Rev Share vs CPA strategy

[Sherlock]

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

If you have enough players it is not. The bigger player base of affiliate program the smaller are swings. At bet365 (where I still make more than all others combined) for last 18 months after my account closure I have swings within 10% of average. Law of large numbers.

But that is why we all talk based on different experiences. Small affiliates either have 0 or 1 whale and they see very different worlds (I bet many small affiliates did the same things, but the lucky ones who caught a whale went fulltime, while the ones who got 0 went back to 9 to 5 thinking they were doing something wrong). Middle affiliates have whale up and there and have those crazy swings. Larger affiliates have the steady income.

[MMM]

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.

Yes, but that should be judged on per program basis. Some programs you can send them players and miraculously 3 years after you still have exactly the same earnings as on the second month. On others you see how the value grows month by month, year by year.

[baldidiot]

I've thought about this many times - especially as programs shut down or exit markets. But each time I look at the numbers CPA just doesn't make sense, even with programs that have shut it usually works out that we made more with them on rev share prior to the closure than we would have done on a CPA.

This was a few years ago though back before all the admin fees started being added. Could be different now.

[PROFRBcom]

I've thought about this many times - especially as programs shut down or exit markets. But each time I look at the numbers CPA just doesn't make sense, even with programs that have shut it usually works out that we made more with them on rev share prior to the closure than we would have done on a CPA.

This was a few years ago though back before all the admin fees started being added. Could be different now.

Based on the lifetime player values that some of our operators have provided us with along with what we see ourselves, versus the CPAs one can typically command, I can not help but agree. A program would have to end in the first year or two to not equal the CPA value in many cases as far as I can tell in order to come out ahead vs RS.

[baldidiot]

Based on the lifetime player values that some of our operators have provided us with along with what we see ourselves, versus the CPAs one can typically command, I can not help but agree. A program would have to end in the first year or two to not equal the CPA value in many cases as far as I can tell in order to come out ahead vs RS.

Funny you should mention that time frame as I nearly made the same comment but the deleted it as the info was a bit old. Last time I checked for most programs we only needed the rev share to continue longer than 12-15 months to be more profitable than CPA.

[Triple7]

I've thought about this many times - especially as programs shut down or exit markets. But each time I look at the numbers CPA just doesn't make sense, even with programs that have shut it usually works out that we made more with them on rev share prior to the closure than we would have done on a CPA.

This was a few years ago though back before all the admin fees started being added. Could be different now.

Then the CPA is too low. If operators are not willing to pay a realistic CPA, a hybrid deal could be the middle way.

[gil.langelaan]

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.

That's a very grim vision of the future you have there

[Strider1973]

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.

Small affiliates either have 0 or 1 whale and they see very different worlds (I bet many small affiliates did the same things, but the lucky ones who caught a whale went fulltime, while the ones who got 0 went back to 9 to 5 thinking they were doing something wrong). Middle affiliates have whale up and there and have those crazy swings. Larger affiliates have the steady income.

Even though the subject is old, this thread is gold in order to understand our business.

PROFRBcom nailed it with his numbers, it's really about whale hunting and getting lucky in doing so (or just by delivering thousands of RMP to force your luck). And because there are so few whales (at best 1%, rather 0.1%, depending on what "whale" threshold you set), the statement of Sherlock is absolutely true. Luck is not only important for our players, but for ourselves too, at least as long as you don't have a huge player base.

On-topic: Go with Rev Share unless you are very short of cash or you expect the program to stop paying you within 1 year.
Think of it like this: Rev Share is fairer, as you get a share of the revenues you generate. On CPA, you either get overpaid if you bring too many low-value players, or you get underpaid if you bring many highrollers. Both cases are not good for you.

[JamieG1981]

It's also important to know the value of your traffic, when I was starting out I had no idea about CPA and Hybrid deals. So I was always working on revenue share.

When I started I was advertising a lot on social media pushing enhanced football offers. I can remember pushing Betbright offers and signing up 2500+ players over the course of a few months.

At the time was really excited about it, however the value of these players was garbage and never really earnt anything from them.

Off course if I could go back now I would have got a CPA for sure and made a lot of money from those players.

Sent from my SM-G960F using Tapatalk

[GG-US]

Split between both.

Programs run different deals, tracking and rig stats for affiliates differently.

