Rev Share vs CPA strategy

[555]

I have only been on a Rev Share commission model since I started my affiliate business.

However, recently I have started to think more about the CPA model. The reason behind this is that many casinos turn rogue in one way or another. Some casinos break our original agreement with added fees which makes the terms so bad so it is time to drop them (Videoslots who added a 25% admin fee on GGR in secret and still denies it). Some other programs like Kindred adds some minimum activity clause and closes down large affiliate accounts that are old = life time revenue is not really life time anymore. Other programs go plain rogue and screws their affiliate over in one way or another (like the re-tagging scandal at Betsson for instance). It sucks to loose thousands of players over a night.

Promoting new casinos is always a gamble since they can close down / go bankrupt at any time and then the affiliate's player pools are worth 0 (like Codeta/Ihre did). Others merge which can turn everything upside down for the affiliates.

It is kind of a gamble to be on a rev share plan these days. You never know how long you can count on the income to continue or when you will be cut off because of greedy casino owners. So my question is when is it better to be on a CPA plan? Always with not so established casinos? Go with your gut feeling?

I mean, does anyone really believe that some random BuzzyVegasQueenBetCasino.ru (or whatever) will stay around for long? Of course it might be better not to get involved in shady casinos at all but even in regulated markets (UK, SWE) there are better and worse casinos.

What does life time revenue mean for you? 1 year? 3 years? How do you protect your income from rogue/greedy casinos that only has growth in mind (even if that means screwing the affiliates over)?

[eenzoo]

This question is old as affiliate marketing itself. From 90% of affiliates you will get a clear answer: don´t do CPA. Because you will lose money, you can't participate on the famous whales etc, etc. But I would guess 90% of the 90% are biased, just repeating what they have heard from other without reflecting (calculate) it on her personal situation, don`t keep books or are just (whale) dreamers.

If you have constantly a significant amount of quality traffic you should consider CPA as a mix in your monetarization strategy for sure. You have mentioned a lot of reasons above and they are some more. eg. a hedge against negative Revshare accounts.

But the point is you need to calculate your CPA (amount) requests wisely. You need to know your traffic. You NEED to deliver quality, otherwise, you end up after 3 months with a closed account and without payments. Personally, I agree on CPA deals only with operators who know my traffic from running RS deals. Consider your average player value, your verticals (i can speak for casino only), the legal situation of your market is important, and keep your promises. That way CPA is a smart solution to boost or at least secure your income on a higher level.

[Sherlock]

There is information asymmetry. With CPA only they know if it is worth of the traffic. If it is they keep it going. If not, they kick you out.
With revenue share - in theory - the value of players is known and shared.

Cheating can occur with CPA as well.

What does life time revenue mean for you? 1 year? 3 years?

That means until they start to steal obviously.

How do you protect your income from rogue/greedy casinos that only has growth in mind (even if that means screwing the affiliates over)?

If you are asking how do I protect my affiliate income, then there is no protection. We are all in the last stage of cancer, so it is very funny that nearly everybody is still refusing that. It reminds me a pro gambler community few years ago, when real player profiling started and they all refused it as well.

If you are asking me how I am protecting my income, then I do not, I do not have other income comparable to affiliate marketing. I am happy I made decent money until now. If you have no decent savings then you should very fast look elsewhere. Where? I have no idea tbh.

[Vargoso]

OFC we think rev-share models are the best ones, but that is because our objective market is good for it, you need to consider loyalty, the players' type, etc.

For example, CPA models are good if you have a new site and need liquidity, or if you target a market with lots of small stakes players maybe.

[Sherlock]

If you have small stakes players then nobody wants to give you CPA once they see that you have the shitplayers.

[eenzoo]

Where? I have no idea tbh.

Become grey/black market operator (US, Asia)?
Opening a brothel?
Going the traffic way (non-gambling CPC network)?

[Sherlock]

Just option 2 can be taken seriously.

[MMM]

I do think that mixing is a wise choice. The rev-share idea sounds very nice but in reality i don't really understand why 90% are so sure that's the way to go. It became even more true with all the fees the programs impose.
I have few programs where according to their stats my average earnings were X and i had no problem negotiation CPA of X+50. And it's been running for 2 years now. My only explanation is that they take so much on fees that my real player value is in fact X+100

In any case, it various from one affiliate to another - model, traffic, market. For example not taking some part in CPA or at least hybrid on AUS market is just stupid. And there are other examples.

The best way - test the market. Some programs won't go this way. They other will. Analyze their stats and see if it's worth it.

[MMM]

If you are asking how do I protect my affiliate income, then there is no protection. We are all in the last stage of cancer, so it is very funny that nearly everybody is still refusing that. It reminds me a pro gambler community few years ago, when real player profiling started and they all refused it as well.

