THIS IS WHY OPERATORS LOSE PLAYERS | Franz Gerhart | VYKING

iGaming Real Talk is launching the next series. This is the fourth event out of the 11 events we're doing this year, and I'm very excited to bring you the insights from the expo floor. This time on the affiliate as well as operator relationships, as well as what's missing in the industry, what's the trend, what are we looking at when it comes to 2026, 2027, and beyond in terms of the trends, AI, and everything else. This series is brought to you by EvoVerse.

They offer custom crypto casino solutions as well as source code. This series is also brought to you by Wicked Games. They create slot games that slap. Hello and welcome back to another episode of iGaming Real Talk. I'm here with Franz from Viking and we are at iGB Live conference in Madrid. We're going to discuss some interesting things, but more importantly, Franz, tell me how you came up with the brand name Viking.

That is a funny story, actually. We changed name over the years a couple of times and we're all tech guys. So, I have an engineering background. Most of the people in the company at the time were tech people and we weren't really good at marketing or coming up with names. So, we got an agency and the agency looked across the industry and they said like the Nordics, the team of the Nordics is quite popular. So, why not come up with Viking?

And since we're all from central Austria, actually from within the Dutch region, most of the founders, one of my colleagues said, "We have nothing to do with Vikings whatsoever." And I looked at him and said, "Look, man, do you think that anyone who's softswiss is from Switzerland?" And this is this is when where we said, "Okay, let's do it."

I mean, you could be Viking. I couldn't recognize you would be from Austria or Germany or from Dutch regions. I thought maybe you were somewhere from the Sweden or somewhere from the north. That's what I thought when I saw Viking.

No, actually we aren't. So...

Okay, cool. I mean, it still works. I think the name is really it has a lot of benefit and usually in marketing even from my experience like if we can have the first time user or a viewer to somehow associate something that he or she already knows with this name, we already did a good job in terms of that familiarity because you know, our brain works in terms of like memories and if you can associate something with something, we can easily remember.

The more we can make a brand remember, the better especially in our B2B space.

There's also the added benefit is the name is quite short. It's a dot com domain.

Excellent. How did you get that? Or did you get it like many years ago or...

No, no, it was it was quite expensive, but it was available.

Oh, cool. How much was it?

On sale. I mean, quite expensive. Look, crazy is like 5K or something.

That's fine. I think that's yeah, that's for a brand domain, yeah. Cool. I mean, let's talk about affiliates and we're here in our affiliate conference here. So, what do you think is the biggest mistake operators are still making when trying to attract and keep strong affiliate traffic this year or next year?

One of the things I can tell you from a platform perspective, yeah, cuz this is where I'm coming from. One of the things that I'm seeing time and time again is that you're not catering for those two main entry barriers that you have. So, the moment you have the player on the side, there is the registration, which is one of the big hurdles, and then after that comes the payment of deposit.

And if you don't optimize that funnel for the affiliate and for the traffic that you're receiving, then obviously you do a number of things and there's plenty of ways to screw this really up badly. So, both the registration and the deposit is a minefield. There is a thousand things you can do wrong and even if you have optimized it well, it may not be optimized for the traffic well.

So, one of the things that if I were an operator that would do is get a few affiliates, see the traffic you're getting, don't skip testing, never skip testing, test it very well.

See where the bucket is leaking.

Yes, exactly. You have to fundamentally think of it from the different perspective, which is the consequence. What's the consequence of not converting? Well, the consequence is not only that you are paying CPAs in worst case for traffic that never does anything. The worst thing is you lose trust. Affiliates talk amongst each other.

So one of the obvious things is you lose the trust and the problem is not that you lose trust with one or two, the problem is when you scale and you have like 20, 30, 40 affiliates, they talk amongst each other over regions... And they will know you're not converting.

And then they're not going to promote or work with your brand anymore.

Absolutely, yeah. That is one of the big mistakes that I think operators are making and then obviously there's a long tail of things which you can screw up as well is intransparent terms and conditions, late payments, funny tactics like shaving off commissions, etc. So, I mean, this is the known stuff, but I think if there is one high impact goal that you should focus on is don't skip testing.

Yeah, that's very insightful. Focus on the basics, on the foundations and your flows rather than just putting more budget and trying to get more. Instead of that, just fix the basics. That's what you're saying. That's quite insightful as well. And if we look at the markets, it's getting competitive every quarter, every month as well. What do you think is the smartest way for operators to structure and scale their affiliate programs instead of just throwing more budget?

I want to take one step back here and look at what is the relationship between the operators and the affiliates. And I say this as a bystander, you know, as someone who is seeing each entity and not having a preference for either one.