As long as you know your average revenue for traffic sent, it's pretty easy to look at a report and decide if CPA or Rev share would earn more money during a 30 day period for different programs.

[Sherlock]

After 30 days my revenue share is usually around zero and often in minus, mainly because of bonuses I assume. It takes longer to level up rev share and CPA. And for revenue share it takes years to show the power unless you are very lucky.

[Strider1973]

As long as you know your average revenue for traffic sent, it's pretty easy to look at a report and decide if CPA or Rev share would earn more money during a 30 day period for different programs.

Unfortunately, it's not that easy.
You must know the lifetime value of a revenue share player and compare that value to the CPA commission you would get.
And you cannot look up the lifetime value of a RS player anywhere in an affiliate backend.
To calculate it, you must have access to a lot of data on a year + player level: when were the players acquired, and how much have you earned from them since the first deposit. Over time, the number of active players aquired in a certain year in the past goes down. But you still earn money from the (fewer and fewer) active players from that year. And then you have to estimate, based on their data, how much they will generate in the future.
Sherlock mentioned it here for Bet365 a couple of months ago. A simple calculation could be to multiply the yearly revenues of the old players by 0.9, or 0.8. This gives a rough multiplyer of around 5. So ok, you can take your average monthly rev share revenue (generated by new players only!) and multiply it by 60 and divide it by the average number of RMP referred, but it's not easy and not accurate at all. And we didn't even take into consideration the acquisition of a highroller which will completely change the calculation, an event that happens only once for every 100 or 1000 RMP referred...

So don't waste your time on calculations. Take what most here said (and what I think, too) that the LTV of RS player is >> CPA. And that's why I said above: "Go with Rev Share unless you are very short of cash or you expect the program to stop paying you within 1 year.".

[GG-US]

After 30 days my revenue share is usually around zero and often in minus, mainly because of bonuses I assume. It takes longer to level up rev share and CPA. And for revenue share it takes years to show the power unless you are very lucky.

Too many affiliate managers have admitted to shaving revenue share after leaving certain programs, it's just a bad idea to only go with RS as a method of earning money from your traffic.

If 100 clicks to each program averages $1000 on a site per month, a RS deal that earns $20 every month has a couple months to show similar value to the others on a site. If it doesn't earn anything just move to $10 cost per click deal, $200 CPA (with a 10% conversion guarantee) or the program can get a different affiliate to send them traffic. Its no REAL loss to stop sending traffic to a turd of a program.

[Sherlock]

So I made money with a bad idea constantly for a decade +?
The problem is that no one wanted to pay me higher than low 4 figures CPA and that are the numbers that matched the revenue share. No one paid even high 3 figures.
Even most programs that steal do not steal 90%+. The reason why to go for CPA now is that you think they will. It certainly is an option. Or that they selectively detag highrollers (which is the right way to steal).

The decision CPA vs rev share is really just function of:
1. theft factor
2. longevity factor
3. how much they hold your balls hostage with playerbase you already have there [this is probably very hard to explain to CPAonly guys]

For me the factor 3. is now decisive. I am delivering traffic for nothing to programs that steal even 90%+ as long as they pay me. It is still much more than starting over with them with CPA for example. They are happy to steal from me and I am "happy" to be paid one more month. That is the equilibrium. For starters the advice is: if you can, choose reliable program. For sports: Bet365 if you can. Bettingpartners, 5dimes, SIA. In Europe 1xbadkarma. Or written deals with national operators if you have so much free time. In UK the option is suicide.

[baldidiot]

Then the CPA is too low. If operators are not willing to pay a realistic CPA, a hybrid deal could be the middle way.

What kind of numbers are you getting with CPA though, I've not really heard of $400$/500+ CPAs since before black friday.

[Triple7]

Also with CPA, it's possible to shave or scam.

[casinozentrum]

All operators are aware of possible scam by giving a new source a CPA Deal. But most of them are trained and know how to decrease the risk for them (for example BaseLine / FTD cap etc.). As there are many scammers outside it is hard to get a good deal from the beginning. But for everyone who is taking it serious, it should be easy to increase deals after you showed them your traffic and your player value. Operators are paying high CPA's for a good player value, since it is easy for them to get the money back and after they paid your CPA they can profit from the player by 100%. So I would suggest everyone to focus on hybrids as you will have "lifetime" profit for the players you are bringing.