The Silent Killer: Revenue Leaks in Affiliate Programs

Often I’ll write about revenue leak for affiliates but I know what that looks like for affiliate programs too.

Last week, I talked about Changelog for affiliates and focused on revenue leak for publishers. Now I'm turning the tables and pointing the arrow at affiliate programs.

If you’re an operator or an affiliate manager, this article is for you!

BTW quick shoutout to the newsletter supporters StatsDrone and FTDx.

PS for all you affiliate managers, if you want to join a Telegram group for affiliate managers, visit here.

In my experience as an affiliate manager, there were a ton of ways of leaking revenue. 

I’ll highlight some that are still relevant today:

1. Bonus hunters

2. Affiliate abuse

3. Super high exclusive CPA deals

4. CPA fraud

5. Affiliates not honouring deals

6. KPI & BI Alerts

Bonus hunters

It takes one to know one. 

I used to do bonus hunting a long time ago.

When I first started to manage a few casinos and the affiliate program, the first thing I did was look for bonus abuse.

It was everywhere and I shut it down fast. I ended up pissing off a few affiliates in the process. In one situation, the affiliate had 2 owners but the player was one half of the ownership and playing under their own tracking links. They were bonus hunting and a winning player and of course on any losses, they got …. revenue share commission!

They couldn’t argue with me so they just stopped doing it at the casino I managed. That is a perfect example of NIMBY!

Bonus hunting is still a problem for the industry, so much so that a company like Greco was created by … bonus hunters! Ozric Vondervelden and Ed Dickerson are 2 people that every operator should have on their WhatsApp or Telegram. Or whatever you’re using other than Skype. 

Just one thing that most affiliate managers and casino owners do NOT understand about bonuses. Just because the wagering requirements make the bonus to be negative expected value, doesn’t mean the bonus cannot be abused. 

Affiliate abuse

No, this isn’t where an affiliate is harassing you although that is a form of abuse. I actually don’t know the proper name for what I’m about to describe.

Imagine this scenario.

An affiliate has a site that probably has almost no traffic but has sent one depositing player that plays blackjack but without a bonus. They deposit $1000 and in the first time playing, lose it all, likely in a single hand.

The affiliate earns say $350 of that in revenue share.

Next month, the player deposits another $1000 and gets to $2000, all in a single hand. No cashout happens but the month closes as a -$1000 winner but with no negative carryover, the balance is reset.

Month 3, the player doesn’t deposit but loses $1000 and the account balance has gone from $2000 to $1000. The commission generated is another $350.

You see where I’m going with this? 

The affiliate is getting cashback in the form of revenue share commissions. No bonuses have been played but real profits are being generated. 

This to me is affiliate abuse whether you want to call it affiliate fraud or anything. It isn’t CPA fraud but it is still not cool. You might want to check your affiliate database for these types of affiliate accounts.

Super high exclusive CPA deals

I can’t quite call this fraud if the affiliate manager signs off on high CPA deals.

I remember a long time ago at the Casino Affiliate Convention in Amsterdam, yes I’m that old. I was hungover and had an 8am meeting with an affiliate. That affiliate wanted $500 CPA for their players. 

This was a ‘hell no’ from me and I was pissed that I didn’t sleep in for that BS meeting. 

I’m sure there are a lot of affiliates laying on the sales really thick getting insane CPA deals. Deals that I wouldn't be surprised that the affiliate manager hasn’t calculated or tested the traffic to see if there is any real ROI. 

This is where I think affiliate managers can care about the FTD at the expense of player value and retention. 

CPA fraud

CPA fraud could be negotiating a high CPA deal and sending fraudulent traffic such that the minimum thresholds are met to trigger the qualified CPA. Or rather qualified FTD or QFTD as what we call it inside the StatsDrone app. 

Affiliates not honouring deals

So if you’re an affiliate manager and you’ve negotiated say position 3 on a page for Canada. Are you tracking these rankings and better yet, are you able to track the performance of that affiliate beyond regular reports?

You might want your affiliates to have a special campaign link so you can at least monitor the performance. 

KPI & BI Alerts

Now this is a feature we have made for affiliates using Tableau.

This feature itself could also be duplicated for affiliate managers to track any KPI for their affiliates whether it is brand or campaign monitoring. 

Special shoutout to StatsDrone Head of BI & Analytics, Lynda Salem as she puts together a wide array of Tableau dashboards.

If you want help with this, let StatsDrone know!

Why are KPIs important to measure?

Simply put, you can spot good trends but just as importantly, you want to know if any affiliate is dropping in performance to see if there is anything you can do about it.

If you want a deeper dive into revenue leak, I recorded an affiliate marketing allstar named Niels Zee and it was epic. That episode will go live next week but he throws down some solid answers on how affiliates and affiliate programs have problems with revenue leak.