The different payment plans in the gambling affiliate industryThis is an important topic and definitely one that can be discussed for hours and hours - what´s the best payment plan? Is there a "best" payment plan? What would you go for? I will start right from the beginning by describing the common payment plans there are for gambling affiliates and also share my opinion when it comes to advantages/disadvantages. Please note that there are many more payment models available in other affiliate niches and in the end, anyone can of course negotiate custom deals, such as flat fee advertising.
Common gambling affiliate payment plans: Revenue Share, CPA (Cost Per Aquisition)
Okay, you are given the choice between Revenue Share and CPA - which one should a new gambling affiliate choose?
Let me first explain what Revenue Share and CPA exactly mean and I will try to answer the question afterwards.
Revenue Share: Affiliates are paid a percentage of their referred players losses, lifetime. Your payment depends on how your referred players are doing and if they lose, you make money. A 40% revenue share deal means that the operator will share 40% of their revenue with you. (There are several slightly different revenue share models but I wont get into detail here, just keep that in mind and dont forget that there may be terms such as bonuses etc., that are also being deducted)
CPA: Affiliates are paid a lump sum for each new depositing player they refer to the gambling site. CPA deals usually come with a number of different requirements regarding deposit amount, minimum turnover etc. The gambling operators want to make sure that you dont refer players who make the minimum deposit of $10 and leave right away while you are being credited a high CPA - this is to prevent fraud and yes, lots of affiliate try to abuse of course...
So, you decided to become an affiliate and promote a gambling site. In order to so, you will have to sign up for the respective operator´s affiliate program and sometimes, you will be able to choose between Revenue Share and CPA (Cost Per Aquisition) - even though CPA deals are harder to get nowadays and usually not "standard". Most operators restrict new affiliates to Revenue Share these days, some may also restrict affiliates to CPA and some may offer both options. Lets assume you will have the choice, which one should you go for and why?
I will start by talking about what a "good" gambling CPA deal may look like. Established gambling affiliates can easily negotiate CPA deals as high as $200 (or even way more than that) for every depositing player they refer to the site. Sounds too good to be true? Trust me, some gambling affiliates are getting even more than that and as crazy as this may sound, with a $200 CPA you would need to refer only 5 depositing players per month for a $1000 pay-cheque - that´s 4 digits! And now lets get back to reality - as a new affiliate, no gambling site will offer you such a high CPA deal. Gambling sites will evaluate the players you are referring and the CPA deal highly depends on that. Not all traffic is worth the same - assuming you are running a gambling affiliate site that ranks highly on Google for high-roller related terms, the players you will be sending should be worth much more than if you were to run a gambling affiliate site focusing on no deposit bonuses. A player that signs up on a gambling site through your links for a no deposit bonus, will likely gamble his free money and never come back - there are exceptions all the time of course, but in general, that´s how things are. So naturally, any gambling site will only grant you a "standard" CPA deal - if any - in the beginning. A standard rate is something like $50-$60 per player, if you are lucky, maybe $100. Still a nice pay, isnt it? I definitely recommend discussing your deal with your affiliate manager after a few weeks/months and if you are sending good traffic, they may give you a much better CPA deal.
Revenue Share vs CPABla bla bla - so, what´s better, Revenue Share or CPA? You could say that CPA is the more attractive option, just send a few players per month and make hundreds of dollars just like that, right away. Yes, you will definitely have quicker (higher) returns when going for CPA, in the long run though, you will earn much (much much much much) more money with Revenue Share.
New affiliates often prefer CPA and its normal, they dont know their player´s value and they want the cash - as quickly as possible. You should never forget though - any CPA deal always favors the gambling operator - no exception! Yes, of course, not all of your referred players will lose hundreds/thousands of $$$$ and so what I just wrote might seem odd - still, this is how it is. Trust me, a few "real, bigger players" make up for it all. Plus, dont dare to believe any affiliate program in the world is going to pay you $100 CPAs forever if you only refer players that generate $10 for them - they will simply terminate the CPA deal and - provided you werent trying to scam them - switch you over to a revenue share deal. No casino will pay you $1000 in CPAs if the 10 players you referred only made them $100 - thats just not gonna happen. With CPA, you will always get a worse deal as an affiliate, I mean, never will you get paid more than your players are actually worth and most importantly - the big players you send - you will never get a fair pay for them. Imagine you refer a whale gambling thousands of $$$$ each day and having taken a $100, just because you wanted those 100 bucks as soon as possible...
Revenue share is the way to go if you are serious about your business and its a payment plan that´s actually based on a real "partnership" with the respective operator - you bring good traffic, the operator makes money, you make money - as simple as that.
Is it really so easy, Revenue Share for the win?!Its of course not as easy as I made it look and there are several scenarios that need to be taken into consideration. Say the CPA is soooo high when comparing it to a low end revenue share deal, then it makes sense going for the CPA - 20% revenue share for example sucks and if they are offering a $150 CPA instead, then go for the CPA - I would... With a 20% revenue share deal, I will have a hard time with my referred players generating me $150. That´s one of the main scenarios where a CPA might be the better option.
Then it also depends on what you are really trying to achieve - do you really want to establish a serious affiliate business? Or are you desperate for quick cash in order to pay for the costs you have had building your website? Generally speaking though, one should always prefer the deal making as much money as possible - and that´s not CPA, but Revenue Share!
In one of my previous posts I have mentioned another disadvantage of revenue share - affiliate programs claim to pay you for the life of the players you refer. I have personally experienced programs shutting down, cutting big players and all that shit - it happens and it sucks big time. Not much you can do legally, so you are always at risk having invested lots of work, time, money, receiving nice income for a long time and then one day, you lose that income stream. That´s why it always makes sense to diversify and not completely depend on one program. That topic actually deserves a separate post.
So whats my conclusion?Building a nice player base that gets you some good amount of money will take some time but thats about the only disadvantage if you are thinking long-term as an affiliate. Whenever and wherever possible, I would choose the revenue share deal over the CPA deal.
Oh, what about CPL?Well, cost per lead is really uncommon these days and most operators wont pay you per lead anymore. They used to do in some cases back in the day. I have posted about that here:
https://bitcointalksearch.org/topic/m.54225709