Young Affiliates & Upfront Payments

[LiveCasinoPartners]

I am a new (gambling) affiliate, less than a year. I am also in my mid 40's. Do I count as young?

I hope so Ray, I'm not far behind you! lol


I think that this trend is self limiting. Like the Gooner said, it's a free market and I don't begrudge affiliates who are doing this at all. Good for them.

However, we don't and will not buy advertising space using this model. We would however give content to a site and special promotions to make our program stand out. That's a win-win for all. I don't blame the operators, but I can see how they are fueling the pre-paid deals.

[Christoff]

This thread has been a great read - it seems like affiliates will take what they can where they can get it. I would do exactly the same

I think the problem lies with negotiation skills........if an AM is willing to offer a pre-paid deal, the AM must accept that it's a risk and nothing is guaranteed.

Some affiliates will carry on promoting the brand until the fixed fee is covered - all this though needs to be covered off before the deal is signed.

As for long-term profitability, revenue share is king but there are many programs out there who change their T&Cs, shave affiliates and so on. In the last year this has become a lot more prominent so I don't blame affiliates.

On the other hand, I do think the over-aggressiveness of some operators has spoilt some of the affiliates who now demand very high tenancy plus rev share deals.

[ck8795]

1 - There is nothing wrong with an affiliate requesting payment first especially these days when operators are changing terms left right and center.

For the operators in this thread, please dont reply with we dont change our terms or we haven't done that.

What your not doing now you might be doing in six months and it's because of this that affiliates are opting out of rev share models. There's no such thing as player for life.

2 - Why should an affiliate put up your ads and not get paid because the program isn't converting as well as those sales pitch emails promised. There's no such thing as free advertising.

I was thinking A PER YEAR PRICE ,$2000 A MONTH is very good money ,dont think a start up affiliate could get that.

$2000 a year is a ripoff Judy, especially if its in a prime spot. A new affiliate could make more selling links

I didnt vote though because there are way to many options and to add I think the word unjustified is a bit overboard. lol

[GamTrak]

I do a mixture of media buys & revenue share and my preference is rev share, but that is due to lessons from the past and other variables. I'm at the point where I want to be in full control of who gets placed where so I've basically stopped doing media buys. Plus the fact that you make more money with rev share.

With the home page I do not place anyone that is less than a year old even if they do offer to pay upfront because it's not worth it in most cases.

I don't begrudge anyone doing media buys, but IMO in order to save yourself the hassles that come with it, lack of control, deals gone bad as well as business relationships strained to just stick with rev share and ask for more than the normal 25% - 35% offered if you can produce.

[Dominique]

An affiliate site is not much different from a supermarket.

There is a science as to where to display items to generate the highest revenue from them. (and it's not always the index, often there are much more targeted spots providing better conversions)

The supermarket will make sure that each customer finds the bestsellers easily, since chances are that just a glance will trigger a purchase. People trust known brands and will pick them over the unknown, or we would't have Campbell soups etc)

However, sometimes a product will be sold at a much lower price to the supermarket, allowing for more profits.

These items will get special exposure even though they do not normally qualify.

That can be compared to a website taking a placement fee or media buy.

Before I move a consistently well converting casino to give someone new a chance, I want to hedge my bets. Why would I replace a consistent revenue generator with one with unknown conversions and risk losing revenues?

The issue here is that both parties take a risk, if conversions are bad someone has to lose something.

So I try to keep the fee reasonably low, figuring that if the partnership tanks, both parties will share losses equally. That makes for a good partnership even if things don't work out. Reputation is important for affiliates, too. If the fee is consistently too high, the affiliate will soon get a bad reputation and be unable to secure contracts.

Agreeing to a minimum delivery of players for the fee is not in the stars here, since the fee exists in the first place because I have no idea if the place will convert.

If things go well and rev share exceeds the placement fee after 3 months tops, the placement fee will be removed and normal rev share takes over.

That's how I have done it, and it's a fair system where partners respect each other and carry an equal burden of risk.

Pricing depends on the exact exposure and how much I have historically made from that exposure. Again, if you overcharge, you will get a bad reputation. Don't think AMs don't talk about things.

[Shaun O'neill]

I can iunderstand why you charge a fee, in my mind i find the idea of a fee an odd one, considering this is an affiliate business.

I would rather work out a fair rev share deal and run say an exclusive freeroll for €2k or a slot tourney for €3k's worth of gadets this benefits both parties you get an exclsuive promo ythat no other site is offering plus if it is a cash promo the players will use those to continue to play and you still earn off them....


Shaun

I have a list of questions I ask any operator that aproaches us and if they 'fail' on one of those questions we do not promote them (regardless how how much they would pay us) I also check there are no complaints about the casinos on any of the major forums (and if they are we either dont promote them or get to the bottom of the issue before proceeding withany deal).

