Join Transform 2021 for the most important themes in enterprise AI & Data. Learn more.
The world of affiliate marketing offers diverse ways to make money online. Whether through email marketing, social media sponsorships, website banners, or by creating unique content, there are plenty of options. What matters the most is understanding the niche market you want to enter and knowing who your audience and competition is. In an effort to enter every major market, affiliate marketing has been increasingly looking to online gaming; a new, rapidly developing world
Everything suggests that’s a bet on the right horse. The game industry is booming, expected to make $152 billion worldwide in 2019. A 10.7% year-on-year increase makes experts optimistic enough to estimate that the whole industry could generate over $143 billion by 2020. Online gaming traditionally represents a large chunk of this revenue, generating billions of dollars annually. By design, it’s a field that encourages engagement and interaction, bringing advertisers lucrative opportunities waiting to be explored.
Let’s take a look at some of the ways how the online gaming industry brings opportunities for advertisers to use affiliate marketing.
It’s all about the audience
Applying affiliate marketing to the video game industry doesn’t work the same way as in other e-commerce setups. Yet although it’s a different business model, when done right it can bring great opportunities for affiliates to monetize their traffic or projects. It’s easy to see why most passionate gamers have fantasized about getting paid for what they do. No matter their specific activities, be it streaming, blogging or influencing, affiliate programs can direct them towards steady passive income, helping them fulfill those dreams.
Affiliates of any size can look to online gaming to offer simple ways to earn commissions, particularly when hitting the right target audiences. After all, the goal is not necessarily to catch them all – but rather to engage the right ones. This can be done via simple strategies, such as posting affiliate links in videos and descriptions, or by displaying unique affiliate promo codes during streams. For example, when promoting another game, a player can earn money by simply encouraging their audiences to carry out simple activities: register in a game, play it repeatedly, or complete a series of quests.
An example of a successful video game YouTuber is Swedish user PewDiePie, real name Felix Kjellberg – who topped Forbes’ top YouTube earner’s list with earnings of $12 million made through ads, endorsements, and affiliate links. The latter means that when he posts a YouTube video of himself playing with a specific headset, he supplies a direct link to that same headset via the advertiser’s website. Affiliates like PewDiePie make commissions based off clicks, traffic, and purchases made through their personalized link.
Twitch is another popular streaming platform for gamers that offers their own affiliate program. Through Twitch, affiliates can earn revenue from the sale of games or in-game items, as well as by accepting subscriptions from their viewers. As the program develops, they plan to introduce additional monetization tools for affiliates.
The video game industry offers diverse ways to engage with very specific audiences, which is why it’s no wonder that advertisers are attracted to these opportunities. Affiliate marketing in particular allows them to target niche segments of consumers, especially when looking to promote game-related products and services. The video game audience is by no means homogenous, therefore accessing high-quality traffic is priceless.
Therefore, if advertisers know whom they want to target, depending on the content and channels, affiliate marketing can help engage them in a reliable and relatively cheap way. It gives them permanent access to detailed statistics, protection from fraud, and the power to test and switch different traffic sources and segments.
But why exactly does affiliate marketing pair so well with online gaming? Well, it’s simple. In the world of online gaming — whether actually playing or viewing content, the end-users are entering an interactive mode, clicking, engaging, and chatting. Such an environment is a breeding ground for engagement, especially with relevant content. Whether playing their favorite game or watching a streamer on Twitch, users find themselves among mediums they trust, which makes them more likely to accept their recommendations. Imagine you are watching a streamer who got a brand-new ergonomic mouse. After watching them with it for hours, you might want to check it out yourself. And voilà, there’s a link just below the video, directing you effortlessly towards the e-shop.
Affiliates also get advantages. With the wide variety of affiliate programs, they no longer need to depend on one partner only. If they join an affiliate network, they don’t even need to sign a new contract with each game publisher. The network makes the management of both communication with advertisers and legal issues easier. Moreover, not only can they access steady and permanent income, but they can also negotiate more beneficial terms for themselves. By proving their results, they can shorten the hold time, which is the time period when advertisers assess the traffic quality to approve full-scaled collaboration.
