Revenue Share vs CPA for New Affiliates

June 29, 2011 - by admin · Filed Under Uncategorized Comments Off on Revenue Share vs CPA for New Affiliates 
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    Revshare vs CPA for New Affiliates in Gambling

    I’ve become a little addicted to adding content on this blog.  But I pretty much enjoy writing my opinions/ideas on it so here’s another article about whether to choose CPA or revenue share in gambling affiliating.

    First of all, as a new affiliate you’ll recognise that not all programs will offer CPA deals.  For example, neither William Hill not 888 Poker promote CPA deals on their affiliate program to new affiliates. However, just because they don’t overtly advertise lucrative CPA deals doesn’t mean that they don’t offer them.

    As you gain experience in affiliating you find that CPAs can be negotiated; you just need to negotiate and speak to an affiliate manager.  The bigger and higher number of players you can sign up – or the more prominent positions that you give them, the more likely you’ll be offered CPA terms.

    Which is Better: Revenue Share or CPA?

    I’ve now split up the Rev Share vs CPA argument into three markets: Online Poker, Casinos and Sports Betting, since the average player value differs between theses activities.

    Online Poker

    Personally, I would always go with a $100+ CPA in online poker over any type of rev share plan.  I’ll also grab my hand at any $150+ CPA that a poker room operator offers.

    The reason for choosing CPA over rev share is that I personally believe the average player value is lower than this.  While it’s true you’ll occasionally get players deposit $500 on a monthly basis and earn you $300+ per month in commission (for example, one out of ten depositors), you’ll also get so many players making the minimum deposit and only making you $10 lifetime commission.  I’d take a $100 CPA over $10 rev share any time with these players, even more so if you’re a newer affiliate.

    Secondly, rev share in poker has a lot more risks.  Even if you get a regular poker player on your books he’ll eventually leave somewhere else for 30% rakeback, and even if he doesn’t there’s a chance that the poker room could terminate their affiliate model with you (or more likely they’ll increase player costs) because of the instability in the business.  This will eventually reduce your potential earnings.

    Although it used to be the case that if you managed to sign up a poker player at a top poker room such as Full Tilt Poker or PokerStars you’d have a player earning you $100+ per month for life, the instability in the poker business makes it too risky and frustrating to live with.

    Online Casinos

    The casino business (especially slots) is where the majority of the money in gambling affiliating is to be made.

    The average real money casino player will probably be depositing $200 (from my experiences) and if we say that you’re on a decent 40% revenue share model than you can easily expect to scoop $80 off these players month by month.  You’ll also get the occasional player (let’s say one in ten) who’s depositing $1,000+ and earning you $300+ commission per month.

    As you can tell, revenue share seems to be the right way to go about doing business with casino affiliating.  The cross-over casinos (I mean the ones that offer sportsbook, games, bingo, poker etc as well) will be the highest since they’ll keep players active.

    That being said, I would still take a $200 CPA (with easy conditions) in casino affiliating, especially as a new affiliate.  I don’t think that it’s wise to RELY on the revenue share model until you’re getting a good dozen or so new depositing players every month.  If you’ve not got to this stage yet you’re affiliate income will be too unstable and skewed.  I’d rather take the instant $500 with a few depositing players as opposed to taking a gamble on how much money they wager (with a high risk of making less than $200 from them all).

    Finally, some casinos such as Bodog Casino offer terrible CPA terms for a small $75 CPA.  Bodog’s terms state that your player has to make a minimum deposit by the end of the calendar month to in order for you to earn a CPA.  If they don’t deposit than you’ll lose the player completely.  Thus, if a craps player signs up on the 30th and deposits $10,000 on the 1st of the next month then you’ll lose the player and won’t receive a CPA.  HARSH!

    You should never accept these “expiry date” CPAs.  In  Bodog’s case, the $75 CPA for new affiliates is half of what you should expect to be receiving anyway in my opinion.

    Sports Betting

    Again, just like online poker, I’ve not had much success on the revenue share model of sports betting.

    The problem with sports bettors is that most players will only be depositing $50 – $200 spread across a few months.  This limits my income from each to player to around $50 total on a standard rev share deal and it makes the instant $100 or $150 CPAs much more enticing.

    Seriously though, although I get a handful of sports bettors depositing $1k+ each month, I also get so many recreational bettors making the minimum $30 or $40 deposit for the “£20 free bets bonus”. I’m extremely happy to be receiving a $150 CPA for these little guys.

    Conclusion

    From my own experiences, I’ve always preferred to promote a mixture of CPA and revenue share programs on my site.  This allows you to receive the best of both: you get the instant funds from the CPAs whilst investing in your future with life-time revenue share models.

    Having revenue share at a few casinos is also a great way of calculating the average value of your players and comparing the CPA vs revenue share value of your players.

    Finally, there will be some cases like I mentioned above where it’s a mixed bag between revenue share and CPA.  If you’re undecided as a new affiliate than I would always go with the instant CPA since this allows you to invest more in to your business.

    Although it’s great being on rev-share – since you’re on a passive income basis that keeps growing (regardless of whether you pick up any new players or your sites get penalised) – you need to bear in mind that you’ll need a good volume of players to see a stable income.

    Also, one bad month on revenue share can wipe out your entire earnings for 2+ months (e.g. if a casino player wins some jackpot or takes the casino for $20k+).  This is why no-negative carryover is really nice for casino affiliates.

    Other Resources on this Topic:

    • http://www.affiliatebible.com/poker/cpa-vs-revenue-share.php
    • http://www.newpokeraffiliate.com/general-affiliating/cpa-or-revenue-share/

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