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And look at another aspect of this quota thing.
If the majority of programs adopts these, all affiliates will have to concentrate on a handful of brands to promote, so that they can be as sure as possible (still not sure, life plays tricks on you) that they will always meet their quota.
This of course will have an adverse effect on the entire industry, newcomers don’t have a chance of getting established.
New programs can’t get their foot in the door, nor can new affiliates. Which affiliate is able to make a quota when just starting out? Precious few if any.
So you end up with a handful of programs and affiliates making a killing, and the rest – bye bye.
So you are a program and think this sounds good and you want to be one of the programs that survive like this? Think again. With only a small pool of affiliates, you are now at their mercy. It’s much easier for 100 affiliates to get together and drop you for some disagreement than for thousands.
Someone needs to think this through, and programs need to see beyond their own noses here!
@Dominique 206491 wrote:
This of course will have an adverse effect on the entire industry, newcomers don’t have a chance of getting established.
New programs can’t get their foot in the door, nor can new affiliates. Which affiliate is able to make a quota when just starting out? Precious few if any.!
Of course new programs do not have to play by the same rules. They could simply not have quotas and they would attract new affiliates (as well as some existing affiliates) and could grow quickly.
So you could argue that if a quota situation existed for major programs then it would actually provide a niche for new programs and new affiliates to get established.
I have a feeling that the market would move to fill that profit / advertising void.
RETROACTIVE CHANGES BREACH CONTRACT LAW :
But let’s be clear – attempting to change terms and conditions to RETROACTIVELY apply a quota or minimum player scenario to all existing affilaites will not engender any goodwill – NOR is it actually likely to stand up legally if it was taken to a court of law.I know that most programs have a clause that says that they can change the T&C’s at their will – but as a general principle of contract law these changes are only legally enforcable going forward – and all customers acquired prior to the changes should be defined by the contract that was in force at the time – unless both parties (affiliate and program) agree to a new contract.
IF programs attempt to streamroll RETROACTIVE changes through – then they will simply see that many of their solid revenue affiliates will not make the effort to acquire new players under the new terms – while still retaining the right for payment of existing player revenues.
Is that really the scenario that the bean counters wanted to achieve?
However, here is how I see the quotas, why they are being considered and what it will mean if they are enacted for future periods :AFFILIATE PROGRAM COSTS :
With the continued difficulty of getting access to the lucrative US market following UIGEA – it’s no secret that the revenue flows have changed for many casinos and that the affiliate programs are obviously chopping staff and costs left right and centre.Most established affiliates will have seen tangible signs of this within the programs in the number of affiliate managers changing or leaving – and a slow down in the responses of exisiting staff.
The facts are that there are less people in the business at the program now, and they are trying to look at ways to service affiliates at less cost.
REAL RATES OF RETURN OF AFFILIATES / ADVERTISING :
I have no doubts that like most businesses affiliate programs look at their revenues and costs and I would not be surprised to hear that they’ve looked at the number of small affiliates that are being serviced and found that some are cost negative.It’s too simplistic to assume that if an affiliate makes a small profit – that it is also profitable for the affiliate program. If an affiliate also needs weekly help, and a monthly payment, then they may not actually deliver a bottom line profit after staff costs and banking transaction fees are considered.
Certainly from my banking days, I remember that the top 20% of customers actually delivered 120% of the profits – and the other 80% were actually a net loss. Yes the bank would be better off without them – UNLESS they could upgrade them.
Also, let’s remember that many of these programs are 3rd party programs, they don’t actually get the full profits that the casino makes, they are running the affiliate program as a service to the casino and also taking a small slice of the profits – almost like a master affiliate situation.
If an affiliate program is not making a profitable return then they do have to make changes to the cost structure.
OPTIONS GOING FORWARD FOR PROGRAMS:
Right now some programs are trying to enforce these minimum quotas, but simply looking at raw new player numbers is such a poor metric that I do wonder at the experience levels of the people making decisions.Inserting predatary quota clauses and saying that “they’re not intended to be used” is obviously a complete nonsense – if that was the case then we would not see then inserted in the first place.
So programs that have these clauses obviously see cases where they will use them – and that is legally acceptable where it is for new affiliates going forward – although I believe that programs that have these clauses will be viewed as less desirable by many affiliates and so the programs will get less exposure.
But if you have reduced staff to only have 1 affiliate manager and a couple of support staff then perhaps 500-1000 affilaites is all that you can adequately support? And in this case – affiliate programs do have the right to be selective regarding new affiliates and existing affiliates – GOING FORWARD.
BUT BEWARE …
Cutting acquistion streams broadly with a crude metric like raw player numbers can be a very expensive decision …Some low volume affiliates still attract high value players with great service, and programs that ignore this are simply going to lose some of their sources of highest value players and profits.
:Cry:@Dominique 206491 wrote:
With only a small pool of affiliates, you are now at their mercy.
They will spit into your eyes saying it is the God’s dew
@bonus-map 206502 wrote:
They will spit into your eyes saying it is the God’s dew
Boy that had me laughing out loud, I never heard that before! :3eyes:
Some low volume affiliates still attract high value players with great service, and programs that ignore this are simply going to lose some of their sources of highest value players and profits.
Very true!
