Affiliate Payments – Your Choice or Theirs
In my last article I mentioned the differences between the most common payment options that you are offered as an affiliate – revenue share, CPA (cost per acquisition), or the newer, advantageous “hybrid” option. The question is how much choice do you, the affiliate, have in this.
The easy answer is that many programs don’t offer you a choice at all, making your decision less about the payment method you desire, and more about whether or not you even choose to support a site that doesn’t offer you the method that you prefer.
Fortunately most affiliate managers will negotiate the different options with you, even if they don’t post them, providing that they believe you can deliver on your promises. It is reasonable, in my opinion, to be willing to prove the value of your traffic for some predetermined period of time, but it is also reasonable for the site operator to be willing to meet your payment method request if you are able to do this.
For example, you may want to receive a $150 CPA for a new depositing player, but the affiliate manager may tell you that he wants you to work on a 30% revenue share for 90 days first so that he can see that you can deliver depositing players that do more than just make an initial deposit and then withdraw the funds. This is a perfectly reasonable request if you have not already proven yourself in the industry as being able to provide value players. In my experience several affiliates that I have offered this type of arrangement have ended up staying on revenue share because the player activity was strong enough that they decided that rev share was a better option for them after all.
There has been some discussion recently about the value of straight CPA programs when looking at the declining value of the U.S. dollar. While the value of the CPA payments that are received in dollars has declined in relation to other currencies, it is important to realize that most of the sites that pay in U.S. dollars are also transacting business with their players in dollars, and that the CPA amount that they pay you is at the same proportion as it always has been. It is not the fault of the operator that the dollar has declined, and you can guarantee that they are feeling the affect of this even more so than their affiliates. For sure they are not making more profit by paying affiliates the same CPA rate, but on a lower value dollar – the likelihood is that they are overall less profitable themselves.
So can you ask for a higher CPA rate because of this? Sure – why not – nothing ventured and all that, but I would understand if they say no in the absence of any other reason for an increase. I know the effect of this first hand – as a Canadian I certainly enjoyed the time not so long ago when $1,000 received was worth $1,500 Canadian to my business – now I am lucky to get the same $1,000 in Canadian. I feel like I am working for less every year, and from an exchange point of view I certainly am.
In summary, don’t be hesitant to ask for the payment method that makes the most sense for your business, even if you don’t see it offered. But do be flexible with your requests. Many operators and affiliate managers are nervous about straight CPA deals if they are not familiar with the quality of your traffic, and you should be willing to put your traffic where your mouth is. Try suggesting a hybrid payment – perhaps a smaller CPA rate to cover your necessary operating and marketing costs, and an ongoing rev share that will increase the profitability of your business over time. That just makes good sense!
Gian Perroni is the President of the Canadian Affiliate Management Company, (CanAffco.com), and has been in the online gaming industry since 1997. A frequent speaker at gaming conferences, Gian has himself been an affiliate, an affiliate program director, and an operator. He and his team work with gaming and retail merchants, helping them manage their affiliate programs. Gian can be reached by email at firstname.lastname@example.org.