Average player value (CPA vs Rev share)

[baldidiot]

I think I already know the answer to this but I'm curious to hear your opinions. Which commision model (CPA or rev share) produces a higher rate of revenue for your platform(s)?

[manuelinbmw]

Stick with revenue share it will pay off in the long run!



USA Online Casinos
Online Casino Reviews
Online Slots
Best Bonus Casinos
USA Online Slots
USA Online Poker
Sports Betting News

[Shaun O'neill]

If i was an affiliate i would always go with a rev share deal if you feel your players have any value and you have faith in the rooms that you promote.

Shaun

I think I already know the answer to this but I'm curious to hear your opinions. Which commision model (CPA or rev share) produces a higher rate of revenue for your platform(s)?

[baldidiot]

Thats was the response I was expecting. But I was curious if anyone has or considered switching payment models after being burnt following the closure of sites, eg: playboy gaming.

I'm assuming any players you had are lost to you in those cases? Or would some kind of compensation be paid?

On a similar note, if you are on a rev share program and have a number of players at a site that goes bust are you able to put in a claim to the liquidators for their estimated value? Obviously you wouldn't get the full amount, but something's better than nothing.

(By the by, I'm not intending on promoting sites I deem to be unstable but these days you never know whats going to happen!..)

[laffit]

i think you need to understand your players when choosing cpa or rev share. if you have a bunch of low level players that aren't likely to deposit much go with the cpa. if you cater to big players then rev share is obviously to way to go.

in general, id go with the rev share. but... it can take a while to pay off at times

[TheGooner]

Thats was the response I was expecting. But I was curious if anyone has or considered switching payment models after being burnt following the closure of sites, eg: playboy gaming.

So by taking CPA you can protect your own potential earnings - even though your players that you referred are screwed ?!! Nice ...


If you think that a site is dodgy - and think that taking CPA is a good option - then you're not thinking long term.

Work with the bigger, experienced and stable programs.

[dhayman]

I think it is important to have a good balance between the 2. It's sort of like diversifying. If the US legalizes online gaming at some point, Las Vegas will take over the industry, and I believe at that time, you will be hard-pressed to find any more REV plans in existence; I think small CPA's will then become the norm.

Given the above, I would still diversify between the 2, if I were starting out again, as I think legalization in the US in at least several years away.

[baldidiot]

So by taking CPA you can protect your own potential earnings - even though your players that you referred are screwed ?!! Nice ...


If you think that a site is dodgy - and think that taking CPA is a good option - then you're not thinking long term.

Work with the bigger, experienced and stable programs.

That wasn't what I meant at all - apologies if that's how it came across. I'm only on intending on dealing with sites who I deem safe not only for myself but also for the players and am currently in the long process of evaluating various programs.

What I was referring to are instances where sites which do appear safe close their doors - to take the playboy casino example, I believe they were a sister site to intercasino and ran the affiliate prgram ran from partnerlogic (this is from memory so correct me if I'm wrong). A new start up from the intercasino boys would seem like a safe option to promote, but it's closure would have lost all of those players from your account (who, no doubt received an email from playboy offering them a nice bonus at intercasino thus retaining the players but not having to pay commisions). In this instance none of the players would have lost any money.

The other instance I was thinking about was the closure of the microgaming poker sites following the tusk collapse. I'm sure many of you promoted such sites and it's not something that anyone would have predicted.

[Ace Fun]

I thought Las Vegas was already a major influence in the industry, so why would the legalisation of gaming in the US cause a major shift. Of course it would increase the number of players, and it would make payments easier, but surely casino operators would be reluctant to pay higher taxes by moving to the US.

[ironman2000]

This question seems to pop up every month or so.......................

I would always advise going down the path of Revenue Share because as it has been mentioned ............its pays off in the long run.

CPA is a good incentive on special promotions, but I would only give CPA deal's to people that I have a long established relationship in this Industry.

Let me also suggest that its time for a question & answers section here for newbie or not so newbie to find answers to questions before having to post the same question all the time. Which we all have answered a thousand times as well

Happy Trading

I also have a few more openings left to meet people at the LAC conference in London 2010................so PM me or drop me a short email or even better add me to your skype for a quick chat..............

Have a wonderful weekend to all

[hiddenchamp]

I think I already know the answer to this but I'm curious to hear your opinions. Which commision model (CPA or rev share) produces a higher rate of revenue for your platform(s)?

I would always choose CPA because my players are rather low value. Believe me in the past 3 years I have tried rev share deals many many times.

[AlexG/PartnerLogic]

Thats was the response I was expecting. But I was curious if anyone has or considered switching payment models after being burnt following the closure of sites, eg: playboy gaming.

I'm assuming any players you had are lost to you in those cases? Or would some kind of compensation be paid?

On a similar note, if you are on a rev share program and have a number of players at a site that goes bust are you able to put in a claim to the liquidators for their estimated value? Obviously you wouldn't get the full amount, but something's better than nothing.