Triple777s;206476 wrote:I wish we could get some of the “biggest” affiliates to join together, open up their own casino company, and affiliate program, where each software type is represented, so we would have a microgaming casino, a rtg casino, a rival casino..etc….and then all of us affiliates would sign up as affiliates to this “one” company, and screw over every casino, poker, bingo program that is screwing us over now.It would be fantastic….imagine, a gambling company run by the best gambling affiliates, with all us other affiliates as its partners, and then dropping ever single program out there that is taking advantage of our hard work.
If only?
So that means you’ll be also ambushing the programs that don’t implement the quota rule? :Cry:
Ok, this question ties into the quota affair, as I have a feeling it’s one of the main reasons for the term in the first place:
How would you curb affiliates / players effectively using the affiliate program as a rebate? It may not happen in Casino as much, but there’s a lot of that in sports betting.
These “affiliates” have one high-turnover player on the account, and their site is either non-existent, or a “blog” with 4 or 5 sports book banners.
@Renee 206508 wrote:
So that means you’ll be also ambushing the programs that don’t implement the quota rule? :Cry:
Hi Renee,
Would never do that to you or your program, only the programs out there that treat us affiliates like crap, and cheat us, which we all know CR does not do. We would still take care of you and your programs.Pat
@CK – Schalk 206512 wrote:
These “affiliates” have
Do they have OR do they NOT???
@CK – Schalk 206512 wrote:
Ok, this question ties into the quota affair, as I have a feeling it’s one of the main reasons for the term in the first place:
How would you curb affiliates / players effectively using the affiliate program as a rebate? It may not happen in Casino as much, but there’s a lot of that in sports betting.
These “affiliates” have one high-turnover player on the account, and their site is either non-existent, or a “blog” with 4 or 5 sports book banners.
Do you want that player? Is he making you money? If a second one comes along, do you want him too or don’t you?
If you want him, pay for him as agreed. What entitles you to have him for free when you aquired him under a contract that says you have to pay for him?
If you can’t live with that, then make sure you don’t close anymore contracts that oblige you to pay for what you get in future. But that affiliate delivered under contract, and if you don’t hold up your contracts, your word is worthless and you have zero credibility in future.
@CK – Schalk 206512 wrote:
Ok, this question ties into the quota affair, as I have a feeling it’s one of the main reasons for the term in the first place:
How would you curb affiliates / players effectively using the affiliate program as a rebate? It may not happen in Casino as much, but there’s a lot of that in sports betting.
These “affiliates” have one high-turnover player on the account, and their site is either non-existent, or a “blog” with 4 or 5 sports book banners.
easy fix. Affiliate must refer at least 10 new players in the first 6 or 12 months of joining after that they are an affiliate for life
@CK – Schalk 206512 wrote:
Ok, this question ties into the quota affair, as I have a feeling it’s one of the main reasons for the term in the first place:
How would you curb affiliates / players effectively using the affiliate program as a rebate? It may not happen in Casino as much, but there’s a lot of that in sports betting.
These “affiliates” have one high-turnover player on the account, and their site is either non-existent, or a “blog” with 4 or 5 sports book banners.
I guess it’s a problem if the player wins more than they lose on aggregate, but does that happen a lot anyway? If not, presumably the affiliate/player is profitable to the program in which case is there really a problem? If profitability is an issue, then there are several options: follow something along Mak445’s lines suggested above, or add a simple rule that says one account per affiliate, or one that says an affiliate cannot refer him/herself, or a combination thereof.
The quota rule penalises every affiliate to protect against a few which is reminiscent of the politician’s mentality toward our industry.
The primary issue here is if the quota is applied retroactively.
Going forward, affiliate can decide for themselves if they want to work with a certain program under such conditions.
But if it’s retroactive, the program can’t just stop paying monies owed. It’s illegal. It’s breach of contract, it’s extortion (if you do not send additional players, we will not pay you what we owe you).
It’s not acceptable.
@TheGooner 206501 wrote:
It’s too simplistic to assume that if an affiliate makes a small profit – that it is also profitable for the affiliate program. If an affiliate also needs weekly help, and a monthly payment, then they may not actually deliver a bottom line profit after staff costs and banking transaction fees are considered.
Yes, affiliate programs may need to cut costs – but that does not give them any right to renege.
I understand what you’re saying all too well – and fully agree.
However, the “monthly” payment is usually covered by a minimum required amount before payment is issued. And if an affiliate requires weekly help, at the very least it shows they’re making an effort – who’s to say that the next player they bring in won’t be worth a few thousand a month?
The bottom line is – while it may not be profitable to keep supporting an affiliate with one player, there’s no telling when the next player is going to come in, and how much he or she will be worth – and after all, you did promise to pay a percentage for the life of the player – otherwise you might not have ever received the player in the first place!
If you’re going to implement a quota at all – it should be something along the lines of “at least one active player in the past 6 months” – that would be somewhat acceptable because a player who doesn’t come back after 6 months isn’t likely to come back at all. I’m not talking about referring one player – I’m talking about having one active player.
If the affiliate never promotes you again – you still have an obligation to honor the contract. Plus it doesn’t cost you anything because the affiliate isn’t likely to be requiring help from you weekly. Thus it should still work out to a net profit.
If you don’t want this type of affiliate – then set your minimums higher to begin with. But everyone else is automatically grandfathered under the existing terms and conditions that they signed up under.
If you don’t want this type of affiliate – then set your minimums higher to begin with. But everyone else is automatically grandfathered under the existing terms and conditions that they signed up under.
Well said.