Hey Sherlock, you are probably the member i most appreciate his posts, but i disagree in that case. I heard gambling is over in 2006 while not being an affiliate. Then read that it's too late to join the party. Then I decided to become an affiliate and so far the world didn't come to an end.

Not saying things aren't getting tougher. That the tracking is horrible and all that. But i doubt that's the end. It's a change. and if you are able to adapt you will be able to make money.

[Sherlock]

Real lifetime player value in fact is something like way over X+1000 in the first world on average. That is the bottom line.
So if you got revenue share at bet365 or bovada 5-10 years ago only for part of your players, you made it up many times (compared to any CPA).

The question is what to do now. I suppose it does not matter much. Everything will be just peanuts.

[Sherlock]

Hey Sherlock, you are probably the member i most appreciate his posts, but i disagree in that case. I heard gambling is over in 2006 while not being an affiliate. Then read that it's too late to join the party. Then I decided to become an affiliate and so far the world didn't come to an end.

Not saying things aren't getting tougher. That the tracking is horrible and all that. But i doubt that's the end. It's a change. and if you are able to adapt you will be able to make money.

No need to apologise, this is not facebook, I am not mad.

I do not agree. This is the end. Yes, if you can adapt and be really big, super mega big, so you can have influence over politicians, then it is not the end.

But this market got monopolized and divided.

I am making peanuts in future revenue compared what it used to be (recent revenue is ok, but that makes no sense to consider) and most of my job is just compliance to programs, google and such.

Just few more hits like today and I will park domains and goodbye. My close competition did just that. Not that I have a problem with retirement. Some money will be always possible to be made here, but the revenue is no more extraordinary + costs go up by order of magnitude (my devs de facto work only on things connected to compliance not on new things which are just postponed and postponed).

If you guys have normal affiliate portals, wait for next Google updates where Google will block all your banners and links in Chrome for example, because ... because he can and therefore he will. And this is just one of many pitfalls.

Or I bet half of the programs I promote had tracking problems in 2018. From that half was more than half conversions lost I am absolutely sure. Some programs kicked me out because of quotas were not fulfilled or I told them fo after they stopped paying (tipico and pinnacle, ladbrokes and betsson are next ones coming soon..). 2019 will be worse, 2020 even worse. How you want to adapt to idiocy? It is not possible. AMs are younger and they understand less and less not more and more. Will this get better? No.

Btw I also had 1st site in 2005 and affiliate 2006. Fortunately I did not listen to those who were telling it is late, because I was not understanding English by the time. But that is not the point. The point is all doomsayers will be once right, because everything will end some day. It is impossible to work if you have to have 100 licences in 100 countries/states, solve VAT, do KYC/AML every few weeks, understand all countries specifics, where breach of 1 is potentially deadly, have not working emails [no emails are 100% now because G monopolised email deliveries] and dozens of things like that where each month are new problems like this. To keep up with all this you really need a big company, that is highly ineffective and on the top it is really not the work we did before. Not even close.

[Cash Bonus]

I would personally go with rev-share all the way. You will get so much more out of it. It’s very rewarding.

[TheGooner]

The rev-share idea sounds very nice but in reality i don't really understand why 90% are so sure that's the way to go.

I can't speak for the 90% only for myself.

I'll show you the rev-share monthlies from my top 3 programs - despite very few current depositors in 2017, 2018 and 2019.
It's all based on rev-share from the "good old days" - pre-mobile, pre-ad blockers, pre-cookie munchers, pre-market withdrawal.

A CPA of $100, $200 or $300 would have been a tiny fraction of that value.

[Pokerface]

Depending on the program or it's reputation we may prefer CPA, at least initially. A mix of rev share and CPA is also a good option. Starting with CPA at the beginning with the option to renegotiate after a number of months would be good. In the end rev share will be best option.

[Triple7]

I can't speak for the 90% only for myself.

I'll show you the rev-share monthlies from my top 3 programs - despite very few current depositors in 2017, 2018 and 2019.
It's all based on rev-share from the "good old days" - pre-mobile, pre-ad blockers, pre-cookie munchers, pre-market withdrawal.

A CPA of $100, $200 or $300 would have been a tiny fraction of that value.

That's why I'd choose a hybrid deal. You'll get a bit of the value already after conversion, rest with revenue share. Some programs I've sent quite some players, but in the end, the conclusion was it's almost impossible to earn with them because of high fees, bad retention, etc.

I've also lost players because brands pulled out of a market, closed operations or had some kind of quota.

Does it solve all? No. Neither a CPA does. If programs want to scam you, they do, with RS, CPA, hybrid, etc.

[TheGooner]

If programs want to scam you, they do, with RS, CPA, hybrid, etc.

I think that's the key - find the best quality programs possible. Although these days nearly all programs think it's OK to retrospectively impose quotas .. making it tough to find good partners that stick to what they say.

