The Business of Poker - Are you just a traditional poker affiliate or are you in the business of poker?

The Business of Poker for Affiliates

I was inspired to write this article after reading John Caldwells interview with Matt Savage.  Although not an affiliate, Matt is heavily involved in the "Business of Poker" in the offline world.  And that brings me to the question you should ask yourself,  Are you just a simple poker affiliate or are you actually in the business of poker?  So what exactly is "The Business of Poker"?  Many of us as poker affiliates think we understand the industry very well, but in reality there is a great deal that goes on behind the scenes that no one thinks about or even knows about for that matter.  It is easy to have tunnel vision as an affiliate and only see the the aspects of the business that directly affect us.

Some of things that take place every day in this industry are high level acquisition/merger meetings, conference calls with consultants, meetings with investors and business analysts, strategic planning, lobbying within different countries, and software design and implementation just to name a few.  In the greater scheme of things we as poker affiliates need to realize that the affiliate department is just a small aspect of the total business model for each site.  Don't get me wrong, I firmly believe the affiliate department is one of the most important roles of the overall marketing department.  However it is not the sole reason for success or failure of an individual site.  Look at PokerStars for example, they have over 80,000 players online right now and are steadily encroaching on becoming the largest poker site in the world.  In my opinion their affiliate program is no different than a refer a friend program.

The largest poker site in the world right now is none other than PartyPoker.com.  In 2005 it was valued at around $10 Billion USD when it went public.  Step back and think about that figure for a moment and compare it to some American based companies with that type of valuation.  In just the first half of 2005 PartyGaming generated revenues of $437.4 million and pre-tax profit of $186.3 million.  Now take all the hundreds of poker sites and skins and look at the total revenue being generated in this  industry.  It's truly staggering for an industry that is less than a decade old, wouldn't you agree?.  I'll be the first to admit, it's easy to lose focus of the big picture and just think that a poker room is a simple website that hosts online poker games and tournaments.  From the consulting that I have done however I can tell you that the dynamics of running a successful poker operation can easily be compared to running a Fortune 500 company in the states.

As poker affiliates we need to realize just how big the market is that we operate in.  We also need to realize that we are still conducting business in a somewhat immature industry that inevitably will be flipped upside down and operating under a completely different landscape in 10 years.  Don't let this scare you, instead embrace change and be ahead of the curve.

Now how does this correlate to the poker affiliate business you might ask?  Look at some of the authority websites in our little world, i.e. PokerListings.com, CardPlayer.com, PlayWinningPoker.com and ask yourself, what makes these guys different?  For starters these guys are not "traditional" poker affiliates, they are in the business of poker.  They deal with the top brass at the card rooms and negotiate their own custom deals.  Often times these sites will accept paid advertising deals versus any type of MGR or CPA.  Of course with the amount of traffic these sites drive they could certainly derive more off of a high CPA or MGR deal, but again they are in the business of poker and are not interested checking stats, wondering if players are getting tracked, and finding out who the good, the bad, and the ugly are.  An authority site with paid advertising versus affiliate revenue knows exactly what income it will generate month after month.

Now you certainly don't have to be one of these sites to be in the business of poker, but you do have to have the same mentality.  I like to use the "Act As If" theory when describing this.  If your run a site and write articles about Sit and Go tournaments, act as if you are the authority site on the internet for this subject.  Don't be happy with some ugly bloated template, don't only update your site once a month, don't blow your affiliate income playing poker.....ACT AS IF!  Read through your affiliate agreements, hold your AM's responsible, negotiate the best deals out there, have an accounting system for your various checks every month.......ACT AS IF!  Go to all the industry websites first thing in the morning, start talking on the phone with other big affiliates, stay on top of what is transpiring in the poker world, surround yourself with successful people......ACT AS IF!