CPA and RevShare: Review of the most popular payment models in gambling
RevShare and CPA are popular payment models used in the gambling vertical. Most often those are the models used by Affstream advertisers when working with web specialists. This can be attributed to the specifics of gambling offers. Let’s have a look at what these models are, what are their advantages and disadvantages, and how payments are calculated
Review of CPA and RevShare payment model
Advertisers in the gambling vertical in LatAm offer RevShare and CPA due to the specific nature of iGaming. Casinos can’t always predict profits accurately. The casino’s earnings depend on the traffic that arbitrators provide, as well as what kind of players there are, for instance for how much and for how long they will be playing. Therefore, when collaborating with webmasters, casinos prefer either a fixed payment for leads or a percentage of the profit. These payment models are more profitable for casinos than payment for app downloads or other models.
RevShare model
Next, we will analyze the features of each model:
RevShare or Revenue Share, is a payment model where the webmaster receives a certain percentage of the advertiser’s (casino) income for the entire time that the player referred by the webmaster makes deposits or loses.
- long-term payback of traffic – on average 6-12 months;
- you can receive passive income: attract several major players and then just monitor statistics and work on other projects;
- if a player wins, that is, the online casino suffers losses, the arbitrator’s earnings for the reporting period are reduced or reset to zero;
- revshare can be either lifelong or temporary – for example, after a few months, the advertiser, according to its terms and conditions, stops paying a percentage of the player’s income.
CPA model
CPA or Cost Per Action is a payment model in which the webmaster gets a fixed payment for the player’s target action. For example, for making a first deposit, for making a deposit equal to a certain amount, for example, not less than $50, less often – for resigning up on the casino website.
Features of the CPA model:
- you can easily make some quick money – attracting traffic using this model is easier and cheaper than using RevShare;
- your income is one-time and less than with RevShare, and if CPA involves payment only for registration – most often these will be very small rates;
- you won’t be able to earn money in passive mode – you will need to constantly launch campaigns and attract more and more new players;
- The CPA model is easier to start off with for beginners: RevShare requires more experience in gambling.
Hybrid model
Besides these two models, there is also a Hybrid model. It combines CPA and Revshare. For example, a webmaster receives a fixed amount for the player’s targeted action and then a percentage of the casino’s income from all subsequent expenses of this player.
Working with the Hybrid model is similar in complexity to RevShare: the advertising campaign must be organized in such a way as to convince people to not simply sign up, but to play regularly. This is more difficult than bringing in a lead or player with the first deposit. The Hybrid model requires high-quality traffic. But the difficulties are compensated by all the advantages of the RevShare model, plus the webmaster also receives additional income for targeted actions.
- an opportunity to agree to individual terms, and negotiate high rates if the webmaster shows excellent traffic and results;
- combination of advantages of CPA and RevShare: receiving money “here and now” plus income at a distance;
- advertising costs will pay off through CPA, even if not all players will continue to play;
- RevShare risks stay the same: the risk of going into negatives, the risk of the need to pay off debts to the affiliate with future income if a player wins against the casino.
Example of earnings’ maths + formulas
The CPA model is calculated based on the advertiser’s bid. Usually, this rate is fixed. For example, an advertiser might pay a nominal $80 for a player making a deposit. For some advertisers, the CPA value may vary depending on the source of the traffic. For instance, if an affiliate attracts a player from a cheap source like clickander – such traffic may be paid lower than traffic from social networks or ASO. It’s best to check with your manager in advance for details.
The RevShare model is calculated based on the formula offered by each casino operator advertiser.
Popular formulas
For example, one of the popular formulas is:
Affiliate marketer income = NGR x RSValue
- RSValue is the revshare percentage that is specified in the terms of the offer. For example, let’s say 50%.
- NGR or Net Gaming Revenue is the net profit of a casino after it has paid all taxes and other expenses, such as staff salaries, equipment rental, and so on.
The NGR value is usually calculated using the formula:
NGR = GGR – Bonus Fee – Payments Fee – Provider Fee – Admin Fee
- GGR or Gross Gaming Revenue is the amount that the player lost.
- Bonus Fee – the amount of bonuses that the player received. This amount is deducted from the GGR.
- Payment Fee is a commission of payment systems; they depend on the currency and the terms of these platforms.
- Provider Fee is a commission for licensed casino providers. The amount depends on the rules and policies of the provider itself, and on the slots that players play.
- Admin Fee refers to various operating expenses of the casino.
The GGR indicator is also calculated using its own formula:
GGR = TotalBets – TotalWins
- TotalBets – the sum of bets of all players;
- TotalWins – the sum of winnings of all players.
Which source is most suitable for revshare and which for CPA
When choosing a traffic source, you need to start by considering 2 important factors:
- Sources that are allowed or prohibited by an advertiser themselves. First of all, you need to exclude prohibited sources. For example, spam and adult traffic are most usually not allowed.
