iGaming affiliate programs allow affiliate marketers to earn a percentage of the revenue (commission) generated by iGaming operators. On the other hand, it offers operators the unique opportunity to tap into the massive iGaming market, gain popularity, and build a strong reputation.
But the world of commission structures is pretty intricate and needs to be approached with due consideration of several factors influencing it.
In this post, we will dissect various commission structures and their role in iGaming affiliate marketing. We will also throw light on the process of establishing a structure that helps you achieve your revenue goals while retaining the best affiliates on board.
Significance of Commissions in iGaming Affiliate Marketing
iGaming affiliate marketing works in several commission structures, each with pros and cons. However, crafting an ideal commission structure is central to incentivizing your existing affiliate marketers and attracting the right ones for your iGaming business.
Having a clear commission structure comes with several benefits –
- It ensures the rewards are targeted and effective, attracting efficient affiliate marketers motivated to get you maximum business. Plus, it encourages affiliate trust.
- It maximizes the ROI and fosters deep relationships with affiliates.
- The personalized tiers based on affiliate type, performance, traffic, and bonus commissions increase affiliate engagement and loyalty.
- Allows operators to comply with the iGaming regulations and avoids misleading and unfair practices.
- Affiliate managers leveraging iGaming affiliate software can automate calculations, track performance, and gain insights. This significantly reduces errors and optimizes the process.
- The performance data available to affiliate managers can be openly shared with affiliates, thereby fostering a culture of trust and transparency.
Thus, commission structures are critical when analyzing affiliate performance and ensuring they get rightly compensated for their efforts.
Now, let’s look at a few popular commission structures that help iGaming operators and affiliates maximize their earning potential.
Popular Commission Structures
CPA or Cost Per Acquisition
CPA is one of the most popular commission types. The affiliate gets a one-time payment when a visitor deposits or performs an agreed-upon action on the iGaming platform. This model offers immediate rewards to affiliates once they meet the pre-arranged criteria.
The average fixed cost depends on factors like the iGaming niche, the targeted region, and more.
FTD or First-Time Deposit
First-time deposit is a subcategory of the CPA and is widely used in the iGaming industry. This commission type is quite beneficial for operators as it increases acquisition rates. The operator chooses whether the commission will be percentage-based or a flat fee.
The affiliates prefer this model because it has an incentive is tied for players who make the first deposit, making their task of customer acquisition easy. The FTD commission model generates a commission for the affiliate each time the player makes a first-time deposit.
Revenue Share
This commission model is quite attractive to affiliates as it enables them to earn revenues in the long term. So, instead of a one-time commission for an action, affiliates receive an ongoing commission for as long as the player is with the brand or for a fixed period.
The paid share varies based on the brand. At times, it’s progressive, depending on the number of referred players coming on board.
For instance, the operator can share a structure like –
1-9 players per month – 25% commission
10-49 players per month – 30% commission
50-99 players per month – 35% commission and so on.
Hybrid
This commission type combines CPA and revenue share, allowing affiliates to earn a fixed commission upfront and a percentage of the revenue generated over time. Thus, it offers the best of both worlds, encouraging affiliates to work harder to acquire players.
For instance, affiliate programs can offer $50 CPA and 25% commission for a paying player during the first 3 months. The upfront amount and the percentage vary according to the location, target audience, payment method, and other factors.
PPC
The payment in the Pay per Click commission type is linked to the number of clicks that lead the player from the partner website to the iGaming website.
The model helps attract interested traffic to the iGaming website, especially when ranking for competitive iGaming keywords is tough.
Pay Per Lead
This model offers a commission on each lead generated. The affiliates get paid when the operator receives the contact information of an interested player The action could be a registration, survey participation, trial sign-up, or form submission.
The commission rates with PPL tend to be low as the lead conversion is usually lower than actual sales.
Pay Per Impression
In this commission type the affiliate gets paid for each impression generated through their referral link. To earn this commission, the affiliate need not generate a lead or even a click – only an impression works.
That’s the reason why PPI commission rates are low as it’s pretty effortless to generate impressions.
Key Considerations When Configuring Commission Plans
Here are a few points to bear in mind when working on a suitable commission structure for your affiliate programs.
Select Suitable Affiliates
For your affiliate programs to be successful, you need affiliate partners who understand your industry and target audience.
When selecting an affiliate, pay attention to their player demographics, content relevance, engagement metrics, consistency in performance, traffic quality, communication skills, brand alignment, acquisition costs, and compliance with the local iGaming regulations.
Be Transparent with Your Affiliate Partners
When planning affiliate programs, it’s critical to be transparent and fair with the affiliates about the real amount of commission. Make sure you include the transfer deductions, the applicable taxes, penalties, and any other amount that will be deducted.
