Understanding Affiliate Marketing Commissions
Nov 4, 2021
The iGaming market (casino, sports betting, poker, dice) is forecast to reach $112.09 billion by 2025 at a CAGR of 12%. Such substantial growth indicates an increase in every area, including marketing and promotional efforts.
Since the start of the pandemic, affiliate marketing has always been front and centre for iGaming, driving 60% or more of gambling traffic, as our half-year report shares.
When it comes to promoting an iGaming brand, affiliate marketing is the most productive and effective choice for operators. There are several common affiliate commissions on the market, and at first, making heads or tails of them can be challenging.
This guide explains what benefits and revenue each type of affiliate marketing commission offers. Discover common and custom affiliate marketing commissions with clear and concise theory in our overview.
Speaking of affiliate marketing
In order to explain what commissions are, let’s briefly brush up on affiliate marketing.
At its heart affiliate marketing in online gambling is a performance-based cooperation model between a business and an affiliate, in which the latter generates traffic and the former pays a certain fee (affiliate marketing commission) for services rendered.
The online gambling field is quite delicate, and promoting iGaming businesses involves many caveats. Affiliates attract players using different tools: SEO, contextual and native advertising, social networks, web applications, and others. To increase traffic quality and quantity, several solutions can be utilised simultaneously.
Affiliate marketing is based on trust. Affiliates pay attention to simple, yet vital, points: reliable software, high conversion and retention rates, overall player experience, fair and favourable cooperation terms. With all these points accounted for, both parties can get the most out of their cooperation.
Common affiliate commissions: what you need to know
Simply put, affiliate marketing commissions are payments to partners for referring traffic.
It is no surprise that affiliate rewards are at the core of partner marketing. Is there a payment scheme that will motivate affiliate performance without hurting the bottom line? What terms can a casino offer its affiliates? What are the most common affiliate commissions?
We answer these and other questions in the breakdown below.
What is CPA in affiliate marketing?
CPA stands for Cost per Acquisition. It is sometimes referred to as CPL, or Cost per Lead, but the concepts are quite different. The casino pays the affiliate a CPL-reward for each player registered. In the case of CPA, affiliates are paid if their traffic (read ‘players’) meet monetary qualifications, such as deposits or wagers.
This is where we also introduce the baseline. The baseline is a set of criteria that must be met in order for the affiliate to be rewarded. That can include a set deposit sum or wager sum – it depends on the agreement between the parties. In a classic CPL scheme, on the other hand, the target action can be a player registration.
Arrangements between the parties may change depending on the results achieved. If the affiliate performs well and drives quality traffic, the operator can increase the flat rate or, conversely, adjust the terms of cooperation if the affiliate does not perform effectively.
To gain a better understanding of how the CPA model interacts, let’s see how that plays out in practice.
CPA in practice
Consider the case where an affiliate and operator agree to work according to a classic CPA scheme. An affiliate will receive a one-time reward of 50 EUR for every referred player who qualifies against the following criteria:
- First deposit sum ≥ 20 EUR
- Wager ≥ 20 EUR
Suppose the affiliate brings 50 such players to the operator in a month, they will receive 2,500 EUR. And that is how the CPA affiliate commission works.
What is Revenue Share (RevShare) in affiliate marketing?
Certain operators consider Revenue Share, also known as ‘RevShare’, to be more motivating than CPA. Referred players generate revenue for the casino and the partners receive a percentage of that income.
Most often, there are no time limits and affiliates receive their royalties throughout the player lifecycle. Consequently, it can be considered a long-term income model for the partner.
For an operator the benefits are quite obvious: affiliates are interested in bringing the casino relevant traffic in the form of players who are likely to remain engaged for a long time. The problem of fake or low-quality traffic recedes into the background and loses its danger to the casino.
RevShare in practice
In the case of RevShare affiliate marketing commissions, an operator may offer an affiliate the following conditions:
- If an affiliate refers 1-10 First Time Deposits (FTDs), the affiliate will get 30% of NGR.
- If the affiliate refers 11-20 FTDs, the affiliate will get 35% of NGR.
- If the affiliate refers 21-30 FTDs, the affiliate will get 40% of NGR.
- If the affiliate refers 31+ FTDs, the affiliate will get 45% of NGR.
*Net Gaming Revenue (NGR) is the casino’s actual revenue after expenses.
Here you can see that the partner’s income is directly related to the operator’s success.
What is Hybrid in affiliate marketing?
This type of affiliate marketing commission is what its name suggests. The hybrid affiliate commission is a combination of CPA and RevShare. The affiliate receives a fixed fee for referring a player, and then a percentage of the profits during the interaction between the player and the casino, sportsbook, poker room or dice site.
Percentages and fixed fees are all negotiated individually. This is influenced by many factors: traffic quality, geography, number of players, etc.
Hybrid in practice
For example, with this type of cooperation an affiliate gets:
- 100 EUR for each qualified player who meets the following qualification criteria:
- Deposits sum ≥ 20 EUR
- Wager ≥ 20 EUR
- 40% of the NGR of all referred players
Custom affiliate commissions
Unlike most affiliate marketing solutions, Affilka does not impose any kind of restrictions on operators. Our flexible commission constructor has customisable commission models in addition to the classic CPA, RevShare, and Hybrid options.
Affilka offers operators the opportunity to establish individual financial relationships with each affiliate, affiliate group, or network. Different parameters and settings allow the operator to set and combine multi-level conditions for each partner, product and traffic source.
For example, payouts can be determined by:
- Player geo
- Amount and sum of deposits
- First deposits
- And many other factors which are of interest to the operator.
Casinos and sportsbooks can create partnerships from the ground up, with specific terms and conditions for each affiliate and their traffic source. The reward may take the form of a flat fee, percentage of net revenue, deposits, wagers, etc. There is no need to reconfigure the system manually: once the conditions are entered, the platform takes care of everything automatically.
Affilka advocates a reasonable allocation of funds. Our clients do not pay affiliate rewards on players who:
- are duplicates of other players
- have set self-exclusion limits
- have a disabled status for any reason (e.g. for violating terms and conditions, fraud suspicion, etc.)
Affilka commission in practice
Let’s look at how an operator can use the Affilka affiliate marketing platform.
The operator’s current focus is on players from Switzerland, Denmark, New Zealand, and Canada. They want traffic that is not just geographically specific but also active and engaged. The affiliate will be paid if players from these countries register and deposit at least 20 EUR.
The affiliate’s arrangements with the operator might be as follows:
- Switzerland, Denmark: for each player meeting all the criteria, the affiliate receives 150 EUR.
- New Zealand, Canada: for each player meeting all the criteria, the affiliate receives 200 EUR.
If the affiliate refers inactive players or gamblers from the non-target geographies, the casino will not pay for such traffic. Affilka’s flexible constructor helps to manage budgets more effectively and control traffic quality based on relevant indicators.
Maximise the benefits of affiliate marketing
Player acquisition can often be tricky in the iGaming industry. That’s why honest, transparent, and effective connections with successful affiliates are key to steadily growing your playerbase.
It isn’t always easy to choose and establish the right terms and conditions for collaboration. One-size-fits-all approaches make no sense. Personalised terms are what will boost your affiliate marketing efforts.
With a modern and reliable affiliate marketing tool that delivers flexibility in negotiation and operation iGaming operators can look forward to building productive relationships with affiliate partners.
Articles You Might Also Like
- Feb 14, 2022How To Manage an Affiliate Program with Affilka?
- Jan 19, 2022Affilka: Year in Review 2021
- Jul 22, 2021Affilka is Celebrating its 100th Brand
- Mar 29, 2021Affilka launches new module for Sportsbook