We charge an advertising fee and now only sign up to new programs when they buy ad space of a certain value.

This has helpped us alot and certainly helps us weed out the 'spammy' type operators that will harass (via email and phone) none stop. But once you tell them they need to pay up they generally shut up and vanish which is nice.

Those that don't vanish and agree a deal with us we know are

1. Good to pay us long term (they are a casino with some cash) and
2. Serious about working with us. So we give them there advertising space (which they benefit from) and then we give them plenty of exposure and see how they do.

Now because we charged that fee we can afford to give them the exsposure without too much risk as we know how long we can give it for before we need to start putting back casinos that we know from experience convert.

This is something we did not do before we had a number of high traffic sites so I do feel that we offer the casinos that are serious and take it up good value and I always ensure I tailor each specific deal to the specific operators requirements to ensure they get a good deal.

For us this is the start of a relationship which we intend to grow and flourish so we want the operator to be happy with the deal.

At the same time we couldnt just give a casino we had never tried before mass exposure and risk it not converting as we would have an opportunity cost so this covers that.

We also use the 'advertising fee' that we charge to create pages that are used to promote the sponsoring casino these are perminent and have long term value.

I actually got to a point where I was getting over 12 phone calls per day (one day was as high as 26 phone calls) all international calls from various affiliate programs wanting us to sign up. I am fairly sure 'New Affiliates' dont have that problem and that is partly a victim of our success (I now have a call filtering system, best money I ever spent).

Longer term we then work on a Rev share basis and I like to agree the % in advance (before we take any advertising fee) as if the program is not competetive I will tell them right there and then as if they are lets say an RTG powered casino and are offerign me 10% less com than any of the other RTG casinos I promote I can be fairly sure they are not going to make me as much commission so they would in turn end up with less prominent positiosn etc. Hence why I ensure I discuss every aspect of the deal.

Now when we where 'new' which was back in 2001 I remember then I would be the one going to the affiliate programs looking for things to join up to, now I have far more come to me than I could promote.

I answered

I am not threatened by this trend - why would this threaten me? As and affiliate I can do the same and as stated above we do and unlike a new affilaite who has little traffic to offer, I can offer the casino real value. The only 'threat' I have is that an operator gets duped by an affiliate that is not offering real value so I would advise any operator considering paying an affiliate an up front advertising or listing fee to make sure the affilaite spells out exactly what they are going to get for their money.

I DON'T believe this is what affiliate marketing SHOULD become - because you are asking in relation to 'new affiliates' most big affiliates will do this already but that is offering value. So maybe the question should be 'should new affilaites aspire to be able to charge affilaite programs a listing fee?' to that the answer would have to be yes. why not good luck to them.

I blame INDIVIDUAL OPERATORS for this trend If we hadnt been harassed so much by affiliate managers of programs that we didnt promote to sign up and promote them me and my business partner would have never had to sit down and think up ways to get our time back. Helpped by the fact that some of these 'persistant' affiliate managers had offered to pay us a fee just to be listed, we figured we would be better off working out some kind of package that would benefit both parties.

[Big City Jack]

Why should an affiliate put up your ads and not get paid because the program isn't converting as well as those sales pitch emails promised. There's no such thing as free advertising.

(bold added)

Well said, kaus.

I just posted a thread about an article I found relevant to the topic here which I discovered today. One could almost quote the entire piece. I felt the article merited it's own thread, but you can find it here: "[Operator] Acquisitions a Death Knell to Affiliates?"

[casinogod]

It is an affiliate business did you spot the keyword there?

Lets say you have a site that you know makes £2000 per month from one particular banner spot and a casino that you have never heard of or that you have heard of but know started last week wants to come and be placed on your site. Do you just pull down the casino that is making you the £2k per month from that one spot and Risk sending traffic to a program that might never pay, and might never convert and might never pay players and ruin your sites reputation by association?

You would be a fool if you did, hence I do my checks or due diligence and I charge an advertising fee and ensure I give good value for money.

But If the casino fails to convert I have mitigated my risk.

As I stated I also agree the rev share % in advance to ensure it is at the right rate. If it is too low and I am not going to be happy with it I say so before selling any advertising space.

I discuss exclusives in advance too and if a partner gives us an exclusive then they will benefit from additional exposure. So that is a good suggestion and one which all AM's should listen too.

One more thing to bear in mind is I have lost count of the times I have had affiliate managers tell me that their casino converts better than any I have on whichever site of mine they happen to be looking at. If they are so sure then they would surely be happy to pay the advertising fee and if they are not so sure then why should I be.

I can iunderstand why you charge a fee, in my mind i find the idea of a fee an odd one, considering this is an affiliate business.

