A decent commission can make an affiliate proposal seem very attractive. When the first report comes in, questions begin to arise: which deposits count as qualified? What has caused the revenue share to be reduced? When will the money get into your account? In order to select a deal, it’s useful to understand how revshare and CPA models compare, so that you can ask those questions while the terms are still under discussion.
Both models can prove to be effective. The important question then becomes which one suits your acquisition costs, your audience, and your cash flow. For this reason, you need to examine in more detail the process by which a click eventually results in a commission.
Start With the Cost of Bringing Players In
For each acquisition that meets the agreed criteria, CPA charges a fixed commission. This makes it easier to estimate revenue relative to campaign spend, provided you know exactly what constitutes a qualifying player.
Let’s assume that you spend €2,000 in order to get 20 depositing players; in that case your acquisition cost will be €100 per player. If all 20 of them qualify, the campaign will generate €3,000 in commission. This leaves €1,000 before you have to take into account your other operating costs.
Imagine that only 12 qualify; in that case the commission drops to €1,800 and the campaign is then below its advertising expenditure. The advertised payout remains precisely the same. It is the qualification rate that affects the outcome.
Before you launch, make sure you know the deposit requirements, the traffic sources that are excluded, the validation periods and any other conditions related to the payment. You’ll need those details for your forecast.
Give RevShare Enough Time to Prove Itself
The RevShare arrangement bases commission on revenue generated by referred players, in accordance with the program terms; earnings continue as long as those players remain active, making player retention key to the agreement’s value.
The way in which you assess performance changes. A player group acquired this month could earn commission over multiple reporting periods. If you compare its first month’s RevShare with an immediate CPA payment, you get an incomplete view.
Monitor each group of acquisitions at regular intervals, for example every 30, 90 and 180 days. Compare the total commission earned with the full cost of acquiring that group, including the expenses attributable to content production, media spending and other relevant costs.
You also need sufficient cash on hand to pay for the acquisition while revenues are developing. Pressure will still exist on long-term returns if campaign costs come in before commissions cover them.
Read the Revenue Definition Before the Percentage
Only when you know what the RevShare percentage applies to does it become meaningful. Ask the program to explain how it calculates net gaming revenue and which deductions affect your commission.
The commission base may be affected by bonus costs, payment processing fees and other adjustments, according to the agreement. Ask for a worked example that illustrates how player activity translates into payable earnings, since a clear explanation at this stage makes it much easier to assess the subsequent reports.
Also check for a negative carryover. A negative balance carried over into the next period might lower future earnings. Find out whether the balances apply to your account or to another level and obtain the answer in writing.
Give these details the same attention as the headline rate, since they show what that percentage really amounts to.
Consider Hybrid Through the Same Financial Lens
A hybrid arrangement includes a initial CPA element along with a continuing revenue share; it enables part of your acquisition expenditure to be recovered earlier while still obtaining income from later player activity.
The appeal is simple, but it still requires discipline; you have to verify that the CPA part covers a sufficient amount of your original expenses and that the RevShare part remains worthwhile when realistic retention figures are taken into account.
To compare the proposed hybrid terms with the standalone offers, use the same group of players and the same time period. Otherwise you might select a package just because it seems balanced without knowing if it actually improves your return.
