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(This article was written in early 2005. A lot has changed in the industry since then, so I have written a follow-up article entitled: CPA vs Revenue Share – Update)
A question that is posed by many new poker affiliates when given the option is: Do I take CPA or revenue share?
Let me briefly explain what these are. CPA is Cost Per Acquisition, where a poker room pays you a set fee for every player that you bring in, regardless of their earnings. Revenue share is where you get a percentage, usually starting at 20%, of all the players revenue that they generate. Some people suggest if you’re just starting out or in it for the short-term to go for CPA, while long-term look more towards revenue share, however then you have to remember this old adage:
With CPA, someone’s always getting screwed.
That’s not to say that CPA doesn’t have it’s uses, or that you should never, ever use it, however a true poker affiliate, especially one that is wanting to be successful, should be on revenue share from day one.
Let’s look at CPA for a second, and we’ll use the Party Poker Affiliate Program as an example of this. Party Partners give you the option of starting off with CPA or revenue share, either $65 per player that you bring in, or 20% revenue share.
Scenario A: You bring in 5 new players, all of whom are “bonus whores”, clear the 20% to $100 sign-up bonus at $0.5/$1 and withdraw. The total revenue paid for those players would be approximately negative $300. On a revenue share plan, you would earn no money at this point and would actually be in the red. Not a good thing huh? So CPA is best for this scenario right?
Wrong.
Here’s what happens; your account manager looks at your stats. He sees that you are owed $325 affiliate funds due to CPA. However, he sees that your account is in the negative, so what does he do? He blocks the funds not allowing you to withdraw until your stats increase, so that Party Poker are actually making money before you make money. This is standard business practise, and it happens all the time with new poker affiliates who go the CPA Route.
Scenario B: You bring in 5 new players, all of whom start playing the $10/$20 tables, multi-tabling. They generate $8,000 in revenue in the first month. If you were in revenue share, you would get 20% of that, or $1600. On CPA, you’d still get just $325. In scenario A, with Party losing money, they refuse to pay the affiliate until revenue increases. In this scenario, will they give the affiliate any kind of bonus? Nope. You’re stuck with that one-time $65, while your players generate $100,000 per year for Party, and you miss out.
Someone’s always getting screwed, and it’s usually the affiliate.
The poker room is out to make money, simple as that. They’re not going to pay an affiliate money who is actually losing them money. It’s standard business procedure, and there’s nothing at all wrong with what the poker room is doing; it’s just yet another reason why CPA is such a bad choice.
So remember, when signing up as an affiliate for a poker room, if they offer both CPA or revenue share, go with the revenue share. Even if your players aren’t high rollers, it’s better to earn $20 per month from a player, than a one-time $65 that you might not even receive, isn’t it?
(This article was written in early 2005. A lot has changed in the industry since then, so I have written a follow-up article entitled: CPA vs Revenue Share – Update)
This article was written on November 24, 2006 however all articles are looked at on a monthly basis and updated to keep them relevant.
If you need to contact Graeme, please see his Contact Page. If you are an affiliate manager wanting promoted please see this page.