I would rather work out a fair rev share deal and run say an exclusive freeroll for €2k or a slot tourney for €3k's worth of gadets this benefits both parties you get an exclsuive promo ythat no other site is offering plus if it is a cash promo the players will use those to continue to play and you still earn off them....


Shaun

[Shaun O'neill]

Andy

I think this is a great topic and one that has an answer that benfits both sides.

With your €2k example i would say that is fine from your point of view but what about from mine, for example:

My sportsbook has the most comprehensive offering in the Nordics and Scandinavia so if you are Scandi/Nordic facing site you know we will convert but any body with any sense would never add me to a Candian facing site or German site for example we are just not going to convert. I like to do my research on any potential new affiliate that focus on what we class as the Rest of the world before i add any money to pot.

As I said previously my method which to date has worked very well is pay a fair revenue share and add money for exclusive private events.

Shaun

It is an affiliate business did you spot the keyword there?

Lets say you have a site that you know makes £2000 per month from one particular banner spot and a casino that you have never heard of or that you have heard of but know started last week wants to come and be placed on your site. Do you just pull down the casino that is making you the £2k per month from that one spot and Risk sending traffic to a program that might never pay, and might never convert and might never pay players and ruin your sites reputation by association?

You would be a fool if you did, hence I do my checks or due diligence and I charge an advertising fee and ensure I give good value for money.

But If the casino fails to convert I have mitigated my risk.

As I stated I also agree the rev share % in advance to ensure it is at the right rate. If it is too low and I am not going to be happy with it I say so before selling any advertising space.

I discuss exclusives in advance too and if a partner gives us an exclusive then they will benefit from additional exposure. So that is a good suggestion and one which all AM's should listen too.

One more thing to bear in mind is I have lost count of the times I have had affiliate managers tell me that their casino converts better than any I have on whichever site of mine they happen to be looking at. If they are so sure then they would surely be happy to pay the advertising fee and if they are not so sure then why should I be.

[Christoff]

I agree with your post Shaun but I also agree with yours Andy - if I was an affiliate, I would not remove a converting program to accommodate a new one unless I had good reason to.

What is apparent is that newer programs/operators are finding it tougher to make the big bucks due to the business maturing and developing.

What the programs/operators must do if offer USPs for the affiliates to promote because they are only as strong as the products they promote.

One thing that I believe would help everyone involved is feedback - sometimes more feedback from affiliates would be nice so we can help to serve you better

[universal4]

One thing that the operators also fail to consider is TIME!!!

If a new group comes to me and wants exposure on 6 or 8 or 10 sites, and of course they always want lots of exposure in prominent places, in addition to the risk I take on putting their group in place of creatives for other groups I am already working with, I must also now invest a serious amount of time and effort into making the changes....

I personally do NOT feel it is out of line to ask for a "fee" for the time I must spend....

I commend the managers and reps for having faith in their product, but if you can't throw a few bucks toward the affiliate for making those sweeping changes, then you must deal with the fact that the affiliate may or may not join your group and throw a few banners or links up for you in the places they choose to test your group out and only after considerable testing they may increase exposure to your group based on those test results....

You want the exposure and you want it NOW? Pay for the time it takes to get it up!

Rick
Universal4

[Christoff]

One thing that the operators also fail to consider is TIME!!!

You want the exposure and you want it NOW? Pay for the time it takes to get it up!

I do agree here but it's down to both the AM and the affiliate to negotiate as well as possible.

There is no right answer to this as many affiliates don't deliver and many do - it's a question of trial and error to an extent too.

[casinogod]

Hi Shaun

I do see your point entirly, as I said before when I add a program it is with the intentio of building a long term relationship so if a program that does not accept players from the regions that the site in question gets traffic from then I would let them know in advance.

My sportsbook has the most comprehensive offering in the Nordics and Scandinavia so if you are Scandi/Nordic facing site you know we will convert but any body with any sense would never add me to a Candian facing site or German site for example we are just not going to convert.

[casinogod]

Hi Christoff

I 100% agree with this point, they can make a very big difference, although I do think what an affiliate manager sees as a unique selling point and what I would see as a unique selling point are not always the same things. If the casino is the same software and all the same games and very usually very similar promotions to other casinos I promote there is nothing unique.

What the programs/operators must do if offer USPs for the affiliates to promote because they are only as strong as the products they promote.

Regarding this quote I 100% agree again and I believe it is in the affiliates best interest. In fact I feedback to my affilaite managers very regularly and discuss all manor of ways we can give them more exposure as well as what they can do to help me in that quest.

One thing that I believe would help everyone involved is feedback - sometimes more feedback from affiliates would be nice so we can help to serve you better

[CSN Reyes Media]

I believe there is always a risk in this business regarding upfront payments but no risk = no reward. If you spend $100,000 over x amount of affiliates and finally get that golden affiliate that can bring in $xx,xxx,xxx for you, it is well worth it.