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What’s better – CPA or Revenue Share?

01.11.2023

The iGaming industry is one of the most lucrative and competitive niches for online affiliates. However, choosing the right commission model can make a huge difference in the profitability and sustainability of an affiliate business. In this article, we will compare two of the most common commission models in the iGaming industry: CPA and Revenue Share.

What is CPA?

CPA stands for Cost Per Action, and it is a commission model where affiliates receive a fixed amount of money for every new depositing player they refer to an iGaming operator. The amount of CPA can vary depending on the quality and quantity of the traffic, the type of game, and the operator’s policy. Typically, CPA commissions range from $50 to $150 per player.

What is Revenue Share?

Revenue Share, or RevShare, is a commission model where affiliates receive a percentage of the net revenue generated by the players they refer to an iGaming operator. The percentage of Revenue Share can also vary depending on the factors mentioned above, but it usually ranges from 20% to 50%.. Revenue Share commissions are paid for the lifetime of the player, as long as they remain active and generate revenue for the operator.

Pros and Cons of CPA

CPA has some advantages and disadvantages for affiliates, such as:

  • Advantages:
    • CPA provides immediate and guaranteed income for affiliates, regardless of the player’s behaviour or performance.
    • CPA is useful for affiliates who need cash flow and funds to reinvest in their business.
    • CPA is less risky and more predictable than Revenue Share, as affiliates do not depend on the operator’s profitability or the player’s loyalty.
  • Disadvantages:
    • CPA limits the earning potential of affiliates, as they do not benefit from the long-term value of the players they refer.
    • CPA can be affected by the operator’s terms and conditions, such as minimum deposit requirements, wagering requirements, or negative carryover policies.
    • CPA can be harder to negotiate and obtain from operators, especially for new or small affiliates.

Pros and Cons of Revenue Share

Revenue Share also has some advantages and disadvantages for affiliates, such as:

  • Advantages:
    • Revenue Share allows affiliates to earn passive and recurring income from the players they refer, as long as they remain active and generate revenue for the operator.
    • Revenue Share can result in higher and more scalable earnings for affiliates, especially if they refer high-quality and loyal players.
    • Revenue Share can create long-term and mutually beneficial relationships between affiliates and operators, as they share the same goal of maximizing the player’s value.
  • Disadvantages:
    • Revenue Share can be delayed and uncertain, as affiliates have to wait for the operator to report and pay the commissions, which can take up to several months.
    • Revenue Share can be affected by the operator’s performance and profitability, as well as the player’s behaviour and retention.
    • Revenue Share can be risky and volatile, as affiliates can lose money if the players they refer win more than they lose, or if they stop playing altogether.

Which Model is Better?

There is no definitive answer to which commission model is better for iGaming affiliates, as it depends on various factors, such as the affiliate’s goals, strategy, budget, niche, traffic, and preferences. However, some general guidelines can help affiliates make an informed decision, such as:

  • CPA is better for affiliates who:
    • Need immediate and guaranteed income to cover their expenses and reinvest in their business.
    • Have low-quality or low-volume traffic that is unlikely to generate long-term revenue for the operator.
    • Prefer less risk and more predictability in their earnings.
  • Revenue Share is better for affiliates who:
    • Want to build passive and recurring income from the players they refer, and benefit from their long-term value.
    • Have high-quality or high-volume traffic that is likely to generate consistent and profitable revenue for the operator.
    • Prefer more risk and more potential in their earnings.

Conclusion

CPA and Revenue Share are two of the most common commission models in the iGaming industry, and they both have their pros and cons for affiliates. Affiliates should carefully weigh the advantages and disadvantages of each model, and consider their own goals, strategy, budget, niche, traffic, and preferences, before choosing the best commission model for their business. Ultimately, the best commission model is the one that maximises the affiliate’s return on investment and aligns with their vision and values.

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