CPA compensation does provide quick cash, and it is a great choice for affiliates that are in need of cash flow because they are just starting out, experiencing greater expenses than income, and/or because they are offering incentives to players that come with a high cost to the affiliate.  

Revenue share, if negotiated properly, and with a program that has a high player life-time value, should earn the affiliate more money, but it can take many months before it surpasses the CPA payment that they could have received.

On the other side of the equation, operators prefer revenue share compensation for two main reasons; there is a far less likelihood of fraud, and their cash flow is not compromised.  Keep in mind that operators have settlement accounts, withdrawals, operating costs, and other expenses already eating into their revenue, and that a successful affiliate program that has a high percentage of CPA affiliates can actually be a danger to the viability of their business.

In my opinion, a hybrid between the two types of affiliate compensation is the perfect solution for affiliates that want to be able to cover at least a portion of their fixed costs quickly, and also want to maximize the potential revenue from their affiliates.  For operators a hybrid program can also answer their fraud and cash flow concerns and provide them with the ability to even offer affiliates an overall better compensation package.

While I have been a big proponent of this type of affiliate compensation for several years, it is only recently that we are starting to see hybrid compensation being offered. Some examples include a casino offering 20% - 30% revenue share plus a $30 CPA, another offering 30% - 40% rev share with a $25 - $35 CPA, and a poker site offering "up to $200 CPA plus 25% revenue share".  

What is fair?  Tough question in this market where many of the larger operators are willing to pay higher than player value for traffic, but common sense would dictate that if an operator is willing to offer affiliates, for example, a choice of $150 CPA or 30% rev share, then a hybrid plan would need to provide affiliates with a reasonable expectation to make at least this amount, with the possibility of increased earnings.  This means, however, that operators that are interested in having their CPA affiliates consider a hybrid program will have to be willing to share the true expected player life time value of their players with the affiliates during that discussion.

Expect to see more operators offering hybrid offers in the coming months, and there will be some good opportunities for affiliates that keep their eyes open for these.  I personally recommend them for affiliates that can afford the lower CPA payment, and it shows a commitment from the affiliate to the operators' program as well.

Is a hybrid compensation program right for an affiliate?  That question can only be answered by each one depending on their individual circumstances, but in my experience many of the "CPA only" affiliates are open to exploring this.  Some operators that want to offer hybrid compensation currently have software restrictions that make that difficult, but if affiliates ask, you can be sure that changes will be made.

Remember that affiliate programs need to work for both parties; affiliates, as salespeople, need to be compensated fairly for their efforts, but it has to be affordable to the operators.  A hybrid program provides both the affiliates and the operators with increased flexibility in their compensation, and goes a long way to keeping everyone financially happy.

Aha!  Well targeted.  That is the key - the key to every successfully mailed new customer acquisition campaign.  It all comes down to who you mail to.  If you are trying to sell diapers to people without babies, (or grandparents), you are not going to achieve a great response.  If you want to sell online gambling to prospects you should do your best to ensure that they have an interest in this activity.

There is an old adage that says "birds of a feather flock together", and this holds true for consumers of all types.  My first piece of advice to companies or affiliates that are looking for a prospect list is to start by taking a look at their current customers.  Which of them provide the best value, and what is their demographic and psychographic (lifestyle) profile?  Are them male, living in Sweden, and between 25 and 35 years of age?  You should know this information, or if you don't, you should adjust the way that you collect information on your customers to ensure that you get it.

Once you know which of your customers provide you with the highest life-time value, and have determined their profiles, you can now look for lists that contain prospects that most closely resemble these people.  Finding a list of 25-35 year old male Swedes is easy.  45 year old married ladies living in Montana - no problem.  Blind clowns that play video poker?  A little tougher, but not impossible.

Look up "list brokers" on Google - you may be surprised at how prolific this business is.  As with all marketing you do, work with reputable suppliers, take the time to do some research, and most importantly, test all lists before making large buys.

The VP Marketing for the most successful online casino group told me that their expectation was that for every 10 lists that they tested only 3 would provide them with a positive ROI, but if managed correctly, this more than made up for their other tests, and once they found lists that performed, they could roll out to them in confidence.

