The numbers behind a CPA deals

[Casinorep]

I've recently started doing CPA deals along with revshares, and I must say it's a weird economy - so hopefully the affiliate managers can help me understand how it works here.

As I'm offered a fixed price per bounty, I am incentified by my affiliate managers to have my CPA rate in parallel to FTD volume increase. Yet in the normal law of supply and demand, larger quantity dictates lower unit price (not that I complain at all and will be glad to charge more hahah). But for me when I pay in larger quantity of something, I usually bargain down the price per unit, not upward.

Is it because the law of probability is being applied here when it comes to running a gambling operation, where larger volume yields the probability of higher ROIs, even at higher unit costs?

[Renee]

I've recently started doing CPA deals along with revshares, and I must say it's a weird economy - so hopefully the affiliate managers can help me understand how it works here.

As I'm offered a fixed price per bounty, I am incentified by my affiliate managers to have my CPA rate in parallel to FTD volume increase. Yet in the normal law of supply and demand, larger quantity dictates lower unit price (not that I complain at all and will be glad to charge more hahah). But for me when I pay in larger quantity of something, I usually bargain down the price per unit, not upward.

Is it because the law of probability is being applied here when it comes to running a gambling operation, where larger volume yields the probability of higher ROIs, even at higher unit costs?

To answer your question basically, yes.

The higher the volume the more chance that the players who do not qualify for a CPA will make up the cost of paying for the ones who do but don't deposit enough to cover costs.

For example, if you send 100 players and 80 of them qualify for the CPA, but half of the ones who qualify only deposit the minimum to qualify and never deposit again, the 20 who deposit but do not qualify (along with those who do qualify and deposit more than the min) will hopefully deposit enough to make up the cost of the ones who never deposit again.

There are other factors too, but that is the very basic part of it.

You can't expect that a program will keep paying X times the minimum deposit amount for players who are only depositing once. That's not profitable for the program.

You might say it's not fair that there are players not being paid for because they are not qualifying for the CPA (perhaps they are not unique etc so don't qualify), but that's why I'd recommend revshare instead of CPA.

[Casinorep]

To answer your question basically, yes.

The higher the volume the more chance that the players who do not qualify for a CPA will make up the cost of paying for the ones who do but don't deposit enough to cover costs.

For example, if you send 100 players and 80 of them qualify for the CPA, but half of the ones who qualify only deposit the minimum to qualify and never deposit again, the 20 who deposit but do not qualify (along with those who do qualify and deposit more than the min) will hopefully deposit enough to make up the cost of the ones who never deposit again.

There are other factors too, but that is the very basic part of it.

You can't expect that a program will keep paying X times the minimum deposit amount for players who are only depositing once. That's not profitable for the program.

You might say it's not fair that there are players not being paid for because they are not qualifying for the CPA (perhaps they are not unique etc so don't qualify), but that's why I'd recommend revshare instead of CPA.

Well my CPA deals don't have minimum deposit requirements at all. But I do feel more stress in hoping that my players lose more so that my partners can justify prolonging my bounty rate per your explanation, which is basically the 80/20 rule.

Thanks Nee Nee for the explanation.

[Renee]

My pleasure

I wouldn't feel stressed. They will offer you what they think your traffic is worth, and if it doesn't work out they will negotiate an amendment or cancel the deal (after they pay what you're owed if they are reputable and your traffic is not fraud).

Good luck!

[Miles_Videoslots]

Im not a Fan of CPA at all its not a good model for affiliates .In short its quick cash flow to develope your traffic and quick cash in the pocket yes , but you lose the value of your players should one or 2 of them go on to be big spenders.

On Rev Share at least you know that if a casino does the job its meant to do an retain players then your income will stay steady over a longe period of time.

I would rather do Hybird type deals with a bit of both included that way you dont get as high a CPA but it is some cash back in your pocket should the players bring your rev share into a - , then at least youd still get something out each Month.

[Casinorep]

Im not a Fan of CPA at all its not a good model for affiliates .In short its quick cash flow to develope your traffic and quick cash in the pocket yes , but you lose the value of your players should one or 2 of them go on to be big spenders.

On Rev Share at least you know that if a casino does the job its meant to do an retain players then your income will stay steady over a longe period of time.

I would rather do Hybird type deals with a bit of both included that way you dont get as high a CPA but it is some cash back in your pocket should the players bring your rev share into a - , then at least youd still get something out each Month.

That's exactly my M.O., CPA first to gauge traffic and then negotiate to a high revshare to catch those big whales.

[Triple7]

Im not a Fan of CPA at all its not a good model for affiliates .In short its quick cash flow to develope your traffic and quick cash in the pocket yes , but you lose the value of your players should one or 2 of them go on to be big spenders.

On Rev Share at least you know that if a casino does the job its meant to do an retain players then your income will stay steady over a longe period of time.

I would rather do Hybird type deals with a bit of both included that way you dont get as high a CPA but it is some cash back in your pocket should the players bring your rev share into a - , then at least youd still get something out each Month.

