Tips & Guides — 09 Apr 2020
CPA, RevShare or Hybrid in Gambling Affiliate Programs
They say that you can earn a decent income in affiliate marketing, and it is true. But before you get overly elated, we would like to underline the fact that affiliate incomes vary a lot. We would like to say that it is proportional to the efforts made, but in fact, it is more true for the perspective. It takes time before affiliate programs pay you back. To succeed you need to learn. One of the learning curves is to understand how affiliates get paid and choose which payment strategy goes with your goals in gambling programs
There are three basic payment models in gambling affiliate programs: CPA, RevShare, and Hybrid. Below we will go into the details of each of them.
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CPA, what stands for cost per acquisition or for cost per action, is one of the most prevalent payment models in affiliate marketing which implies that affiliates receive a one-off commission from every action they generate. And by action, we mean the most common performance indicator in affiliate programs, such as sales, registrations, installs or downloads.
RevShare, Revenue share, is a “lifetime revenue” model, where your affiliates receive a percentage of the profits made by an advertiser they refer to. The typical percentage in RevShare could vary from 5% to 55%. Under RevShare affiliates get to have a commission for the first one-time recommendation and following commissions for a lifetime of the lead.
The important thing about RevShare is to mind that some affiliate programs might have a negative carryover, which means that as well as earning together with your lead, you can also bear losses if some other players win over.
As you may have already assumed, the hybrid payment plan is a combination of CPA and RevShare. Under this commission, model affiliates get both one-time payment and a revenue share. Doesn’t it sound like the most profitable then? Not exactly. As a consequence of having both commissions, you will get lower rates rather than solely CPA or RevShare.
If affiliate marketing offers different approaches, there must be some reasoning behind it and those win, who know which model is better for a particular case. Obviously, while pro affiliates are aware of these tricks, it is not very clear to newbies which model to choose. We will help you out here.
In reality, the payment model depends on your goals. Thus, first thing first, you must ask yourself the following questions – they will lead you to the right choice.
-What do you want to achieve in affiliate marketing?
-Is affiliate marketing a short or a long-term project for you?
-Who is your target audience and how active are they?
Let’s analyze which model is better for each particular case
If you are a beginner, you will most likely get a lot of recommendations to go with CPA. Don’t neglect them. Even though it is RevShare that can bring you the highest profits according to a number of opinions, it is also the one that requires more time to see any income. Going with CPA will bring you money faster.
And this is essential for beginners for two reasons. First, you probably get disappointed and may lose trust in the idea of earning if you don’t earn anything for quite a time. Second, as a beginner, you also learn within the process. And from the start, you don’t know which traffic you will be working with and how active your leads will be. Unless you don’t have quality traffic and active users, you won’t earn a lot. In this way, it makes more sense to earn on the CPA model.
If you made up your mind that affiliate marketing is truly the thing of your life, your goal is to achieve the highest-earning and you are ready to wait, then, of course, go with RevShare. But if you are in affiliate marketing for fast money, then go with either CPA or hybrid plans. Many affiliates start with CPA or hybrid and later move to RevShare.
When talking about Revenue Share we usually talk about recurring sales, in other words, you need to have active leads that will generate revenue from time to time, not just once. Not surprisingly, this model is wide-spread in gambling, where internet users come to play games again or again. As well as in online casinos or betting, where people also return to try their luck again.
Leads activity is also the reason why Revenue Share is not applicable for all affiliate niches. In some, like eCommerce for example, it will make no sense.. Some items are simply bought only once. And even if they are of a recurring usage, next time a person will likely go to the online store directly. Or they will be diverted by some other high-traffic affiliates. That’s the reason why other affiliate niches work only with CPA.
A separate opinion on the hybrid model
The hybrid model is probably more for newcomers who haven’t fully realized what they want, and who may change their business strategy along the way.
Besides, there is also another interesting opinion on the hybrid deals – the hybrid model being seen as a trial way. Some companies actually find it very appropriate for building strong partnerships with advertisers and affiliates. The hybrid strategy imposes responsibilities on both parties, and under shared responsibilities, everyone is motivated to support each other to earn more together.
Recently at the iGaming conference, we asked different companies and affiliate marketers which payment model they prefer to work with. Everybody gave a different answer. But basically the opinions divided among gaming advertisers preferring CPA exclusively with first deposits, betting companies finding Revshare as the best fit, and affiliate networks suggesting hybrid deals as a compromise solution where everyone benefits.
To conclude, decide for yourself your goals and strategy in affiliate marketing and consequently choose a payment model. Keep in mind that you can always switch when you feel that another model will work better for you. Nowadays if you use a modern affiliate management solution that allows you to work with different payout models you are flexible in choosing any affiliate program. Moreover, you can work with different advertisers and affiliates on different payment conditions and even set your own exclusive rules for a particular affiliate program. Good luck and high earning!
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