Last month, I got the chance to pitch on stage for NEXT.io with the Xanada Investments Pitch Contest. We didn’t win but I took full advantage of the opportunity and we are off to a great start in our current round of fundraising. 

I was asked a question by an investor who’s seen his fair share of pitch decks. He has affiliate marketing experience, and he asked, How much money could StatsDrone unlock if you were successful? 

How much could affiliate marketing improve in terms of a percentage?

I hadn’t thought about a TAM slide like this before, but it was the right question.

The only problem is that in affiliate marketing, not enough people have shared enough data for anybody to answer this question properly.

I’ll attempt to quantify this as best as I can. I think that the affiliate marketing industry would be improved if affiliates had better analytics tools and better adtech for deploying their affiliate ads and managing their tracking links. 

What is revenue optimization?

I think the name is self explanatory but optimization could be the overall improved performance by adding up all the positive changes and subtracting the things that hurt revenue.

The negative things that hurt your revenue is what I call Revenue Leak. 

I have a big list of key issues that I think would have a negative impact on affiliate marketing, that could potentially be solved. Of course, the opposite end of that is optimizing for improved performance. 

Most of this is in relation to the iGaming niche, however this could be applied to almost all industries in affiliate marketing. 

Let’s start with the big elephant in the room in revenue leak. 

Affiliate fraud

Affiliate fraud is a big term that has many elements to it. This could be broken down into many subcategories but let's focus on what this is costing affiliate marketing per year. 

Cost: $3.4 Billion per year in 2022 according to Statista

I’ve read that click fraud in paid media is costing $100 billion per year. Now this isn’t all affiliate marketing but it is a big part of it.

Tools like Voluum can solve this for a lot of affiliates and more affiliates would benefit from using link management tools. 

CPA Fraud

My estimate cost: Minimum $100M / year.

A $10M / month seems realistic and CPA fraud is perhaps more normal than we want to admit. A very basic example of this is when an affiliate themselves will send lower quality traffic to water down their players to trigger high CPAs. 

This is an indirect form of revenue leak because it stops brands from growing and puts them at risk of failing. That means, you losing your lifetime revenue share accounts. 

Cookie stuffing

My estimate cost: Minimum $100M / year. 

I found this stat from Seon which although old, is still worth sharing assuming it is true.

“According to research by TrackAd, cookie stuffing accounted for 62% of all affiliate fraud that took place in 2018.”

Hacked links

Hacked links is something that maybe affects more affiliates than they realize. This can be anything from a government website that has injected links or someone gaining access to your CMS and changing your links. The last example might be less likely to happen but is possible and I’m sure if I ask enough affiliates, I’ll have a few that would confirm it. 

Shaving Commissions

Shaving of affiliate commissions is something no affiliate wants to hear or talk about. That is when a casino or iGaming operator detags a player. I did a poll on LinkedIn asking if affiliates believed they’ve been shaved before and almost every affiliate said yes. Some of the people that voted no were affiliate managers ironically enough. 

My estimate cost: $400M / year.

One of our customers had recovered 150k EUR across 2 affiliate accounts in a time span of 8 months. This was done through the use of a feature we call Changelog. 

Thankfully there are ways of analyzing your data to detect this type of behaviour or patterns if it happens to your account. 

If you want to learn more about our new feature with Changelog, DM me. 

If the iGaming industry is worth $100 billion USD and 40% is derived from affiliate marketing representing $40 billion. Just 1% of that is $400 million. Knowing how easy it is for any affiliate program to untag a player, I think many affiliates would agree with my estimate cost. 

Closed brands

The internet is littered with tracking links to closed brands. You can take a quick look at our list of closed affiliate programs here. 

At one point last year, we were closing around 30 affiliate programs per month. There is likely well over 1000 casinos closed in the last 10 years and every closure means you’ve lost your revenue share account. 

The problem with closed casinos is a compounded problem. Affiliates are sending traffic to casinos that don’t always last a long time on the market. If they had known where they would get the best ROI and long term player value, they would have sent that player elsewhere. 

A recommendation engine would a vital part of solving this form of revenue leak. It is both revenue leak as well as trying to optimize for more revenue. 

Now we see why so many iGaming affiliates want to charge a flat fee to be listed. 

My estimate cost: $500M / year

Why do I think it costs that much? Well if a casino closes, they often will take player money with them in unreturned wins and deposits. That is losing a customer to iGaming potentially for life. 

A very quick model, take ReadyCasino which closed in January 2025. I found 25 active affiliate sites still linking to ReadyCasino with a tracking link. In Ahrefs, I found these sites were sending roughly 70,000 monthly organic visitors so let’s do the math.

70,000 monthly visitors with a 1% conversion rate is 700 FTDs / month. At 200 EUR per FTD is a monthly loss of 140k EUR. 