(By the by, I'm not intending on promoting sites I deem to be unstable but these days you never know whats going to happen!..)

Hi, just to clarify, when Playboy Gaming shut down, all affiliated players were sent an email with a link to InterCasino containing the affiliate tracking of the affiliate that had referred them originally.

We tried our best to make sure the transition from Playboy Gaming to InterCasino was as smooth as possible for players, and also to maintain the integrity of affiliate tracking.

Regards,
Alex

[TanyaEverest]

I personally think the biggest influencer is your business model.

Do you have developers you have to pay out each month, or are you pretty much doing it all yourself? How much do you need to reinvest to grow from the start? Sites with many employees, or in constant growth mode need CPA because they need a similar paycheck each month. If you bring in 50 players each month on a straight CPA, you have an idea of what you can pay out.

If the site has anything to do with rakeback, loyalty, incentives, forum with strong retention, then rev share is the way to go.

When it comes down to it, there is no perfect formula to tell you what you should use-it really is a case-by-case basis depending on your business model and what your looking to get out of your affiliate relationships. What you may want as a new site could be very different than a few years down the line. There are no absolutes either-you can always talk to you AM about changing payment if you feel it's necessary to be sucessfull.

[casinojack]

If you can and need cash flow, do both to start out. Is a good way to protect yourself also.

[TheGooner]

I see it's affiliate managers generally giving some possible reasons as to why affiliates might want CPA - without stating the obvious fact that it usually is a lesser revenue stream in the long term.

Plain English Translation : Casinos are happy to pay CPA - it costs them less for sites with good quality players.
(If your players are low value - and it's unprofitable for the casinos - you'll quickly be moved to rev-share)

I do revenue share with 95% of deals (a couple of fixed monthly tenancies) and with my long term partners I'd say that the monthly rev-share income is paying out at 250%-300% better than the CPA payouts would be at those same sites.

Perhaps I have great players - or a higher percentage of whales?
Perhaps my sites engender loyalty at their signed up sites?
I don't know ...

But in my opinion taking CPA is leaving cash on the table during the lifetime of the relationship.

[LiveCasinoPartners]

I do revenue share with 95% of deals (a couple of fixed monthly tenancies) and with my long term partners I'd say that the monthly rev-share income is paying out at 250%-300% better than the CPA payouts would be at those same sites.

That's pretty much the numbers I've found as well. Our program doesn't offer CPA outright. It can be done on special cases, but I figured push for revshare. Revshare is great in my opinion because the the majority of the high quality affiliates prefer it.

So, I would certainly go revshare.

I've heard of some affiliates living in certain regions where CPA is better for decreased legal exposure. Apparently, in some regions revshare may not be legal where CPA is.

[Muppet]

Most affiliates repeat the rev share mantra when asked this because rightly so, you can earn more in commissions in the long run. But aside from seemingly good programs doing a grand prive on you, almost no affiliates (none I have ever talked to anyway) consider the time value of money.

If you get say $200 cpa for a player, can you reinvest that $200 and turn it into $500 faster than the time it would take for that player to earn you $500 in rev share on that program? If yes then you should go for the cpa. Only you can answer the question though because everyone's players and IRR are different, as are the player values at different programs. There is no one right answer - horses for courses.

[gamblingbutler]

So, I would certainly go revshare.

I've heard of some affiliates living in certain regions where CPA is better for decreased legal exposure. Apparently, in some regions revshare may not be legal where CPA is.

Right, that is something I just wanted to point out. BTW there is at least one really big poker affiliate (term super affiliate probably fits) who - as to my knowledge - only does CPA. Prepaid CPA to be exact.

.....consider the time value of money.

If you get say $200 cpa for a player, can you reinvest that $200 and turn it into $500 faster than the time it would take for that player to earn you $500 in rev share on that program? If yes then you should go for the cpa.

I personally think that was the single most convincing argument to go for CPA I have ever heard!

We are still sticking with revshare but that was a damn good point.

[affeurope]

Revenue share is the best deal but takes patience. I don't know to many affiliates that made large money in their first few months on rev share though. However CPA rates are getting higher and higher and if you have the ability to constantly send depositing players could be good for you also

[TheGooner]

almost no affiliates (none I have ever talked to anyway) consider the time value of money.

If you get say $200 cpa for a player, can you reinvest that $200 and turn it into $500 faster than the time it would take for that player to earn you $500 in rev share on that program?

Seriously flawed logic IMO in that it assumes that there is a finite supply of money - and the CPA is the only way to get the $200.

I do not see why you should accept $200 now for a $500 total payment (in a 12-18 month timeframe) and call it good business.

IF you've got a lead funnel that's that good that you can turn $200 to $500 then you should be getting a business loan for the cash (even at 8-10%pa) and using that instead as the cost of funds is much cheaper.

You should STILL be taking the rev-share and maximising revenues - it'll easily cover the costs of that business loan. And to be quite honest - most affiliate businesses are a cash cow after the breakthrough year aren't they?