Using a targeted list is like hunting with a rifle versus a shotgun.  You can be a lot more confident that you will hit your target, and bag yourself some new customers.


Gian Perroni is the President of the Canadian Affiliate Management Company, (CanAffco.com), and has been in the online gaming industry since 1997.  A frequent speaker at gaming conferences, Gian has himself been an affiliate, an affiliate program director, and an operator.  He and his team work with gaming and retail merchants, helping them manage their affiliate programs.  Gian can be reached by email at gian@canaffco.com.

What never fails to amaze me is the lack of direct mail that I receive personally. I am a depositing player with dozens of sites, some of them at an embarrassingly significant level, and I can truthfully still count the total number of pieces of direct mail that I have been sent on my fingers.

Does that mean that direct mail doesn't work, or is it a case of a generation of online marketers that simply don't understand the incredible power of placing a piece of personalized communication directly into the hands of their customers, and their prospects?  I believe that it is the latter.

In marketing we have four customer communication goals; acquisition, conversion, retention through relationship management, and reacquisition.  Direct mail can be used for all of these goals, and in fact is the only single cost effective communication medium that can.  Personalized mail allows you to speak to new prospects, converse with existing customers, and address lost players effectively, all at a reasonable cost to your business.

A well designed mail piece is its own salesperson; containing visual images, written information, attractive offers, and of course a call to action.  Mailings to existing customers can be further personalized to include information that is specific to each individual, allowing the sender to tailor offers to the individual recipients based on their history.

Determining if using a direct mail piece is a cost effective way for new customer acquisition is easy to determine.  If you sell a product that provides you with an average profit of $100, and you get a 1% response, as long as your mailing package has a total cost of less than $1.00 per piece you are making money.  If your customer is worth $200 the same 1% response and mailing cost means that you are making some serious profit.  


Rather than get bogged down with math, the easy rule of thumb is this; if you use a well targeted list, ensure you have a great offer, and include both a response device and a call to action, you won't go wrong. A response device is as simple as including your url and support department contact information - you just need to give recipients a way to take you up on your offer.  An effective call to action is one that says "do this now and get this, and by the way, the offer expires soon".  Tell them what to do, how to do it, when to do it, and why they should.  Do not leave any of this up to them to figure out.

Direct mail is also the single most effective way to cross-sell your existing customers to another product or service that you offer.  Have two casino sites?  Let the players at one site know about the other one.  Tell your forum members about your rakeback site. Inform your sportsbook customers about the new poker site you are promoting.

We all know that communication is paramount to success - add direct mail to your advertising and customer relationship strategies.  You will not be disappointed.

Fortunately most affiliate managers will negotiate the different options with you, even if they don't post them, providing that they believe you can deliver on your promises.  It is reasonable, in my opinion, to be willing to prove the value of your traffic for some predetermined period of time, but it is also reasonable for the site operator to be willing to meet your payment method request if you are able to do this.

For example, you may want to receive a $150 CPA for a new depositing player, but the affiliate manager may tell you that he wants you to work on a 30% revenue share for 90 days first so that he can see that you can deliver depositing players that do more than just make an initial deposit and then withdraw the funds.  This is a perfectly reasonable request if you have not already proven yourself in the industry as being able to provide value players.  In my experience several affiliates that I have offered this type of arrangement have ended up staying on revenue share because the player activity was strong enough that they decided that rev share was a better option for them after all.

There has been some discussion recently about the value of straight CPA programs when looking at the declining value of the U.S. dollar.  While the value of the CPA payments that are received in dollars has declined in relation to other currencies, it is important to realize that most of the sites that pay in U.S. dollars are also transacting business with their players in dollars, and that the CPA amount that they pay you is at the same proportion as it always has been.  It is not the fault of the operator that the dollar has declined, and you can guarantee that they are feeling the affect of this even more so than their affiliates.  For sure they are not making more profit by paying affiliates the same CPA rate, but on a lower value dollar - the likelihood is that they are overall less profitable themselves.

So can you ask for a higher CPA rate because of this?  Sure - why not - nothing ventured and all that, but I would understand if they say no in the absence of any other reason for an increase. I know the effect of this first hand - as a Canadian I certainly enjoyed the time not so long ago when $1,000 received was worth $1,500 Canadian to my business - now I am lucky to get the same $1,000 in Canadian.  I feel like I am working for less every year, and from an exchange point of view I certainly am.

