CPA vs RevShare: what to choose? Material based on Vladimir Luchaninov’s presentation
A choice between CPA and Revenue Share models is hard because of certain risks on both sides. A CPA affiliate program is appropriate for those desiring to earn as fast as possible, while RevShare is for those aimed at long-term stable income. Vladimir Luchaninov, the Head of Acquisitions at Firelink Media, told Kyiv iGaming Affiliate Conference how to choose a proper affiliate program format.
The article contains presentation key points.
CPA: operational concepts
CPA (cost-per-action) is a format of affiliate program where one is paid for a certain action: for instance, entering a website, filling out a registration form, subscribing to a newsletter, etc. Besides, PPA (pay-per-action) partnership. CPA and PPA are fairly similar as they suppose the payment for the performed action on the advertiser’s website.
“If you want to deal with CPA, you might think: wow, I have brought 100 users to the website, thus I have to be paid 100 multiplied by the promised sum. However, the affiliate program is not going to pay. It will pay only for high rollers." Vladimir stresses.
These are the key risks of CPA operations: a definition of high roller directly depends on the affiliate program. Vladimir mentions that, in some cases, they can even hardly count high qualified players (high rollers).
RevShare: operational concepts
RevShare, or Revenue Share, is a model of affiliate program where a webmaster receives a percent of generated revenue. For example, partners attract players to online casinos and obtain a percent of their losses.
Generally, specialists recommend starting working with affiliate programs via the CPA pattern and shifting to RevShare only after gaining some experience.
RevShare’s general formula is the following: RevShare = NetRevenue* reward percent.
*NetRevenue is a gross income that casinos receive from a player invited by the partner. It can be either positive or negative (i.e., losses mean players’ winnings).
This is just a one side of the RevShare coin.
“RevShare has a more difficult concept than CPA. A purchase funnel in CPA is the final action, while it is just the beginning in RevShare. You will receive much less benefits using this affiliate program than using CPA. But when considering the situation in terms of four years, RevShare will pay you two times larger than CPA,” Vladimir says.
However, not all affiliate programs manage to exist up to four years, which means that your earned money can vanish. Therefore, you should carefully monitor the market and select only time-proven programs.
CPA vs RevShare: what to choose?
“Beginning webmasters do not know whom they can trust and prefer CPA. Nevertheless, RevShare is more profitable on a long-term horizon, as CPA affiliate programs have lots of risks,” Vladimir confirms.
CPA is a kind of fee where webmasters get a certain sum for each trader. It can also offer disadvantageous conditions: for example, to make a webmaster receive payment, a trader should put money into the affiliate program’s account within 12 months.
At the same time, RevShare is a common model of life income where one pays a specified percent of revenue generated by a customer. RevShare’s percent can primarily reach 5%; 25% is maximum. Consequently, if the webmaster’s online casino client obtains $100 000 within three years, the webmaster will earn $25 000 at best.
Luchaninov recommends you not to focus on a single model of affiliate program but to test as more options as possible. CPA can be used to examine the situation. Later on, you can try RevShare, having necessary experience.
“In general, traffic generation and monetization is a quite complex mechanism. To achieve monetization, it should be sliced and diced, as well as be always advanced. Even a minor overlooked detail can destroy everything,” the expert sums up.