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Have I correctly understood that you are giving something away to each depositor?
It sounds like you are “incentivising” your players to join up to the site?If that is the case – then you have to clear this with “the company” prior to moving to a CPA plan usually.
But the bottom line is this – if you think that you will make more money from the CPA plan than the rev-share plan (as you are suggesting) – then you are also saying that the potential CPA payment exceeds what you think the gaming company will make fom the players ?!
Do I have that correct?!’
In which case – no matter what the company is you are likely to find your CPA agreement terminated “with prejudice” (especially if you are incentivising players without authorisation) – and you will not be paid the amounts you expect.
The gaming company is in operation to make net profits – not to payout more to affiliates than they make per player.
Take a look around this forum – it is littered with tales of woe from start-up affiliates who thought that they could be “smart” and get hundreds of players through incentives – that otherwise had no real interest in playing at that property.
In nearly every case – the agreement is terminated – the affiliate is left out of pocket – and then we have to put up with a loud whining sound from the newbie affilaite shouting that what they did is not legal.
:sarcasm:(It might not be legal – but companies do it – and transfer the affilaite to rev-share – or sometimes drop them cold.
The gaming companies have a big enough legal team to make sure that there is enough doubt that ever recovering the funds is beyond the scope of any normal affiliate)
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In the end the only long term viable business model for affiliates – is that you are referring players to the gaming properties that deposit and play for genuine reasons. The gaming property needs to make money.
And if this is the case then (again) in nearly all cases taking revenue share is the best plan.
Having players that just depsoit $40 in order to get a physical gift – is not really a source of valuable players – and you probably need to find a better source of players if you are gonig to succeed in this game.
Hope that helps.
:hattip:TheGooner, thank you for your answer!
Just to clarify – its not an incentive deal from my part. The physical gift is a campaign from the gambling company so they are aware that they will be getting new customers of probably lower value because of this.
That is partly why I say that the CPA deal will be solid. So my only question is what CPA-$ that would be comparable with Rev Share of 30% with these kinds of customers – not if the CPA will actually be paid out in the end.
Well I’m sure you can do the maths Anton.
IF you think that :
– players are only going to average $40 deposits
– and we assume a best case scenario that they play and lose it all
– and you are on a 30% revenue share
– and they don’t charge you for the “free gift”.Then you’re going to make just $12 per player on that sort of rev-share deal. Theoretically a deal of $75 / $100 should see you way ahead.
However, ….
… if your player source is more random (SEO + external links), and you might attract actual genuine players, then you could see player depositing $200, $500, $1000 or more.
I’ve had players literally joinup and deposit thousands and spend it all within 24 hours (especially at online casino sites). The truth is that with rev-share, 80% of your value will come from a handful of big players.
I’ve had $xx,xxx payouts generated by ONE player in a month at multiple sites over the years. Think how many $100 CPA’s that covers. This is why experienced affiliates say REV-SHARE beats CPA whenever you have a REAL source of new players.
So it’s up to you – if you want to ignore that advice … you have to know your site, your targets, and your player base. And in the end if you think all that you will ever have is low end players – maybe CPA is better.
(But remember – if your gaming partenr is happy to keep paying the CPA, then usually it’s because it’s FAR LESS than they’d have to pay you on REV-SHARE).
:sarcasm:I agree with all that Gooner says; his approach is practical and realistic.
Personally, I like to mix it up. Although I prefer REV-SHARE over the long-haul for sure (using Gooner’s principles), I have several CPA relationships as well. Specifically, there are 2 vendors that only pay me only 20 % on REV-SHARE, and for those, I use CPA. Hence, although 80 % of those vendors that I promote are under REV-SHARE, the 20 % on CPA provide a different kind of cash flow for me, which balances the equation a bit, in my eyes.
Again, just one man’s opinion here…..bottom line, do the math as Gooner suggests; it should dictate your strategy. Create a simple spreadsheet, and perform some “what-if” scenarios…..you might find this to be eye-opening.
Good luck !
Thank you all for your advice.
I guess that my biggest concern is that I am spending quite a lot of cash in PPC marketing and that Rev Share will take time to achieve pay-back.
Also I get the impression that it is somewhat of a gambling (to get that one great customer) and that is a risk in itself considering that I am paying for all my visitors – compared to anyone that gets only organic visitors and does not have the same financial risk.
I had a thought about average value per customer.
At least in Europe I think there are a couple of gambling companies that are traded on the stock market so I guess that there is public info regarding how many active customers they have and by that you could calculate the average player value and how much the average player looses per year.
Has anybody taken the time to look at that and calculated those values?
Good idea Anton, but no I have not yet. To the OP, if you are worried that you won’t make rev share from this promotion, why not do a CPA now and get some money. You can always work on a rev share later with other clients.
I think the moral of the story is if you think this $40 average will become the norm, than a $100 CPA is much better. Eventually you will need rev share to make big bucks, but no one says you can’t work with a few different casinos and have some be CPA and some Rev share, that way you have short term income to build and long term relationships slowly building out.
I have to say, did not read all of this thread
but applause again to The Gooner:)
:hattip:
I decided on Rev Share deal and I think I made the correct decision. Yesterday one of my players deposited and lost nearly 1000 Euro. Hoping to see more of him
