Poker affiliate programs are probably the first stop for poker webmasters looking to monetize their sites. And it’s easy to find poker affiliate programs; just click on the affiliate link on the homepage of any major (or minor) online poker room, and you’ll find the details on the poker room’s affiliate program. But I’m not convinced that poker affiliate programs are the best way to monetize your site at all. Poker affiliate programs are great if your site gets low traffic, but once your site becomes a real force on the Internet, you’ll probably be better off (in multiple senses) going with a flat advertising model. At any rate, the point of this post is to look at poker affiliate programs.

What are poker affiliate programs?

Affiliate marketing is a way for advertisers to get traffic to their site on a pay for performance basis. Amazon, for example, will pay you 5% of anything that gets sold through your affiliate link to their site. This way if the advertising that they’re getting from you isn’t worth anything, they don’t have to pay you anything. Affiliate programs are pretty popular throughout the Internet in various industries, especially the travel industry, the gaming industry, the retail industry, the education industry, and the personal finance industry.

Different affiliate programs offer different “commission structures”. Revenue sharing is the most common model. Whatever revenue you generate for the affiliate program, you get a percentage. If you’re selling $20 books via Amazon affiliate links, you have to do stunning amounts of volume to make any money. (You only get a $1 commission on a $20 book sale.) If you’re selling $200 hotel stays via the IAN affiliate program, you’ll do a little better, because they pay 5% on hotels stays, which means you make a $10 commission on a sale. But if you’re involved in the online gambling industry, it’s not unusual to get a much higher percentage of revenue sharing (say 25%) and much higher revenue numbers (say $2000). So you might make $500 per referral if you have high value customers.

Another way that affiliate programs pay out is on a CPA basis. CPA stands for cost per acquisition, and it means that you get a flat fee per customer sent. Again, the casino and poker industries offer the highest CPA amounts in the affiliate industry. A $100 CPA as a starting point for a poker affiliate program isn’t unusual at all, and if you can send enough volume, $500 CPA’s are possible too.

Why poker affiliate programs might be inferior to flat advertising deals as a monetization strategy

Most poker affiliate programs are pretty easy to do business with. But whether you’re being paid CPA or revshare, there is always a lurking suspicion in the back of a poker webmaster’s mind about whether or not the poker affiliate program is under-reporting his or her numbers. And since all poker sites are offshore operations, there are no regulatory organizations that a poker webmaster can go to as a recourse if something goes wrong. And what if you accidentally wind up promoting a “rogue” cardroom who decides not to pay commissions? Then you didn’t get paid for the advertising you did at all. (It’s happened.)

Compare that with the relative ease of getting paid a flat monthly advertising rate in advance for a six month period. Since you’ve been paid in advance, you don’t have to worry about not getting paid. And since you agreed to a prepaid amount that seemed fair to you, you don’t have to worry about whether or not the poker affiliate program is under-reporting their numbers. You already got what your traffic was worth. But best of all…

If you cut an upfront prepaid advertising deal, you’ll have the money upfront to reinvest in your site. You can spend that money generating meritorious poker content. Or you can spend it on building links to your site. That money will grow your business.

Let’s say you’ve built a poker website that gets 10,000 visitors per month. And let’s say you have five advertisers, each of which are paying you $1000 a month in flat advertising money, on a prepaid basis, for six months. Now you have $30,000 in the bank. Can you take that $30,000 and use it to turn that 10,000 visitor per month website into a 20,000 visitor per month website? I know I can. And once you’ve doubled your traffic and content, you can double your advertising rates. Then you’ll have $60,000 to use to build your website, and so on, and so on, until you have all of the money in the world.

I find poker affiliate programs to be a pretty neat concept, but poker affiliate programs are not and should not be the only option you pursue when you set up a poker website.

This entry was posted on Thursday, March 12th, 2009 at 6:57 am and is filed under Monetization . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.