In this very review, Slotegrator’s experts have made a comparison between CIS and foreign affiliate programs currently present on the iGaming market and tried to answer the following questions:
- What are affiliate programs and what do they serve for?
- What are the main features of affiliate programs?
- What are their advantages and disadvantages?
- How to benefit from an affiliate program and choose the best partner program.
What is an affiliate program?
Partner or affilaite programs are considered to be the most effective tools in retaining and attracting of gamblers to iGaming websites. The principle of their functioning is as follows: partners advertise online gambling platforms and by doing so increase numbers of their customers. As a result, they get commission for each retained gambler.
In order to make the affiliate program bring certain income, partners should have at least basic marketing skills of retaining customers online. The basic skills include approaches that cover the needs of the target audience, legislative norms of the region of future operation and SEO promotion.
Currently, the majority of operators of online gambling platforms are offering such programs on par with the rest of services they provide. As for today, affiliate programs form their own concentrated market complying with specific rules and policies. That’s why operators are constantly competing for effective partners capable of retaining sufficient numbers of gamblers to their projects. Say, online casino A had launched an affiliate program and a big number of partners subscribed for it right away. Within certain time, they are starting to turn down some of the offered conditions and eventually unsubscribe. The reason for that is that online casino В has launched an affiliate program with way more beneficial conditions.
Moreover, the said casino offers a better choice of games, more convenient website navigation and greater variety of promo campaigns for gamblers that facilitate retaining of cusomers to this very platform. Consequently, online casino A is forced to take certain actions in order to keep their customers, for instance, to modernize the webpage, broaden their product line, or improve general terms and conditions of its affiliate programs.
In such a manner, for the majority of gaming platform operators, affiliate programs serve as valuable marketing tools enabling them to control the current situation on the market. Such tools help to react quckly, track competitors’ activities and take corresponding actions for further expansion of business.
Advantages of affiliate programs
Year by year online gambling is gaining momentum. This kind of business seems to be an everlasting cashflow that within development of the Internet and IT technologies only fortifies its positions. Participation in affiliate programs enables web masters to provide practically seamless payoffs. According to terms and conditions of the majority of affiliate programs, referal customers are attached to the partner for a lifetime. In other words, partners keep gaining income from their gamblers until the moment they stop gambling on this very gambling website. Gaming platforms, in their turn, also do everything possible to retain permanent and attract new gamblers: provide bonus programs, significant jackpots, organize tournaments, grant gift tokens on holidays, birthdays, etc. That’s why affiliate programs are so popular nowadays.
Affiliate programs and remuneration
There exist two types of affiliate programs: CPA and CPS. A CPA or “cost-per-action” program provides payments for certain actions, while
a СPS or “cost-per-sale” program implies payment for the sales made. In the first case, partners get fixed sums for their referals. Usually it happens in a form of payments for registration and 1st time depositing. This type of partner program is suitable for those who need to get immediate results due to significant volumes of traffic coming to the resource.
The second type of affiliate programs provides commission payments for all the wins gaind by referals, while they are gambling on the website. If partners consider using this program for a long time, it is preferable to select this very kind of an affiliate program. Hovewer, this type of partner programs has its pitfalls: if a gambler wins, partners lose certain percent out of their own funds. СPS balance accounting is carried out monthly. In this case, some gamblers zero out their negative balances, some transfer them to the next accounting month. Percentage of gamblers’ losses obtained by a partner is called Revenue Share. Participation in СPS partner programs is more beneficial for web masters. Different affiliate programs apply different formulas for calculations of Revenue Share commission, so it might account for around 20 or even 60% out of the revenue of a gaming platform. For instance, western affiliate programs offer their partners around 45% - 60% of Revenue Share under the СPS program and around $100–150 under CPA programs.
Let´s take a closer look at the main features of partner programs of this very type. It is also advisable to find out more about the notions of Gross Revenue and Net Revenue. Gross Revenue is a revenue not taking into account expenditures of the gaming website. Net Revenue is a revenue net of discounts and returns. In the majority of affiliate programs promising high comission rates, remuneration is calculated out of the net profit. This is one of the main tricks.
