What Is Ring Fencing?
Ring fencing is a term that was first used in finance to indicate that one institution is isolated from their parent companies or other affiliate institutions, so that it will not be affected if some problems occur in other parts of the company.
The concept of ring fencing was then adapted to the affiliate world where it’s also known as “no bundling.”
The easiest way to explain this is to start with bundling itself.
Problems With Bundling
As a casino affiliate you can fall victim to bundling, depending on what programs you are promoting.
Many affiliate programs have more than one casino in their portfolios. The biggest players in the game have at least a handful of casinos, and they obviously allow you to promote them all.
This sounds great at first, but it can actually make it very hard for you to generate any profit if the programs are bundled.
The way almost all casino affiliate programs are set up is that you earn a commission when a player referred by you joins the casino, plays … and loses. Then you get a percentage of what the player has lost.
The only danger is that the player might not lose … but win instead. Then, you obviously get no commission.
However, if you’re promoting more than one brand (casino) through the same program, such a situation can kill your profits altogether.
Imagine that you’re promoting 3 casinos at the same time, and that such a scenario occurs:
- Casino 1: You make a profit of $1,000.
- Casino 2: You make a profit of $750.
- Casino 3: A player wins some money, and your commission is –$1,500.
If the programs are bundled, at the end of the month you earn: $1,000 + $750 – $1,500 = $250.
In such a situation, even though you made a healthy profit from two casinos the third one killed it almost entirely.
Enter Ring Fencing (or The “No Bundle” Policy)
If your affiliate program implements the concept of ring fencing then your negative results from one casino do not impact your positive results from the others.
Going back to the example above, you’d make: $1,000 + $750 + $0 = $1,750. A lot better, right?
How to Deal with Bundling and Ring Fencing?
The best approach is to pick only the programs that openly mention that they don’t bundle. If they don’t mention any such thing, ask your affiliate manager (or go through the terms and conditions more thoroughly).
If the program admits to bundle and you still want to work with it, the best approach is to select only one brand to promote (one casino). This way you’re minimizing the chance that one winner could kill your profits for the entire month.
If the program is not bundling, on the other hand, you can safely promote all brands it offers because any winners won’t impact your overall earnings.
The advice here in a sentence: If the program bundles, advertise just one casino. If it doesn’t, advertise them all.