I am working with Dan on an idea to sort that for a group of affs working together but whether that will payoff is unknown.

[Triple7]

I think that's the key - find the best quality programs possible. Although these days nearly all programs think it's OK to retrospectively impose quotas .. making it tough to find good partners that stick to what they say.

I am working with Dan on an idea to sort that for a group of affs working together but whether that will payoff is unknown.

I agree.

The difference between choosing the bad-performing programs and the best-performing programs is huge and thus key.

Most big players have quotas or will impose them in the future. Smaller programs won't, but with on-going regulations, there's always a risk a smaller brand doesn't apply for a license or surrenders its license in a regulated market. I think it's something to not underestimate. On-going regulation and decreasing growth in many markets in the future will have its effect.

Fairer t&c would help for affiliates. Problem is that likely programs will pay less than. Now many programs are offering loss-generating deals because they know they can get rid of the affiliate when they feel like.

[PROFRBcom]

This game is all about whale hunting. For every 1,000 players you sign up, maybe 400 deposit. Of those 400, 300 of them are small one time depositors who you might make $1-$5 off of. Of the 100 remaining, 50 of them are slightly better small depositors who redeposit and you might make $10-$20 off of them. Of the 50 left, you'll get 40 medium depositors who net you $100-$300 in profits and maybe a grand or more if they redeposit.

And then there are the big depositors. 4 figure depositors. You'll make $500 or more off of them most likely. Some will redeposit and you can expect 4 figure paydays over their lifetime.

And out of that 1,000 players, there is ONE WHALE. He or she may make you as much as 990 of the other players combined. A friend of mine was bragging about a whale they bagged recently. I'm not going to provide a screenshot because it would give away too much information, so you'll have to take my word on this, but what they showed me was the deposits of this player since they signed them up last year:

August 2018 - 7k USD
Sept 2018 - 17k
Oct 2018 - 17k
Nov 2018 - 54k
Dec 2018 - 104k
Jan 2018 - 90k

A big casino whale. My friend had earned as much as 36k USD in a single month off of that one player.

Had they been on CPA, they would have gotten maybe $200 for this player. Granted, they would have gotten more than their lifetime value for many of their other players in the lower rungs of the equation, but also they would have failed to qualify for a CPA payment for most of the small fry one off depositors too.

Would they have come out ahead on CPA or Rev Share? Well, it's a matter of knowing the value of customers. Everyone's business is different and I can't answer that because I don't know what their average player values are or truly what kind of volume they do. But my gut tells me that RS pays out more in the long run (if you pick quality programs who cheat less than the norm).

[econfox]

I can only speak for myself and I have made more off of rev share than I would have on a CPA model. It is all about the numbers. If it takes 50 depositors to get one whale then you have to look at how many customers you can acquire. Look at the income of the market you are in. Is it a low income country or a high one.

The hardest part of rev share is getting to the point you have enough customers to minimize the income swings each month.

Become grey/black market operator (US, Asia)?
Opening a brothel?
Going the traffic way (non-gambling CPC network)?

Once you go grey you never go back.

[Sherlock]

This game is all about whale hunting. For every 1,000 players you sign up, maybe 400 deposit. Of those 400, 300 of them are small one time depositors who you might make $1-$5 off of. Of the 100 remaining, 50 of them are slightly better small depositors who redeposit and you might make $10-$20 off of them. Of the 50 left, you'll get 40 medium depositors who net you $100-$300 in profits and maybe a grand or more if they redeposit.

And then there are the big depositors. 4 figure depositors. You'll make $500 or more off of them most likely. Some will redeposit and you can expect 4 figure paydays over their lifetime.

And out of that 1,000 players, there is ONE WHALE. He or she may make you as much as 990 of the other players combined. A friend of mine was bragging about a whale they bagged recently. I'm not going to provide a screenshot because it would give away too much information, so you'll have to take my word on this, but what they showed me was the deposits of this player since they signed them up last year:

August 2018 - 7k USD
Sept 2018 - 17k
Oct 2018 - 17k
Nov 2018 - 54k
Dec 2018 - 104k
Jan 2018 - 90k

A big casino whale. My friend had earned as much as 36k USD in a single month off of that one player.

Had they been on CPA, they would have gotten maybe $200 for this player. Granted, they would have gotten more than their lifetime value for many of their other players in the lower rungs of the equation, but also they would have failed to qualify for a CPA payment for most of the small fry one off depositors too.

Would they have come out ahead on CPA or Rev Share? Well, it's a matter of knowing the value of customers. Everyone's business is different and I can't answer that because I don't know what their average player values are or truly what kind of volume they do. But my gut tells me that RS pays out more in the long run (if you pick quality programs who cheat less than the norm).

This was discussed many times, the schema was explained over and over again, and here once again. This should be sticky probably. This is the economy of gambling affiliate. Or this was the economy until now and that is the problem.