- Sources that are well known to arbitrators and what they know how to work with. If you already know of a source, it will help you to navigate the campaign settings faster, as well as use the client base you have accumulated.
Sources suitable for CPA model
- Advertising networks. This is an inexpensive source for webmasters with small budgets that offer wide coverage. You can test push notification formats, popunders, teasers, banners and much more.
- Targeted advertising on social networks. If you already have an understanding of the audience, as well as knowledge of the mechanisms of cloaking and bypassing moderation, you can launch a campaign, for example, on a gambling application.
- ASO and Google UAC. Working together, these advertising tools can attract good traffic to applications. It is important to correctly find an application provider, for example, a software company that rents out apps and provides quick replacements as well as to familiarize yourself with the ASO mechanisms.
- Motivated traffic. An important condition: an advertiser should not have a ban on such traffic. Usually, the motive is low-quality traffic; not everyone is ready to accept it. The point is that the arbitrator promises a small reward for visiting a casino website. If users are interested in this casino, they stay and start playing and making deposits – while the webmaster receives money.
Sources suitable for RevShare model
- Scheme traffic. For example, a channel on Telegram, Instagram, and other platforms that allows you to warm up the audience.
- Traffic from streams. A blogger with live streams will usually have a regular audience of fans and players. They are loyal to the streamer’s recommendations.
- Personal website, blog, social network group. Sources such as SEO or UBT are good because they form the core of the webmaster’s personal audience.
- YouTube doorways. This source is similar to traffic from streams. Users find videos on YouTube using keywords and gradually warm up.
CPA and RevShare: what to choose?
Pros and cons of working under the RS payment model
- Passive income. Webmasters can set up campaigns, and attract players, as long as they play – there will be money.
- Work with any traffic source. What is important for advertisers is not so much the source, but how often players will make deposits and lose.
- Using targeting and retargeting. You can gain a base of regular players, periodically send them lucrative bonus offers, and receive repeat income from those who have already made deposits
- Unpredictable income. You may receive no income at all, or receive very little income that will not cover advertising costs, that is, the campaign will be in the negatives.
- Long warm-up time. The advertising campaign should be strategic, aimed at warming up the player and motivating him to return to your casino. This is more difficult than launching a one-time campaign with a strong attraction to play at least 1 time, as with CPA.
- If a player wins, the casino and the webmaster are left with no money. Usually, casinos do not force the webmaster to pay debts if the player wins a large amount, but simply reduces the income by the amount of the player’s winnings or resets it to zero. But there are advertisers who make it the responsibility of the webmaster to compensate for losses with their future earnings. You will need to check with your PP manager about this.
Pros and cons of working under the CPA payment model
Advantages of the CPA model
- “Quick money.” A webmaster receives payment to the account immediately as soon as the player completes the target action.
- Money in any case. Even if the player wins at the casino, that is, the casino suffers a loss, this will not affect the webmaster’s income in any way. He gets paid for attracting a client.
- High payback rate. By adopying this model, you can quickly return and put back into circulation the money spent on advertising. This is important for affiliate marketers with small budgets.
- Lots of traffic and easy to advertise. According to Gitnux, 1.6 billion people in the world have gambled at least once in their lives. This number keeps increasing over time. People are interested in entertainment, they like to get emotions and adrenaline. Advertising for work under the CPA model is relatively simple: all you need to do is attract a player, give them a message to try at least once, and that “this does not oblige you to anything.”
- Lost profits. Webmasters can receive their bets for the deposit made by the player, and that’s it in terms of fulfilling obligations. If a player turns out to be a gambling addict and pours large sums of money into the casino, the webmaster who attracted them will not receive any reward for this.
- Campaign dependent. You need to ensure a constant flow of traffic so as not to be left without profit. This involves constant launches, searching for good consumables, costs for various services, antidetects, proxies, accounts and others.
- Long Hold period. Advertisers carefully study each incoming lead, since the CPA model, due to its features, is vulnerable to fraud. You can end up waiting for a long time before earnings come through.
For how long will the webmaster be receiving income from RevShare?
The answer to this question depends on the terms and conditions of an individual advertiser. For example, let;s say there are casinos that offer lifetime revshare. This means that the webmaster will always receive income – as long as the player plays. The attracted player can play for several weeks, months or even years. Thus, this is receiving passive income. In fact, income can be received until the casino itself closes down.
In rare cases, the advertiser will impose a condition that requires RevShare to be paid within a certain period if the player continues to play. For example, during the first six months. Then payments should stop. But such rules are less common; most often the revshare is for lifetime, that is, tied to LTV – the lifetime value of a client-player.
Conclusion
CPA and RevShare payment models represent different approaches to affiliate marketing. It is impossible to say which model is better and which is worse: each has its own characteristics. The choice should be determined by the webmaster’s strategy, their experience, plans, and preferences, as well as their budget. The RevShare model is risky but can bring more profit, while the CPA model is perfect for beginner affiliate marketers with a small budget and can also provide good profits, especially on large volumes.
