Our job is to actively listen to the market and act on it, said Marcos Oliveira, CCO at Clever Advertising – a ‘lean’ performance media agency with a balanced business model helping sportsbook and casino operators to identify the best affiliate sites to maximise their media investment, including for emerging markets across the CIS region.
SBC: First of all, can you just give a bit of background on Clever Advertising? How would you best describe what you do for the gambling industry?
MO: Clever Advertising is a performance media agency that has been helping clients with their acquisition endeavours for the last decade.
We offer a media buying service with an affiliate revenue model. It is an amazing model. Our clients get a plethora of services whilst minimising their associated risk and improving their acquisition channel.
It is a balanced model as we support all the media investment in return of a revenue share of the customers that we drive through our partners platforms.
SBC: Okay let’s look further into the business model. How do you hone in on the best markets? And how are you different from the typical gambling affiliate?
MO: It would be easy to say the best markets are the ones that are regulated and have strong sports culture, but we try not to categorise the markets that way as each one has its particularities, and they are in a forever-changing mode. Some are incredible markets regarding player value, others for the quantity of players. Some for sports, others for casino.
But that is exactly our job and our strength: to actively listen to the market and act on it.
Most affiliates rely on their content assets to supply the demand for new players. We work the markets, buying media whenever there is a need for a specific brand and their specific needs – the reason why we only work with a restricted number of clients per market as we rather focus on quality then quantity.
Our main strength is the ability to shift our media buying efforts in a seamless way. We can move from type of traffic, market and campaign goals in a matter of days.
Let’s just say that our main difference is our lean media buying performance method combined with the affiliate revenue model.
SBC: Before we get to specific operators, how much research has to be done around advertising rules, bonus restrictions to be aware of, licensing criteria etc.?
MO: That is where Clever spends 80% of its attention. To shift and move as lean as we do without proper knowledge of the markets, regulations and consumer behaviour would simply be impossible.
Our legal department plays a key role and they spend a tremendous amount of time on this because media buying is not like an SEO business. We must be sure that all the legal parameters of the market are in place. Are we allowed to do it? Do we need certification? Are the websites compliant? Are the owners legitimate? Is the content legal?
We need this part to be undoubtedly clear to maintain our media buying efforts on point.
Just to give you an example, Clever re-enforced its media buying teams with 70 new employees in the last six months, reaching a whopping number of 150 people dedicated solely to media buying.
Of course, the media buyers need to be fed with relevant information to perform well, and we do it not only through our legal department but through the other departments like the data and tech lab, centre analyses, business intelligence, compliance and market development. These teams convey their information to the media buying team.
It could sound as being an intense and almost herculean task, but it is our culture and it works.
SBC: You’ve identified your target country and done the necessary research about the market. What do you then need to know about prospective partners?
MO: That is our markets department task. Their job is to understand and clarify what operators are working in that market, and how they are acting and behaving. In the likes of legal, it is important to verify if the operator is legal, compliant, solvent and socially responsible.
It is also extremely important to work with operators that act for the long haul and have a footprint in the market – and that can be seen through the marketing efforts of the operators. No operator that is set to be in the market for no longer than a year will be sponsoring a football team.
SBC: You mentioned right at the start that 99% of your deals are on a revenue share basis. Can you just explain to our readers what this means?
MO: Sure! Normally, any media agency tries to balance the investment through a fee or CPA plus a revenue share. We do not. We take a calculated risk of working solely on revenue share and we do not shy away from the negative carry-over. Why, you may ask – because we are confident in our media buying methods and we see our clients as long-term partners – as if we were a team of their own.
We understand the acquisition risks and we accept it with the expectation of a lifetime relationship, and it is not difficult to achieve it because this model is a win-win situation. If we bring customers in, we both win. If we do not acquire customers, we both lose (Clever loses media investment and the operator the acquisition momentum) and the partnership is not fit for any party.
High exposure, high impact formats, high performance, and upfront investment from us historically means a high revenue share and lifetime relation from our clients.
Balance. It is all about balance.