On the average, accrued expenses of online operators on administering and maintainance of their resource accounts for 25% and even more. However, as a matter of actual practice, these expenditures include everything: gamblers’ bonuses, guaranteed prize funds, winnings, anti-fraud preventive measures, expenses on advertising, etc. If foreign gambling operators lead more or less transparent businessess and submit reports on expenses, CIS operators usually do not disclose this kind of information. Moreover, western affiliate programs, while calculating their Revenue Share, make use of special algorythms counting revenue percentage according to the volume of the incoming traffic: the higher the volumes are, the higher the percentage rates are.
CIS affiliate programs and their features
While approaching Russian and CIS market, it’s worth noting, that online gambling, except betting in rare cases, is officially prohibited on these territories. For this very reason, if partners in terms of a promotion campaign, will come up with a decision to create an online gambling website they venture to be blocked by controlling bodies. Except legislative matters there exist other specific features of affiliate programs used in Russian online environment. Web masters willing to gain profits from online gambling, first of all, need to spend certain time looking for a good affiliate program. It is important to gather all the existing information regarding terms and conditions of payments and ways of money withdrawal, find out more on reputation of the resource and check the feedback from experienced web masters. However, unexpected things might occur, such as:
- Afiiliate programs might turn off gamblers from the rest of partners. It is necessary to realize that partner programs are valuable marketing tools aimed at gaining profits out of business. That’s why certain affiliate programs might use of dodgy approaches enabling them to earn even more. For instance, partners might announce that gamblers registered three years ago already belong to their affiliate program. Partners might get a certain type of compensation or their payment percentage might be increased, but some of them might not like such actions at all.
- CIS affiliate programs are not very customer-oriented compared to the foreign ones. There is a great difference between them in terms of attitude to partners. It can be explained by serious competition present on the western market contributing to better treatment of clients. Incomes of managers of western affiliate programs depend directly upon their effective interaction with customer partners.
- Managers of CIS affiliate programs are frequently involved into dodgy methods of competition elimination . For instance, while registration, partners are frequently asked about the ways of retaining they will use in their further work. If in western affiliate programs it serves as an additional benefit of selecting specific approaches aimed at covering the needs of each separate partner, in case with CIS partner programs, such an approach allows managers to take advantage of someone else’s valuable ideas.
- Moreover, CIS affiliate programs are known for their use of shaving. This very method is used with an aim of distortion of statistical data. It is either a deliberate action or a technical error.
Though the market keeps developing, the competition becomes even more serious and instances mentioned above are temporary.
Foreign partner programs and their features
Western affiliate programs seem very appeling due to commission they provide (usually in dollars), as well as are known for the size of the market they cover. The most important thing at this point is that in the majority of European countries online gambling is officially legalized and complies with certain applicable laws. Foreign partner programs are well-thought and very widespread, that’s why Europeans leave more money in online casinos than users of Russian online environments. Consequently, western affiliate programs are more reliable than CIS. It’s already a proven fact. Advantages of western affiliate programs:
- Large audiences of gamblers exceeding in numbers the quantity of players from CIS;
- Wider choice of partners;
- Higher paying capacity of the audience;
- Transparent and clear rules, transparent financial system of affiliate programs;
- Absense of legislative limitations restricting gambling activities.
Pitfalls of western affiliate programs:
- Competition on the western market is more serious than on the CIS market. In order to get serious money, one has to work really hard. The majority of niches are already occupied and it’s relatively problematic to start your online gambling business from scratch.
- Money withdrawal might take time.
Having analyzed CIS and foreign affiliate gambling programs, Slotegrator’s analysts have concluded that these two programs differ in the following:
Choosing between these two partner programs, web masters have to study carefully their terms and conditions and after that decide whether it is reasonable to continue working with a certain casino, poker room, betting office or not. It is necessary to analyze all the factors influencing the income and estimate all the possible outcomes.
As for operators, they should also understand clearly the conditions of affiliate programs in order for them to use such tools as effective means of marketing promotion.
The company Slotegrator has a vast experience of successful functioning on the iGaming market. Based on this, its professional team provides consultancy services assisting in development of effective partner programs.