In summary, don't be hesitant to ask for the payment method that makes the most sense for your business, even if you don't see it offered.  But do be flexible with your requests.  Many operators and affiliate managers are nervous about straight CPA deals if they are not familiar with the quality of your traffic, and you should be willing to put your traffic where your mouth is.  Try suggesting a hybrid payment - perhaps a smaller CPA rate to cover your necessary operating and marketing costs, and an ongoing rev share that will increase the profitability of your business over time.  That just makes good sense!

Affiliates, like many salespeople, work on performance-based compensation, and in the gaming industry this is either a commission as a percentage of revenue, termed "rev share", a one time payment based on a predetermined sales result, called a "CPA" (cost per acquisition), or a blend of both, known as a "hybrid" plan.

To be successful in promoting the products of a merchant the affiliates need to have the proper tools to sell the products and services. For online promotion these include creative; usually online banners, as well as text links, site reviews, and other information about the merchants services.

Affiliates also need to have the proper reporting of their efforts so that they can determine how well they are succeeding, and make the necessary adjustments to maximize this success. In the gaming industry reporting is usually provided by the merchant themselves, and includes tracking of impressions, clicks, customer registrations, customer conversions, (purchases), and ongoing activity. In some cases this reporting is handled by an outside provider which works as well, and in many cases better.

Successful affiliate programs have dedicated personnel that work with the affiliates to ensure that they have the tools that they need, the reporting that is required, and to ensure that they are compensated fairly and in a timely fashion. Again these services are either provided to the affiliates by an individual or team that works directly for the merchant, or by an independent affiliate management company. Either solution is acceptable to affiliates providing that they receive the level of support that they require.

Providing that the affiliates are successful in delivering prospects to a merchant - customers that convert into paying customers - and they earn money, they will continue to promote them, and the more that they earn, the better the promotion is likely to be. Online affiliates have a set amount of "real estate" on their sites for promotion - they of course have to provide content to their visitors - and this is allocated to those merchants from whom they earn the best return.

To keep affiliates motivated, merchants should work with them to create incentive programs and special events that will provide them with opportunities for increased recognition, and revenue. They should also take the time to meet with them whenever possible to help them with their promotions.

A successful affiliate program can, and will, provide both parties with a long-term, mutually beneficial relationship.
Anatomy of an Affiliate Program
Gian Perroni - Canadian Affiliate Management Company

Almost every company has affiliates, although before the advent of the internet they were simply called "salespeople". The internet has provided businesses with the opportunity to have a virtually unlimited number of salespeople, promoting their products and services to literally millions of prospects that otherwise may not heard of them.

It is unfortunately common for both affiliates and merchants to misunderstand, or ignore, this synergistic relationship, and to try and take unfair advantage of the other party. The most successful programs are based on mutual respect, open dialogue, and proper recognition and reward for success.

Affiliates, like many salespeople, work on performance-based compensation, and in the gaming industry this is either a commission as a percentage of revenue, termed "rev share", a one time payment based on a predetermined sales result, called a "CPA" (cost per acquisition), or a blend of both, known as a "hybrid" plan.

To be successful in promoting the products of a merchant the affiliates need to have the proper tools to sell the products and services. For online promotion these include creative; usually online banners, as well as text links, site reviews, and other information about the merchants services.

Affiliates also need to have the proper reporting of their efforts so that they can determine how well they are succeeding, and make the necessary adjustments to maximize this success. In the gaming industry reporting is usually provided by the merchant themselves, and includes tracking of impressions, clicks, customer registrations, customer conversions, (purchases), and ongoing activity. In some cases this reporting is handled by an outside provider which works as well, and in many cases better.

Successful affiliate programs have dedicated personnel that work with the affiliates to ensure that they have the tools that they need, the reporting that is required, and to ensure that they are compensated fairly and in a timely fashion. Again these services are either provided to the affiliates by an individual or team that works directly for the merchant, or by an independent affiliate management company. Either solution is acceptable to affiliates providing that they receive the level of support that they require.

