Negative Carry Over & its Impact.

[cmdenny]

I am currently chatting with two operators, one is offering 30% with negative carry over, and the other 25% with no negative carry over. I won't say the relative sites, but funnily enough both have similar colour schemes and operate in similar areas.

As it happens one is a better recognised brand than the other, and potentially a better prospect. However for the sake of argument if both had identical products which of the two would be the better deal on paper?

[pokerente]

Simple:

Just take the one without NCO. That's it.

[AWH-Gemma]

Simple:

Just take the one without NCO. That's it.

I agree 100%

[Simmo!]

I don't

The brand is important, the longevity of the operation is important and both of those contribute to player retention which should ultimately be the single most important factor in your consideration.

If the NCO one is a big brand (ie: a bookie) or one you hear converts & retains very well, then personally I would seriously consider it. Plus, many NCO programs will provide some concessions on NCO if you ask - ie: winner ringfencing etc - if you deliver traffic and properly promote them.

Or in a nutshell: when deciding who to promote, I'd advise you ignore commissions completely and look at how they manage players first and foremost. Once you have that sorted, you'll be working with casinos/poker rooms etc who manage and retain the players you send well which gives your business a stable base, THEN you can look at commissions, by which time you may be in a better position to bargain.

You also run a risk with any smaller organisation that one day they won't be around and your earnings will stop overnight.

It's the old adage: 1% of something is better than 100% of nothing.

GL whichever way you go

Simmo!

[TheGooner]

If we put aside the good points that Simmo has raised about actually considering your player, and which program will fit better for your demographics (very good points BTW) and just look at the financials ...

It also depends on the size of your operation - and the number of active players that you are likely to bring in.

If you only have 5,10,20 active players at any time at a "Typical Program" that you advertise then you do have a reasonable chance of running into a negative carryover situation about 20-25% of the time. (2-3 months a year).

In this case - I would say that financially the 25% no NCO site is better for you.

However, if you think that you can get 50-100+ players actively playing at a site, then NCO is very rarely an issue ... the increased number of active players spreads the risk, you get a reasonable mix of winners and losers and negative months disappear pretty much.

In this case - with more active players - I would definately plump for the 30% with possible NCO.

But as Simmo has said - far better to go with the program that you would personally play at - as your preference is probably the preference of your players too. If that's close call - then you can consider the finances.

If you go for quality programs first - you will benefit in the long run.

[jctroy440]

No NCO..............Duh

[gillamano]

Go with no negative carry over and try to negotiate a better share revenue deal. Ignore the tables they show for revenue generated and the percentage you get. Most will put you on a better deal if you ask.

[CasinoTom]

Most affiliate programmes now offer no NCO now due to its massive detrimental impact on affiliates' commissions.

You can have a great month and 1 or 2 'bad days' can ruin all your hard work in one go which is bad enough, but it's compounded if you have to suffer this again the month after!

[EugeneK]

30% with NCO is very small amount.
In the beginning you need some stable money. So go with NO NCO.
Later you will be able to increase 25 to 30 or 35 or even 40%!

[wagerjunction]

I would also advise the 25% with no NCO.

As gillamano mentioned, you can always try to negociate for a better Rev Share. Maybe not at the start but if you do good as things move along, you can probably get an increased rate.

[graham]

I'd take the one without NCO because one big win could cost you forever, whereas the other way you are making less but its more guaranteed income.

[LiveCasinoPartners]

I've done some historical analysis of affiliates revenue using different scenarios.

If the program has a pure no-negative program with no "high roller" or better said "big winner" clause then the impact can be significant. There's been affiliates with one or two players who have won mid xx,xxx and lost it the next month. A pure no-negative carryover would pay a commission based on that players losses. The affiliate program has paid a significant commission with a net zero casino gain. This doesn't happen often, but it does. Under this condition the effect (using historical data for the last year and a half) was about 5% difference.

As Gooner mentioned, if there was a negative carry over affiliates with lower absolute affiliate count stand to be negative for months at a time.

Trust me, there is nothing more frustrating that having your carry over your negative balance. It's almost demoralizing. I personally would lose motivation if I had a negative balance.

So, to protect from losing valuable affiliates a no negative carry over is a good idea. In our case we had to adopt a "big winner" policy to remove the possible loss of a big winner. It's a win-win for the program and the affiliate. It's modeled more after a partnership. The overall impact is less than 2%, with affiliates not carrying over negative balances. 2% is a small cost to keep an affiliate from having a negative balance. After all, this is a tough business that's not as stable as I'd like to see it.

As Simmo mentioned, pick a brand that converts and retains better. I'm not too convinced you have to go to the biggest brand either. Larger brands could be more saturated and your traffic could already be players from that brand. That's why it's a good idea to provide multiple alternatives.

Again, like Simmo said 1% of something is better than 100% of nothing.

[mynuw]

I totally agree No NCO if possible. I am one affiliate who has been in a negative vacuum and its no fun.
Unfortunately I am not an affiliate who have the big spenders so one big win on a program with an NCO will suck the life out of you.

[ecobika]

It is very simple, the best way is to deal with the negative carry over. The message and the philosophy behind this: we are in the same boat, we have to communicate and try to do our best. Play the business hard, play the big picture or you will be burned.

[EugeneK]

It is very simple, the best way is to deal with the negative carry over. The message and the philosophy behind this: we are in the same boat, we have to communicate and try to do our best. Play the business hard, play the big picture or you will be burned.

we're not at the same boat.
somebody brings 100-200 players per mo, and smb 10-20
The difference is huge!

[ecobika]

maybe some misunderstanding, I mean the same boat with the firm (aff+firm).

[EugeneK]

maybe some misunderstanding, I mean the same boat with the firm (aff+firm).

Affiliate has 10 players per mo
Firm has 1000 players

where is the same boat?

No NCO is great term, especially for beginners.

[ecobika]

yes, agree not for beginners! The same boat: if you were the firm, would you like big winners eating your rev?

[EugeneK]

it depends on the elasticity of this strategy.
whether I will be able to attract a lot of players and affiliates in order to grade the influence of winners on big scales.

nothing extraordinary, just math.

[ecobika]

no, it is not so simple math, what would you choose from two possibilities, if you were the firm: (1) a big winner, or (2) 10 small loser? It is that simple. But from an other viewpoint: a big winner can win forever? I like big winners!