Revenue Share, CPA, CPL Hybrid – Which is the Real Winner?

A question almost as ancient as affiliate promotion themselves – what is the best commission structure and why?

For years affiliates, affiliate managers and gambling sites have been debating what the best affiliate commission structure is – and the answer is – there isn’t one. No matter how many people try and persuade you to take up one – the truth is that they all depend on the program and the genre.

For example – take Casinos. Many casino affiliate programs will pay you a revenue share between 25-40% of Net Revenue or offer you a cut based on turnover, and this is always a good option – but there are many affiliates out there who want cash now and will turn to the CPA option. Now long-term affiliates will blast them for doing this, and 90% of all affiliates will prefer revenue share, but the truth is – that’s not always the best choice.

Two years ago, when the average casino players LTV (Lifetime Value) was higher – 40% of say £500 would net an affiliate £200 and prove a good investment, but as of 2010, in the midst of a credit crunch where the LTV of many players has dropped, that same 40% might be a poor investment if the LTV suddenly dropped to £250 (£100). Why choose revenue share then when you could get a single CPA payment of say £75 and not have to wait a year to get your revenue. Or when some casino programs will offer you as much as $300 a player – why even consider Revenue Share in this climate?

Now I’m sure that many people will be screaming back Hybrid – where you can take a cut of the long term revenue and get a smaller upfront payment – and truthfully this is a good option too – you get your money back for PPC marketing and site costs upfront – and have the benefit of a long-term investment, but there are only a handful of affiliate programs out there that will offer you a decent enough Hybrid to make it worth your while. A measly 20% and £10 would barely cover a few Clicks on PPC and you would actually be better off choosing CPA!

There is a hidden gem however – take CPL. On programs such as Prime Scratchcards or King Jackpot – you can elect to get paid per Lead. This maybe only £3 or so – but this means that for every Free Registration you bring to the site – you get paid whether they convert or not – and in a time of heavy bonus players and Free Money seekers – this isn’t a bad idea. Say you bring in 50 Leads and only 2 convert – most sites might pay you about £100 or £150 at best, but if you were getting paid £4 a lead you would pick up £200 and walk away a happy man.

Hybrid CPL and Revenue Share deals are also available – so feel free to ask your affiliate managers about this and see if you can get something like £3 + 20% where you get paid for your Free Registrations and a cut of all those who convert.

So what programme is right for what gambling genre:

Revenue Share: Ideally this is good for well-established Casino and Betting sites. It is well-known that a good casino/sportsbook can keep its’ players well beyond a 12month LifeTime cycle and can prove profitable in the long run. This is also good for skill games who have a niche market of well-valued players and for Poker sites who do not offer rakeback

CPA: Perfect for Bingo Sites, newly-established casinos and Poker sites offering Rake back. Why take the risk holding out for a lucky player when you can cash in and use the money to promote your site further.

Hybrid: For any program this is a benefit with the right percentages. Look for deals upwards of £15 and 15% and you could be making a good profit in no time. Better on newly-established gambling sites where the player retention schemes have not yet been tested

CPL: Great for all sites that offer No Deposit Bonuses. These are a magnet for bonus abusers or free-money players that will not earn you anything and generally leave your revenue share in the minus figures. Take a quick fee and get out while you can.

Choosing Revenue Option For Poker Affiliate Programs

One of the most profitable niches for an affiliate marketer is with no doubt poker. If you have a poker site making money it is fairly easy, but make sure you are choosing the right commission model for your affiliate program; fixed commission, rev share or a combination of both. Use this fairly simple way of calculating which to choose.

Sending players to various online poker rooms is a lucrative business. Due to the very high competition, the poker affiliate programs need to offer very high commissions to attract new affiliates. For webmasters, this is as good as it gets.

The typical poker affiliate program offers variations of commission, making it possible for you to analyze your traffic and referred players, helping you choose the best model for you and your site. It is not always easy to know the break-even point for revenue share vs. fixed commission, but if you know your visitors, all you need is a calculator.

You need some information about the players you refer. This is sometimes hard to know, but usually you can use a rough estimate. The more information available to you, the better you will understand your players. Try to find out – or guess – the following:

Referred players average limit (player level)

Type of game preferred (limit/no-limit, stud, Omaha etc.)

Table size preferences (usually 6 or 10 players/table)

To find this information out, you can use any method available; a poll on your page isn’t a bad idea, one or a few easy questions will get many answers, making it easier to estimate the above details. There are numerous ways of getting to know your visitors, but that would be another topic, and therefore beyond the scope of this article. If you have no information about your visitors, or if you are yet to build your site, look at a few different levels (of limit games) to see the impact on your revenue. The same applies with table size and type of game, investigate and evaluate.

What you need to know about the affiliate program is the following:

Rake percentage (the percentage the poker room earns from every pot)

Revenue share (the percentage of the rake paid to the affiliate)

Average number of players on active tables (on the referrer’s player level)

Find the average number of players seated at the tables, as well as the average pot. This information is given at almost all poker rooms. If you can’t find the information in the affiliate interface, log in as a player and look directly at the tables.

Then calculate as follows:

(rake percentage x average pot x revenue share) / average seated players.

This gives you the average commission for one played hand.

Look at their fixed commissions and do another quick calculation:

Fixed commission / earnings per hand.

This gives you the number of hands the referred players has to be part of, before you make more from revenue share than from the fixed commission.

If you want to know the time each player has to spend in the poker room to make up for the fixed commission, all you need to find is the average pots per hour. This information is also available in almost every poker room. Then simply calculate:

Number of hands (from the calculation above) / hands per hour.

Giving you an estimate of the time each player has to spend in the poker room before you start earning more than the fixed commission.

Now you have a few more parameters to consider before choosing your revenue model, take your time – it is well worth it.