Big brands would be foolish not to utilize affiliate marketing. They can target their marketing dollars much better than they can with traditional media.
Internet only brands can do quite well competing against B&M brands. Just look at Walmart.Com vs. Amazon.Com this holiday season. Huge battle and Amazon gets most of my wife’s dollars…
Having a name like Harrah’s will be a big advantage, of course. But this is online gaming, and they need to attract online players, not 65 year old grandmas with a jar full of change. (No offense to any 65 year old grandmas who are internet savvy!) – If they want to compete for online gaming ad space, they’ll need to pony up a competitive offer.
Affiliate commissions are largely based on customer value, no matter what the industry. I’m willing to guess that the profit value for an online gaming customer is much higher than the profit value for a Walmart.Com shopper. See what I’m saying? The reason we get fat $300 CPA’s for a casino depositor is because their profit value is huge. Compare that to say, a Cabelas.com customer who might spend $300 on hunting gear, but after the cost of the merchandise and labor is factored in, there is not a lot of profit to share with an affiliate.
I digress (I need to get back to work!). I don’t doubt the big brands will try to pay less, but I think they will do so because their brand produces better conversion rates, and that gives them leverage. Affiliates are willing to take a smaller commission or CPA if the room converts extremely well. Full Tilt Poker is a good example. However, a $30 CPA would not get space on my site when another casino is offering $300 CPA’s, unless that $30 CPA site converts at least 10x better.
Finally, even if big brands didn’t want to do affiliate marketing and instead wanted to go with PPC or CPM, I’m guessing that PPC or CPM for casino/poker traffic would be quite high.
The idea that more competition for my ad space means the price will go down, does not make sense. Supply & Demand says otherwise. Again, things will change, but if you have casino/poker traffic, somebody is going to be interested in buying that traffic…