Yeah, unbiased.

Unbiased. It's like a broken marriage, very dysfunctional. One doesn't trust the other. There is at some point maybe even contempt, but the real thing is that the parties got so used to each other that they have very little incentive to change the model or the game plan. And so when you see it in the context of the platform, if the operator and the affiliate don't cooperate well, then obviously we're not making any money either because you cannot collect revenue shares.

Our commercial model is not based on crazy setup fees or high minimums, right? We don't make any profit on the setup fees. It really only compensates us for the work that we have to invest. So if we then also not get the revenue share because there is the race to the bottom with between the operators and the affiliates, that's a big topic.

And if you want to scale an affiliate program smart, then in my opinion you have to look at numbers individually and by group, by cohort, by segment and have good BI in place. Look at the metrics that people are looking at. So you have a lead to reg, reg to FTD. You have unique active players. You have a couple of metrics which you're collecting. Also what kind of games they're playing or what kind of products that they're actually interested in.

But with the data we're collecting, you can tell so much about the player, who the person is cuz that's what's essentially is important. If I know who the person is, if I can fit their behavioral patterns against the curve that I have already seen from other players, then I can very accurately estimate where the player is going.

And when I know where the player is going, I can agree with the affiliate on something which is not just a CPA or rev share, because the truth is, if I convert well and the affiliate has good engagement and traffic, we are both interested in maximizing the opportunity.

Yeah.

So, instead of just going and saying, "Hey, I pay you a CPA or rev share." And on the other side is you, "Well, but I don't know which traffic converts the best on which side, so I just try to recycle the players all the time."

It's just optimize the website for the user, hyper-personalize it, offer the best possible product to the right person at the right time, don't over-bonus, don't over-tip, don't look just at FTDs and unique active players, go into the behavioral patterns, offer a really good service to the player, and then have dynamic CPA and dynamic rev share. I know it sounds far-fetched, but I think many of the platforms that you find around, they're ready for it.

It's just the operator at dynamic...

I don't think it's an industry term yet.

Yeah, that's what it's something new that I heard.

So, when you what do the marketing platforms do like Google, right? If you place a lead on Google, you have a bidding process, right? Whoever bids for something for real estate the most is getting and essentially, if I understand that I have a low-value player, which I know from within the first 15-20 minutes, why would I pay for the person like 300 euro CPA just because the market average is 300?

Oh, wow, interesting.

And why would I pay like if it's a low-value player. But this is the point. If I'm as a platform, I'm saying I have the data for both sides. If they both ends are saying, "Okay, we're exchanging that information, I'm giving you the permission that you share it with the affiliate." And vice versa, the affiliate understands what they're sending to the operator. They can be opportunistic and say, "Okay, this brand is sending me more."

But if they're optimizing for ROI and profitability, this is their aim, if they want to have maximum profitability, they will in the short term run with the brand which is just throwing marketing budget in, giving crazy CPAs, giving crazy ratios more. But in the long run, they will earn with the other model more. The thing is, both parties don't even need to trust each other much. They just need to give permission to show each other's metric.

And the metrics from a platform perspective, once you come to a point where you have I don't know, 10, 15,000 unique active players per month, you have so much curve fitting that can be done. You have a behavioral curve which when a new user comes, I went to the website, I scrolled to the terms and conditions 20 minutes, then I go to the deposit page, I make a maximum deposit, I claim the maximum bonus amount. Who is the guy going to be?

Who do you think is the person going to be? Is it a value better? Is it a bonus abuser? So, I already know, why do I need to pay 300? And why would the affiliate expect to get 300 CPA for that person? It's very interesting. John from StatsDrone also is trying to drive conversations along this way where there is a central repository kind of for data, for intelligence, for as well as benchmark.

But this seems to be a very critical issue at the moment where both parties don't share access to data. So, I think that would be a good thing to solve.

In my estimate, the problem is already solved. It's just there is no permission to implement it.

Okay. You think there's no permission?

Cuz we're in this broken, dysfunctional marriage where people still find it convenient, you know? You know that things don't work. You know that you don't get along well, but just because you still share the house, you still have a mortgage, you still understand what the other party maybe kids. So, you have your FTDs, you have your all your numbers. It's...

Good point. Yeah, it's a good point. Well, thank you for sharing with me. Maybe we go deeper into this on another discussion. But thank you for joining me as well as sharing your insights and also something new that I heard was Dynamic CPA. So, I'm going to look into it as well and maybe we'll have chats offline too because I'm also really curious about data and intelligence. Thank you for joining.

Thank you very much for having me.

Thank you guys for watching. Do let us know your thoughts in the comments below and I'll see you on the next one.