CPA vs Revenue Share Commission Rates: Make the right choice
If you are new to online gambling and you are looking to join any gambling affiliate programs then in the signup process you will usually run into a few different commission options.
These options mainly include CPA (Cost per Acquisition), Revenue Share, PPS (Pay per signup), wager share and more.
When it comes to casino, sportsbetting, poker, lottery and bingo you will mainly have a choice of revenue share or CPA while poker is more based on wager share commission such as a percentage of the rake.
The main question most new affiliates want to know is should they take CPA over Revenue Share or the other way around?
In theory all affiliates should earn more money in the long run taking revenue share over CPA but unfortunately in the business things haven't worked that way. What affiliates need to know is the average lifetime value that a player can be.
CPA is a one time commission you get when a player deposits with that money being earned instantly and is in theory less money than you would receive with revenue share but it comes at the expense of not having to wait out the life of that player.
Pros of CPA
- Upfront Payment
- Less concerns with shaving
- Earn more money from smaller players
Cons of CPA
- Earn less money over time
- Earn less money from whales
Before 2010 most affiliates would probably have said that revenue share is the way to go for earning the most money. In 2012 many affiliates would probably have something different to say.
In the past few years there have been many programs that have closed completely, closed their affiliate programs or have retroactively changed their terms and conditions which in effect has allowed operators to cut out affiliate commissions.
A few programs that have gone out of business include: Doylesroom, Victory Poker, Lucky Vegas 77, Casino Coins.
A few programs that have closed their affiliate program while keeping their players: BetUS Partners, Grand Prive, Sportingbet Affiliates.
A few programs that have retroactively changed their terms and conditions: bewinners, Star Partner, Score Affiliates.
Another reason why CPA is more appealing is when gambling companies have to pull out of a market. When this happens your revenue share on that player becomes worthless as the player can't play there anymore. If you had gone the CPA route maybe you would have more in your pocket.
Whether you are in online gambling or another field, being an affiliate can be very rewarding but affiliates must look after themselves. CPA might not be the best option for potential income but it is certainly the safer way to do business with an affiliate program and allows both parties to walk away should they disagree on anything or if an affiliate program changes in anyway.
The iGaming industry is undoubtedly growing immensely as the days pass by. Nowadays, betting companies are able to offer many games and gambling options, as well as earning possibilities.
As betting sites grow in popularity, so do the affiliate programs that dedicate their complete existence to making all of those betting sites get more players daily.
If you are thinking of joining an affiliate program, but you do not know what commission structures benefits you the most, you want to take a look at the following facts and differences between the Revenue Share plans and the CPA plans:
Revenue Share Commission plans:
- This is a model of an affiliate program where a webmaster receives a percent of generated revenue. For example, partners attract players to online casinos and obtain a percent of their losses.
- Revenue Share’s general formula is the following: RevShare = NetRevenue* reward percent.
- Net Revenue is a gross income that casinos receive from a player invited by the partner. It can be either positive or negative.
- Through the Revenue Share plan, the affiliate earns money depending on how much the referral loses.
- This specific type of plan counts with general terms and conditions that all the affiliates must abide by, such as commission rates and payment dates.
- Most of the Revenue Share plans have a ‘lifetime’ aspect to them but some only last for a set period of time like 6 or 12 months.
CPA (Cost Per Acquisition)
- In order for your lead to become a ‘qualifying customer,' there are often rigorous requirements that must be satisfied.
- Every type of affiliate market and every partner within those markets will have slightly different commission structures, rates, and ‘qualifying’ requirements.
- Generally, specialists recommend starting working with affiliate programs via the CPA pattern and shifting to RevShare only after gaining some experience.
- CPA is a format of affiliate program where the webmaster is paid for a certain action, for instance, it can be specific activities such as entering a website, filling out a registration form, subscribing to a newsletter, etc.
- Pricing is predictable for advertisers and publishers, but the advertiser carries most of the risk.
Which one benefits you the most?
Understanding the various types of commissions available is simply the first step. The more challenging topic is how to choose the best structure for your company or website.
When you're just starting out, the simplest approach to figure this out is to define your own endgame.
Some questions you should ask yourself are:
- What is your goal?
- What are you trying to achieve?
- Are you in it for the short term or the long term?
- Who is your audience and how active are they going to be?
In general, a CPA structure is preferable if you're in it for the short term, want earnings up front, and expect your referrals to not stick around and become long-term customers of the service/product you're suggesting.
This will allow you to get greater, one-time payouts the minute one of your leads is "qualified," without having to worry about what occurs afterwards.
You are always running promotions or targeting new audiences in order to generate the most leads through your affiliate link, and your business will take sort of a funnel shape.
If your goal is long-term and your aim is to develop a site or service that helps the individuals you send through affiliate links to improve their involvement, then the revenue sharing structure is the way to go.
Profits will be slow to come, and it may take a long time to reach a substantial level, but every eligible customer you get will be linked to your account for life, so your earning potential is much larger in the long run.