SBC: Let’s say you’ve now got your target market, your legal understanding of the market, your preferred partners are on board and the revenue share is agreed. What is the typical deal length you’re aiming at?
MO: Well, if we both performed as expected none of us will ever stop working together, will we now? Unless laws and regulations are the basis for the partnership interruption (German market i.e.), there is no rhyme nor reason to justify such a decision. And that is why we work for so long with the same partners. And allow me to add that it has been easier to expand to new markets with our partners than to interrupt the existing partnerships.
SBC: Okay let’s talk more specifically about key CIS markets. I know you have had a big presence in Russia – what is the situation there for companies such as yours?
MO: Russia has had three big moments in its acquisition history. The moment of regulation; The KYC moment; and KYC Tech improvement moment.
During the first moment, we had great performance as we tend to have with regulated markets. The second moment was not good for us, as the KYC of the players was not friendly (once the customer registered online, he had to go to a physical place, to a kiosk i.e, to be identified and validated).
The third moment is mapped by the great technological progress, where you can now do KYC on the website, which the operator can validate with the authorities. With this development, we are back on track with our performance.
The only less attractive situation about Russian regulation is that it is not allowed to play online casino, only sports betting and that impacts all media and affiliates companies. For us, that is not a problem because we are a media buyer with a strong sports betting demographic, but of course, it is always better to offer more than one product to our audience.
SBC: Russia is one of many countries going through regulatory changes for gambling; are media buyers more flexible to such changes than website owners?
MO: I would like to say yes but it is not a black and white answer. Our business has pros and cons, obviously, but so do SEO businesses. On one hand, SEO business is hugely exposed to third party changes – like search engines – and regulatory changes that can result in a ban for price comparison websites. But on the other hand, businesses like ours can see the regulator forbidding mass advertising – like Spain.
Clever Advertising is known for its compliance so if advertising is banned, we have no choice but to leave the market. For sure, as media buyers, we have the flexibility of entering and desisting a market in a seamless way and that is an exquisite advantage.
SBC: What do you make of the advertising crackdown in the likes of Spain?
MO: I do not think it is a good move from the regulator as it only exacerbates non-regulated gambling. I am completely against non-regulated gambling. If a country has regulation, they should go for player protection and not advertisement restrictions that tend to be ineffective.
Limiting deposits, centralised self-exclusion lists – these are the sort of things that a regulator should be focusing on so if the player has a problem all the tools are available to stop them playing. That is something I can stand behind 100%.
All the strategies implemented forbidding advertising end up as being an invitation to launching non-regulated operators. You can see it in Spain, you have seen it in Italy – a country which is a great example of what not to do.
We have to see what the impact will be in Spain, but advertising spots previously occupied by regulated brands are now polluted with non-regulated brands, which of course means less player protection
SBC: Just picking up again on the topic of regulation. I understand you are very ‘pro’ regulation, but as more countries regulate how do you approach media buying in the biggest non-regulated markets?
MO: If our compliance and legal teams tell us that we have grounds to be there, we will be there, but that must be cleared first. The best example that you can have of this is always Brazil – a non-regulated country with one of the biggest investments in the last two years.
There are still no laws in place, but there are millions of euros and dollars pouring into TV rights, LED advertising. I think there is no team in either the first or second division not sponsored by a gambling operator.
But also, let’s look at regulation for affiliates, we have it for New Jersey and looking at the rest of the country, we are licensed in Romania and we applied for a licence to operate in the Greek market. If there is a country that needs affiliates to be regulated, we will be regulated. We have no problem with that. I am super pro regulation as it only helps our business.
SBC: And let’s go back to the CIS markets to finish. We’ve mentioned your history in Russia, but what about other ‘hot’ markets? Where have you got your eye on?
MO: Everyone is talking about Ukraine, it is the new big thing. We truly expect Ukraine to become one of the biggest European markets to be on top of but I’m also very excited about all the ‘Stans’. So, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan – countries that most of us even have difficulty to find on a map.
In the last few years, the market is looking west but the east – especially the old eastern market – is a sight for sore eyes where gambling is concerned.