started out as really a forum. Over the past few years, users have shown that forums are starting to dwindle in interest, and users are really starting to move toward sites such as TechCrunch that allow for social commenting. The ability to publish content in a timely fashion and let users come in and interact with that content and each other has proven to be the new trend. TechCrunch is a site that, again, keeps you up to date on all of the trends in technology. The content quality is very, very high. They have a diverse set of contributors. The site makes it very easy for users to comment and get involved and participate in the conversation.

For CAP, as we surveyed our users and as we talked to our users at events, we really learned that that’s what people in the iGaming affiliate industry want, high quality information and a different type of social conversation. I would say for the future of CAP, we’re going to continue down that path, make sure we focus on really high quality content, get the best subject matter experts out there involved, and, again, drive that social conversation.

Jeff: To talk about the industry a little, we’re recording this the Monday after last week’s events. Last Friday was the day when the FBI seized three major poker sites. Talk a little about the state of the industry right now and what you like best about it and what drives you crazy about the iGaming business.

Warren: It’s a very opportune time. That Friday has been coined Black Friday officially, which is interesting. I guess I’ll start with what I like about the industry. Obviously, the thing I really like about the industry is how dynamic it is. Things are always changing. There’s always something new around the corner. There’s always a surprise or challenge to deal with, which is exciting in many ways. That really tends to keep us on our toes.

What I don’t like about the industry is, again, the lack of regulation and understanding that some of these government bodies have. If the U.S. government would just understand that there are billions of dollars in tax revenue here and that this whole situation of online gambling is no different than prohibition of alcohol in the 1930s which really didn’t work. If people are going to want to gamble, they’re going to find a way. There are going to be people in the world that will service that audience no matter what.

In fact, today we got approached by more operators than I can ever remember, just today, in a single day, that are interested in talking to affiliates because they’re now going to be shifting their businesses toward the U.S. where in the past they were not. With every door closed is a door opened. I think a lot of operators that were not thinking about the U.S. space previously are now going to jump in head first. Maybe they’ll do it differently. They won’t have articles about themselves going IPO like Poker Stars did. Their CEO won’t be a California resident [inaudible 16:31]. I think there are some lessons learned.

Lastly, I really believe that Friday’s events were due to just a bad case of revenge. There was this guy Daniel Tzvetkoff who ran a company called Intabill. He was doing processing for all the big poker. There was Poker Stars, Full Tilt, Absolute Poker, and UB. He then stopped paying them. They got really irked. He then showed up in Vegas at a payment conference where these various rooms knew he would be there. They tipped him off. Obviously that was that. When it came time for a plea bargain, he now flipped the table on them and basically provided all that information including the bank accounts, etc. I think this is an isolated case. I don’t think Black Friday would have occurred had this situation not occurred between these parties. Nevertheless, the good news is I think this is also a precursor to regulation in the U.S. I think that this had to happen before they would be able to fully regulate it.

Jeff: Given all that and where the business has been and where it is now, where do you see CAP going in the future?

Warren: I think for CAP, we’re really trying to revolutionize the iGaming affiliate industry. There are a lot of issues and topics that I think need to be covered in more depth. With CAP, I think we’re going to be leveraging more things like video, different types of content, and again really have a strong emphasis on how can we move the needle in terms of education in the space and really help affiliates that want to be successful on iGaming reach their goals in a much quicker fashion. For us, it’s really continuing the education and learnings in the space.

Jeff: Is there anything else you want to add?

Warren: No. I think as far as CAP goes, you can expect to have more interviews in this format. We’re just looking forward to helping the industry learn and grow.

Jeff: Great. Thanks a lot for your time today, Warren.

Warren: Thanks, Jeff.