Also, inform your affiliate partners in advance to avoid disagreements that can weaken your relationship with them.
Set clear terms and conditions like –
- The commission they receive after someone clicks their link for a specific period.
- Your payment schedule – is it weekly, bi-weekly, or monthly?
- What payment platforms and methods will you use? If your affiliates are spread across the globe, it’s best to research which currencies/ payment services you will need.
- How you will track their performance – through web cookies or an affiliate marketing platform?
- What is the offer duration? For instance, you can offer a higher Revenue Share for the first three months when a new player registers and then continue with a CPA-based commission throughout the year.
Analyze Competitor Rates
Offering attractive commission rates gets you the attention of fitting iGaming affiliate marketing firms or affiliates who can bring more players to your platform. It can be tempting to keep the commission low to increase profits; however, you will observe that offering higher rates results in quick conversions.
Research your competitors’ commission strategy and consider other factors such as margins, customer acquisition costs, and discounts or promotions.
Review these questions to get a better understanding of your competitors –
- What actions trigger the payout? Is it a sign-up, purchase, subscription, or something else?
- Do they offer a percentage or fixed sum for a referral?
- Have they included VIP commission for their affiliate programs?
- Do they use a tiered commission structure?
Such information will help you choose the right build lucrative affiliate programs that get you the revenue growth you are looking for.
Determine How Much You Should Pay
To get this right, you need to consider several factors like the primary commission structure (discussed in the next point), the customer lifetime value, and bonuses.
Knowing the customer’s lifetime value will allow you to assess the cost-effectiveness of your commission. Further, each player has a unique potential to fetch profits and this depends on factors like their deposit amount and location.
Affnook allows you to effortlessly calculate the player’s LTV, NGR/GGR, bonuses, and wins. Also, the affiliate software has a flexible and customizable commission structure that enables you to set commissions based on the location, deposit amount, and other parameters.
Develop a Primary Commission Structure
No doubt, you need to have custom commission plans for specific affiliates. However, it is wise to develop a general structure (an average affiliate commission rate) that can be shared on your website and other marketing channels.
This way, you will be able to operate with various types of affiliate commissions seamlessly.
To begin with, set a low commission rate that offers you the flexibility to increase it later. Also, consider the average customer lifetime value and the competitor’s commission before making a decision.
Also, think about how you will handle negative carryover – will it be continued to the next month or reset it after a set period for consistent performers?
Think About a Commission Bonus
Your top-performing affiliates deserve a commission bonus if they are consistently fetching you players. Bonuses encourage them to get you more sales.
For instance, you can consider –
- Higher commissions if they have crossed a specific sales volume.
- A one-time bonus for a specific sales volume.
- Recurring bonuses if the player renews their subscription.
- Special surprise bonuses for effective affiliate marketing firms and affiliates at random times or during the festive season.
- Rewards for introducing new affiliates. Affnook allows you to set referral commissions, conditions, and settings, and track referral affiliates instantly.
Stay Compliant with the Local Regulations
It goes without saying that to uphold responsible iGaming practices, your affiliate commission structure should adhere to the local gambling regulations. This is central to avoiding penalties, loss of reputation, violation of customer rights, and misleading and unfair practices.
Pay attention and adhere to the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA).
Choose a Suitable Affiliate Program Software
An iGaming affiliate marketing software can help operators and affiliate managers with commission model flexibility, automated tracking and reporting capabilities, customizable tracking, and enhanced analysis.
Thus, with the help of this affiliate software, you can streamline your iGaming affiliate marketing efforts and attract top-performing affiliates to your affiliate programs.
Affnook is a customizable affiliate management solution that allows you to build and manage high-converting affiliate programs through its custom/ tiered payout models.
With Affnook you can –
- Set a commission model that scales with performance. You can customize these commissions at a granular level.
- Align commissions with KPIs that define your business through custom commission variables.
- Control negative carryover rules on an affiliate basis.
- Block data center traffic, blacklist suspicious IPs, block high-risk affiliates, and filter unknown devices with our advanced fraud detection and prevention feature.
Moreover, our affiliate management software offers accurate attribution tracking, seamless API integrations, invoice automation, fraud detection, and affiliate management.
Summing Up
Understanding various commission structures used in the iGaming affiliate world is key to designing lucrative and successful affiliate programs. The valuable insights shared in this post will guide you through the complexities that prevail in this domain, enabling you to maximize your earning potential and achieve your goals..
Choose Affnook to power your affiliate marketing efforts and gain access to an in-depth analysis of your affiliate program. With Affnook, you can –
- Manage affiliates, campaigns, and payouts – all on one user-friendly dashboard.
- Gain real-time reports within 10 minutes.
- Automate and generate affiliate invoices.
- Add endless customizations.
Talk to our sales team now to scale your iGaming affiliate program.