I was a "RS"-fan, but I am switching now to hybrid or just CPA. It depends a bit on the brand. With a great retention and on-going operations, RS is ideal, but unfortunately many brands around:

- are not having a good retention, it's just like throwing water in a colander instead of a bucket
- are charging insane fees or aren't clear about their fees at all
- are changing their terms retro-actively, not in favour of affiliates
- are closing down operations or affiliate programs
- NCO in combination with many winning players or big winners

This all makes that sometimes it's better to get some cash on the nail, even if in most optimal circumstances RS would pay better on the long run. Simply because optimal circumstances do not exist with many brands.

[rdoroshenko]

I was and still is the rev.share fan, but I must say that last three months I saw a better results (I mean the revenue) doing hybrid deal CPA+rev.share.

[paulpuolakka]

Depends of the brand ofc, as mentioned in this thread if you see that they have good retention and the brand is converting then definitely RS or Hybrid.
If you see that the value is not just there and the retention doesn´t work I would go for CPA if I were affiliate.

As many other Affiliate Managers I also get new affiliates asking CPA, from operator point of view if the affiliate or their traffic source is not known to us it´s very hard to justify CPA. As operator and affiliate point of view is always better to start the cooperation first with revenue share and after few months data check what would be mutually beneficial.

[Aidan90]

I avoid strictly CPA deals because of the thought of landing a whale who earns big money and being rewarded nothing but the CPA for it!

Hybrid deals are the way to go in my opinion, best of both!

[Mike13]

I like CPA and revenue share. Cpa is great when you are in the first year in the affiliate world. The Flat Fee Sponsorship is great too for the best positions on my sites. I will try Hybrid deals in the future.

[Alex_PlayAttack]

I was and still is the rev.share fan, but I must say that last three months I saw a better results (I mean the revenue) doing hybrid deal CPA+rev.share.

Hi Roman,

How do you like an idea to split test CPA and rev. share?

[rdoroshenko]

Hi Roman,

How do you like an idea to split test CPA and rev. share?

As I told before, I'm fan of rev.share and in rare cases the hybrid deals. I know the price to my traffic and won't go bold CPA with it.

[Pokerface]

There is always a good discussion regarding RevShare or a CPA commission model. Personally I believe RevShare is good if you know the program and you know they are reputable.

When considering RevShare you need to be aware of performance quotas or minimum activity quotas. You could be doing a lot of work and suddenly your RevShare could be dropped to a very low percentage. Be sure to thoroughly read through the T&C’s of the program.

If you are uncertain about the program and want to minimize your risk then a CPA deal may be a better option. RevShare is a preferred longer term arrangement for programs you know well however if in doubt a CPA may be a better option initially. With a CPA deal you are rewarded immediately and not subject to the risks of changing T&C’s as much.

[MMM]

I am like Triple7. Now with the various hidden fees, there are many programs that I won't work strictly on rev-share. Tired of seeing XX players, xxxxx deposits and then xx-xxx in my earnings.

Of course, there is no better deal per sey. It depends on the program and on affiliate business nature (for example having employees that need to be paid each month or looking to have instant cash to invest back in the business).

[Renee]

I avoid strictly CPA deals because of the thought of landing a whale who earns big money and being rewarded nothing but the CPA for it!

Years ago when we had the 10c per click model, an affiliate sent a player who lost 1 mill in the first month they were playing with us.

The affiliate got paid 10c.

Just one example. It only takes one big player.

[eenzoo]

Years ago when we had the 10c per click model, an affiliate sent a player who lost 1 mill in the first month they were playing with us.

The affiliate got paid 10c.

Just one example. It only takes one big player.

Uuups!

[Casinorep]

Years ago when we had the 10c per click model, an affiliate sent a player who lost 1 mill in the first month they were playing with us.

The affiliate got paid 10c.

Just one example. It only takes one big player.

You're using an extreme example. But in this case, an unscrupulous program will just untag you and keep the profit to themselves - which is one of the risks associated with revshare like many stated here. (Yes player untagging is a lot more rampant than many choose to believe).

And we're not talking about "1c" payout here, but rather a high three figure CPA rate without minimum qualifiers, paid for every new depositors.

[Renee]

You're using an extreme example. But in this case, an unscrupulous program will just untag you and keep the profit to themselves - which is one of the risks associated with revshare like many stated here. (Yes player untagging is a lot more rampant than many choose to believe).

And we're not talking about "1c" payout here, but rather a high three figure CPA rate without minimum qualifiers, paid for every new depositors.

I am using an extreme example, but take some zeroes off it and it still happens every day.

As an example, a few of our brands are pushing the mega moolah jackpot as the sign up bonus. Imagine sending a player there who you were paid $250 bucks for who ended up winning a few mill? I wouldn't want to be that affiliate.

[Triple7]

For that, I prefer hybrid instead of pure CPA.

Chances of getting that one big whale are small, but it happens of course and you don't want to miss it. What happens way more than getting those whales is losing income because of bad retention (or no retention at all), increasing fees, closing operations, leaving countries, big winners that trash the monthly income from a brand, cross-selling, etc.

It happens that in January a brand is asking for pushing a market and in February or March, they leave there.... Or that players are not responded well. I do tests with the helpdesk for example while playing for example. The way they're acting, logical that players won't back.