Providing that the affiliates are successful in delivering prospects to a merchant - customers that convert into paying customers - and they earn money, they will continue to promote them, and the more that they earn, the better the promotion is likely to be. Online affiliates have a set amount of "real estate" on their sites for promotion - they of course have to provide content to their visitors - and this is allocated to those merchants from whom they earn the best return.

To keep affiliates motivated, merchants should work with them to create incentive programs and special events that will provide them with opportunities for increased recognition, and revenue. They should also take the time to meet with them whenever possible to help them with their promotions.

A successful affiliate program can, and will, provide both parties with a long-term, mutually beneficial relationship.

This whole thing would be a lot easier if everyone would offer the same choices, but this is the online gaming industry - you were expecting consistency?

So, CPA vs rev share vs hybrid payment combined with poker vs casino vs bingo vs skill games. What's a girl gonna do?

Let's see if I can help shed some light on this conundrum. In past articles I have discussed the different compensation models for you, the affiliate; the advantages and disadvantages of each model, and the important fact that in almost every case, the choice is really up to you.

When looking at CPA as an option, the first thing you need to understand clearly is that every program is different. You need to determine what the base amount is, for example $100, and where that can improve, like an offer of $150 if you are able to deliver more than 20 new converting players in a month. Many programs will provide rewards for performance like this, but note that in every case it is not delivered players, but delivered depositing players, as CPA payments are based on a specific deposit action.

What this deposit action may be also varies. Many of the more aggressive programs, especially in poker, don't have any minimum requirement at all - simply have your player make any deposit of any amount and you get paid. Most, however, will have some sort of minimum deposit in place in order to trigger a payment, let's say for example a $50 deposit. This varies of course, often lower for bingo and skill games sites, and higher for casino and poker sites.


It is also very important to find out if this minimum amounts needs to come as a single deposit by the new player, or if several smaller cumulative deposits that reach that minimum amount will qualify. In my opinion, and that of most affiliates, it is the responsibility of the operator, through their product, promotions, and communications, to obtain re-deposits - my work is done when I deliver the player and they make their first deposit, so I don't like to be tied into a requirement that the player must make one or more additional deposits to get paid.

The actual amount of the CPA will also vary between gaming verticals. It is easy to find bingo operators offering you a £20 CPA, or even $50, but a little more work finding those that offer you $120 or £100. I have seen a rummy site offering $35, and another offering $100. Casinos and poker are all over the map - $65 is pretty much the lowest, but published rates of up to $200 plus are available, and for those affiliates that can really deliver, rates can be as high as twice that.

These CPA rates are all available, but before you just look for the highest compensation, don't forget that a $200 CPA payment with a program that you convert 3 players a month into is far less valuable to you than a $100 CPA program that you are able to deliver 10 players a month. There is often a reason for a site offering a higher CPA rate; it may simply be that they are looking for a competitive edge, which is great, but far less attractive is if they are offering the higher rate because of more stringent restrictions on payments, market saturation, or worst of all, if they are manipulating your traffic results and only paying you on a percentage of your players.

Not to say that this ever happens. Oh no. Of course not.

So here's my bottom line. CPA payments are a very attractive option in three situations; the first is when you need the quick cash to cover your operating expenses. (But remember, if the revenue share offered will earn you more money, you are potentially leaving money on the table.) The second instance where you should look at CPAs positively is when the CPA payment is weighted so that it will likely always be worth more than rev share based on the rate vs the revenue share percentage offered, especially if you believe that your players will not remain with the site long enough for the revenue share offered, regardless of the percentage, to exceed the CPA. The third situation is when the restrictions on the CPA payment - no need for multiple deposits, a reasonable minimum deposit amount, and not to onerous a "hands played" requirement - are all set to levels that you feel you can reasonably deliver. By the way, there is a fourth time - some programs only offer CPA payments. Now that's what I call an easy decision!


Gian Perroni is the President of the Canadian Affiliate Management Company, (CanAffco.com), and has been in the online gaming industry since 1997. A frequent speaker at gaming conferences, Gian has himself been an affiliate, an affiliate program director, and an operator. He and his team work with gaming and retail merchants, helping them manage their affiliate programs. Gian can be reached by email at gian@canaffco.com.