Hi Adam,
You have some good points as well. You really think things out well. Thank you for your insight. Its great.
I agree, CPA can be good for new affiliates who start out, but in most cases you need to get quality traffic. That is hard to do when you are building a database. You do not have control of your player base or influence.
Therefore, you run the risk of the affiliate program informing you they need to hold your payment until your players rake more. This has happened so many times. Its very well documented.
As a new affiliate, I would not want anyone to go through this, as they put hard work and energy into their new business. Then get the sudden shock!!
So for me if i had to start all over from the start i would choose Hybrid deals.
However if an affiliate works it out with the site that’s fine. But here’s what i think is so crucial. Read the terms of contract is for sure a must.
One other thing as a new affiliate i believe you must ask if you choose CPA solely.
You need to ask your affiliate manager if there are any reasons why a payment for CPA will be withheld for any reason?
I think you need written documentation from your AM that will assure you, you will get paid no matter what. In writing. As there is to much room for error. Reasons for non payment include: rake to low to payout, affiliate fraud, player fraud, and various other things.
For obvious reasons affiliate fraud, and player fraud is a rightful cause for non payment, but low rake from players or poor quality should not.
I do agree if a site comes to you with a concern and says your players are of poor quality we must stop your CPA deal then that is ok, but any money owing should be paid in full as agreed.
That is the cost for allowing CPA for both the affiliate site and affiliate promoting them period.
I have first hand experience with this, so from now on i will only choose rev share, or hybrid deals. While i do this, i always get in writing what the terms are for the CPA release. You simply need to protect yourself and get written confirmation.
So if your payments are stopped, you have proof.. Its so important!!!
I maybe able to give more insight on this later… but sometimes its also worth negotiating a settlement in these cases just to move on. In all fairness to the affiliate sites, you cant expect them to loss money while you gain. Although its their responsibility to inform you when to stop if its an issue of poor quality players.
Anyway i have went through this, so its how i feel about it!!
Steve
you raise some good points. I think Revenue Share is great for an established affiliate who knows their target customer base and perhaps has a mailing list or a forum, community or blog. These types of affiliate love the revenue share because they know that they can build up a good base of players.
Not sure what you mean by “players must lose all their money”. Why would a player referred to casino/sportsbook/poker room have to lose all their money to release a CPA?
I think this raises the notion that as an affiliate you should read the terms of the commission model you are accepting. In most cases affiliate programs ask for a minimum deposit to release the CPA. I don’t know any programs that force a player to lose all his money before they pay out, that’s the type of affiliate deal you don’t want.
In short, CPA offers a guarantee and low risk of a big winning player. In my experience affiliates who take CPA deals have great content, targeted traffic and choose reputable programs.
Of course there are consequences of Net Revenue Share. Where you also make mention of the “one (or more) big loser” phenomenon you should also consider that you can also encounter the “one (or more) big winner” phenomenon. This could mean that any revenues that end up producing players who win leave you with a negative balance at the end of the month. This means no commission. Also, watch out for programs that carry over negative balances. I’ve known affiliates to shut down their account because they can never get back above zero.
I hope this overview gives you both the pros and cons of CPA and Net Revenue models and helps you decide on how you want to monetize your traffic.