Affiliate marketing has the power to bring data and systematization into such a potent environment. This is particularly important for game developers and other publishers, who work thoroughly on user acquisition and closely analyze new traffic sources. With automated features, advertisers can easily optimize their campaigns and get constant feedback from their traffic vendors, understanding what’s working and what is not in real-time. Additionally, by using an affiliate network, advertisers are not paying for clicks or views but for actual target activities done by real users, giving them tangible results and a simpler way to reach their ROI goals.
With this greater flexibility, advertisers can make their own referral programs to reward content creators and partners, drive new traffic in specific demographics with particular interests, choose the exact traffic types, geography, and pay-outs, and therefore have their finger on the pulse of their marketing efforts.
What’s on the horizon?
Any new industry comes with a learning curve, and the introduction of marketing partnerships for online gaming is no exception. Some companies have learned this lesson the hard way, experiencing intense backlash from press, viewers, and most notably the Federal Trade Commission (FTC). The entertainment giant Warner Brothers came heavily under fire for promoting one of its games through influencer collaborations that were not properly disclosed. High profile pages were receiving millions of views, and it had not been made obvious to viewers that these influencers were receiving payment for their sales. This prompted the FTC to create guidelines to confront the transparency issue that has plagued the industry.
The institution has been repeatedly carrying out similar transparency crackdowns. For example, in September 2016 the FTC charged the YouTube-based gaming network Machinima for paying two personalities to create promotional YouTube videos without disclosing the details and the promotional nature of the content. Despite these efforts, FTC guidelines have overall been attributed with little institutional enforcement due to limited resources. Whether publishers are unaware of the consequences or choose to ignore them consciously, the lamentable truth is that in gaming, only 21 out of 152 affiliates disclosed themselves on YouTube, making things increasingly difficult for regulation.
Undoubtedly, there is a lot of education to be done in order to hold some ethical standard. As companies and platforms normally cross out personas with bad reputations of influencer buying, the same standard should be applied to disclosure. But perhaps the most important step is to develop monitoring mechanisms, both manual and automated, to check hashtags, content, codes, and mentions, and flag any irregularities.
In addition to increased monitoring, we can expect to see the power of viewers and affiliates shape the industry by controlling decisions made by big companies. For example, when Nintendo first introduced its Creators Program offering profit sharing, it carried extremely strict conditions forcing YouTubers to jump through hoops if they wanted to show a Nintendo game in their video. After three rocky years facing criticism from YouTubers, Nintendo shut down its Creators Program and introduced a better functioning version that shared a fair portion of revenue.
Finally, as the video game industry grows, there is an increasingly attractive opportunity for a number of traffic sources and affiliates. However, the bottom line is that the quantity of high-quality traffic sources will also grow because new players will enter the industry, especially those who are well familiar with the world of games. These key players will have a better overview of which audience to target and how to catch their attention, providing an open opportunity to offer their products or convert them into new players.
With the rapid growth seen so far, it’s hard to imagine what the industry could look like in the next five-to-ten years. A few things to expect are likely increased monitoring mechanisms, improved collaboration between large companies and gamers, and overall more players entering the industry looking to cash in on the goldmine that is affiliate marketing.
Natalya Martynenko is the Head of Online Games Group, Advertiser’s Department at Admitad.
GamesBeatGamesBeat's creed when covering the game industry is "where passion meets business." What does this mean? We want to tell you how the news matters to you -- not just as a decision-maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn about the industry and enjoy engaging with it. How will you do that? Membership includes access to:
- Newsletters, such as DeanBeat
- The wonderful, educational, and fun speakers at our events
- Networking opportunities
- Special members-only interviews, chats, and "open office" events with GamesBeat staff
- Chatting with community members, GamesBeat staff, and other guests in our Discord
- And maybe even a fun prize or two
- Introductions to like-minded parties