CPA or Rev Share? The Breakdown
As a gaming affiliate, goal number one is to earn money. You will do so in one of two ways: CPA (cost per acquisition) or revenue share.
When you sign up to become an affiliate, you will generally have to choose between CPA or revenue share. If you don’t know the pros and cons of both you may end up making a decision you regret.
This is a “cost per acquisition” model in which you are paid a predetermined amount of money for every player you refer to a particular service. To help prevent fraud, the player must meet certain requirements before you are paid.
With this model, you are paid a percentage of a player’s rake (for online poker) over the life of that player. You are not going to earn any money upfront with this revenue model, but you have the ability to continue earning for the life of the player.
CPA Pros and Cons
The main benefit of the CPA model as an affiliate is simple: you get paid a set amount of money upfront for every qualified player that you refer. You don’t have to wait around, month after month, hoping that you earn money off of a particular player.
On the downside, you could be leaving a lot of money on the table if you opt for a CPA offer as opposed to revenue share. For example, you may have a CPA deal in which you are paid $100 for each player you refer. While this is great for quick, upfront cash it does not do you any good down the road. What happens if this player sticks around, burning through money day after day? In this case, you left a lot of money for the casino. Is this a risk you are willing to take?
Those who are averse to risk often times opt for the CPA model. They would rather have the money upfront than wonder if they will ever get paid based on revenue share in the future
Revenue Share Pros and Cons
It is easy to see that the biggest benefit of revenue share is that you can earn money over an extended period of time. Maybe you only earn $50 per player, per month. It may take a couple of months to overtake the initial payout of a CPA deal, but you can continue to earn for as long as the player stays active.
With an average revenue share of 25 to 35% for the life of a player, you can earn a lot of money on a recurring basis.
Check out what others have to say in the CPA vs. Rev Share forum thread.
On the downside, you are not guaranteed anything with the revenue share model. You may refer five players to an online poker room in a single day, just to find out that none of them stayed onboard for more than a month. In this case, you may only earn a few dollars if that.
There is no right or wrong answer when deciding if CPA or revenue share is the better choice. This should be based solely on your risk tolerance, affiliate marketing strategy, and the industry you are promoting.
Which have you found to be more profitable, CPA or revenue share? Leave your comments and suggestions in the comments section below.
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