If we assume this is happening at least with 500 other casinos then that is 70M EUR / month lost or $840M EUR. 

If you want to know if your affiliate site is linking to a closed brand, reach out again as we have a new product launching soon. 

Broken links

Broken links are not the same as closed brands but you could put them in the same category. Broken links or using the wrong link I’m going to put into the same group. 

My estimate cost: $200M / year

Broken links can happen for any reason such as a human error or something on the server side of the affiliate. It could also be at fault of the affiliate software or affiliate manager. 

Tip: what every affiliate should be doing is running a weekly campaign report in StatsDrone to see if your campaigns still have traffic and FTDs flowing through them. If they don’t, you need to inspect the tracking link that is behind that campaign and make sure things are working and they are the right link. 

Misconfigured deals & setting up of commission structures

My estimate cost: $50M / year

This could be a problem that either hurts affiliates or helps them. If deals are not configured properly, usually they work against the affiliate. If a deal isn’t applied to an affiliate properly then they could be sending traffic that isn’t getting counted. That’s almost as bad as a closed casino. 

I’ve got 2 stories to share.

One is there is a certain software that I swear has conveniently made it easy for you to get tracking links in the backend but have NO CAMPAIGN assigned to the link without you knowing. Only to be told later on by an affiliate manager that the reason for no performance is because a deal hasn’t been assigned. Unacceptable but we’ll likely have to start building checklists for features like this.

2nd story, one time my business partner Darrell Helyar went through the terms and conditions of one of our programs we worked with. Based on the terms and conditions, it seemed they didn’t calculate commissions properly. Sure enough, that resulted in a substantial commission accumulated over a year. 

I believe the program had written terms but not configured the commission plan how they wrote it. I think very few affiliates even know to ask. 

Inaccurate reporting

This shouldn’t happen at all but it does. I think you have affiliate managers that sometimes misconfigure the affiliate program they’ve setup. 

My estimated cost: $10M per year

Adblockers

A few stats I’ve found that 31.5% of internet users are using adblockers and that represents 1.2 billion people.

Adblockers cost $54 billion per year in lost revenue. If affiliate ads represent 16% of all the ads out there, then we can calculate that with an easy rough estimate.

Cost: $54 billion per year globally, or estimate $8.64 billion per year in affiliate marketing. 

There are 2 main components of blocked ads which can be gif banners as well as certain types of tracker or tracking links.

Sadly, when you login to almost every affiliate program, you get GIF banners!

Many top sites will design their own ads and types of ads and almost never use the GIF banners provided by the affiliate program. 

Let’s face it, people have banner blindness and they want curated everything. GIF banners just make it very easy for any adblocker to know what it is to shut it down. 

Link management tools can make tracking links less likely to be blocked. This is another good reason to consider these link tracking tools. 

GIF Banners

Speaking of GIF banners, these things should be almost banned. Banner blindness has been a thing for a good 20 years and every year it gets worse.

My estimated cost: $1B per year

Banners easily get blocked by ad blockers but the conversion rates of GIF banners is very low. 

According to a recent article from CXL, display ads have a CTR (click through rate) of around 0.5%. For search ads, these can have CTR at 5% or higher. 

It is very rare to find an affiliate program that doesn’t offer banners. 

The problem with banners is that you can’t update the data inside the image itself without replacing it. Most affiliates don’t like using embedded ads from platforms because it can slow down their websites. 

So a short summary of the problems with GIF banners:

  • Information expires and cannot be updated
  • Low conversion rate
  • Commonly blocked by adblockers

https://cxl.com/guides/click-through-rate/benchmarks/

Payment gateway issues

My estimate cost: Minimum $50M / year.

I’m sure someone like Narcis Gavrilescu would have more to comment on this. 

The point here is that when players can’t get their deposits going, churn is likely to happen. Payment gateways can go down or disappear at any point in time. 

If you’re tracking your performance and FTD values every week, you might discover one of your partners to have lower KPIs and this could be one of the reasons for it. 

Incorrect & expired offers

My estimate cost: Minimum $100M / year.

I’m sure this problem is costing everyone more than $10M per month. 

Expired offers

My estimate cost: Minimum $1B / year.

I think I’ll need more work of making a better estimate of how much expired offers is costing the whole industry but would require more research. 

Expired offers are everywhere especially with GIF banners. 

Having the right offer means the affiliate has to build and maintain a database of offers. The issue is that there isn’t a centralized database where affiliates can ensure their offers are up to date.

It is up to the affiliate manager to chase affiliates to update content and also up to the affiliate to ensure this is up to date.

Because trying to get affiliates to update offers, it likely stops affiliate programs from AB split testing their offers and trying to create more tests.