Building for the Long Game: Martins Lasmanis on the Future of Affiliate Strategy

Media 24, an affiliate operator focused on iGaming, emphasized a shift toward long-term, product-first strategy after winning four industry awards in 2025 (notably ‘Best Affiliate’ at SiGMA South Asia and ‘Best Media’ at the Affpapa Awards). Management is prioritizing organic SEO, user experience, and testing new channels (including social and niche communities) to deliver higher-quality, predictable traffic valued by operators for engagement and LTV, while aiming to maintain operational speed and aggressive product testing over the next two years.

Analysis

Market structure: Winners are product-first affiliate networks (e.g., Media 24 analogues), large search platform owners (GOOGL/GOOG) that monetize higher-quality intent, and regulated iGaming operators that can capture higher-LTV organic users (DKNG, FLTR/ENT on Brexit/UK listings). Losers are parasite-SEO and low-quality programmatic inventory suppliers (small ad-tech/public publishers), which will face lower CPMs and higher churn as operators reweight toward engagement metrics. Cross-asset: stronger ad-quality → modest upside to tech equities and tighter credit spreads for high-EBITDA digital platforms; expect higher implied vol for niche ad-tech (PUBM) options, minimal commodity impact, and FX flows favoring USD on outperformance of US ad revenues.

Risk assessment: Tail risks include (1) a Google core algorithm change that unexpectedly depresses organic discovery (low prob, high impact), (2) regulatory clampdowns on iGaming advertising in key markets (UK/US/India) within 6–18 months, and (3) privacy/cookie regulation accelerating CAC inflation. Immediate (days): watch Google webmaster/core-update signals; short-term (weeks–months): operator earnings showing CAC/LTV shifts; long-term (quarters–years): product-first affiliates compound value. Hidden dependencies: affiliate portfolios tightly coupled to Google ranking stability and talent/tech stack; second-order effect is operators reallocating >10–20% marketing from paid to organic over 12–24 months if LTV proves superior.

Trade implications: Direct: establish a tactical 1–2% long in GOOGL via a 3-month call spread (buy 2.5% OTM, sell 7.5% OTM) to capture upside if ad yields rise; add 1–2% long DKNG (or 1% FLTR) to play operators who benefit from higher-quality organic traffic, target 6–12 month hold. Relative: pair long DKNG (1.5%) / short PUBM (PUBM) (0.5% put spread 3–6 month) to express quality traffic wins vs programmatic inventory pressure. Entry within 2–6 weeks; trim if underlying stock moves +/-10% or if Google issues major regulatory action.

Contrarian angles: Consensus underestimates how quickly operators will pay up for predictable, high-LTV organic traffic — this could compress multiples for low-quality ad-reliant publishers faster than models expect. The market may have over-discounted Google: search quality upgrades historically (e.g., 2012 Penguin) improved ad pricing over 6–12 months; a similar outcome would amplify GOOGL revenue more than many expect. Unintended consequence: consolidation among affiliates (fewer, pricier partners) will create boutique acquisition channels with premium pricing — identify early winners by monitoring operator LTV improvement >10% y/y in next two earnings cycles.

Key Decisions for Investors

• Establish a tactical 1–2% long position in GOOGL (ticker: GOOGL) via a 3-month call spread (buy 2.5% OTM, sell 7.5% OTM) within 2–6 weeks to capture upside from improved search ad yields; exit or reassess if Google faces confirmed antitrust actions or core update that reduces ad relevance, or if position moves +12% or -8%.
• Add a 1–2% long position in DraftKings (DKNG) to play higher-quality affiliate-sourced LTV improving operator economics; target a 6–12 month hold and trim if next two quarterly reports do not show CAC/LTV improvement of at least +5–10% y/y.
• Initiate a 0.5% short exposure to programmatic ad-tech (e.g., PubMatic, PUBM) via a 3–6 month put spread to capture downside from lower CPMs and inventory devaluation; close if PUBM’s revenue retention or RPMs stabilize for two consecutive quarters.
• Monitor two specific catalysts in the next 30–60 days and be ready to trade on them: (A) Google core-update/webmaster announcements (if algorithm favors quality, add to GOOGL/affiliate longs); (B) regulatory notices on iGaming advertising in UK/US/India (if announced, reduce DKNG/FLTR exposure by 50% until clarity).