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Discussion in 'Real Revenue Share Audits' started by Guard Dog, Dec 20, 2018.
@Stephen could you be kind enough to address the above?
I am also interested in this. Would be nice with a reply.
Firstly apologies for my delay in replying to this thread. It has been a rather busy start to the year.
We understand that we may have one of the highest in the industry, unfortunately a lot of affiliate programs do not publish their fees so it would be difficult for us to confirm whether we have the highest – this is why we do believe that AGD audits are a good thing, it would be great however for our direct competitors – such as Kindred, VideoSlots or indeed Betsson to also be audited as they work in our main markets such as the Nordics.
We are currently a publicly listed company and I believe our results in terms of growth are a testament to our brands and our ability to retain customers. We have paid out over 27 million to our affiliate partners in 2018 with an average Reg to FTD conversion rate of 45%.
We see a direct correlation between both non-affiliate traffic and affiliate traffic when we are heavily advertised on TV – when we have a heavy TV month, affiliate traffic naturally increases, as does it decrease when we are not on TV. You are correct in saying that affiliates are important to brand awareness - of course you are and in 2018 contributed to 40% of all our acquisition, however, I would dispute your claim that we get branding free from an affiliate – we pay for that via revenue share for the lifetime of the player – that’s the whole point of RS – continued promotion. I would also like to add here that we have No negative carryover and absolutely NO quotas – life does mean life for us.
These percentages are taken directly from our finance department and actual figures from our 2018 accounts – these are the figures used to report our EBITDA budgets to the market.
Our transactional costs are as you say payment processing fees and as you may be aware - in our main markets ie the Nordics payment fees are much higher than in the rest of the world.
Unfortunately, as we have said previously, we are working to reduce these if possible but it is not an overnight fix. Our different teams - be it product, payments etc control the operational deductions and it's their job to negotiate our contracts to reduce our expenditure – we as an affiliate team are unfortunately not in a position to change this ourselves – we can suggest changes but at the end of the day is a management decision.
We understand yours and others frustrations but we have never shied away from explaining our calculations, this is something that we have brought to the attention of and discussed with ADG before especially as we are platinum sponsors here.
We are fully open to discussing increased deals to mitigate the fees such as hybrids / CPA’s. We are not holding a gun up to anyone to promote us, we can negotiate a deal with you to work with us but if this is not possible and you do not wish to work with us that’s also fine. It's the choice of each individual affiliate should they want to work with us or any other affiliate program. As I said we are always open to discussion with anyone.
Stephen, why don't you state the 38% admin fees in your terms? It feels like these numbers are only known in some threads in forums like these.
To follow up on my statements above - Stephen investigated and resolved my issue with reporting - I had another account I had missed that showed all the missing activity.
If life really means life with Comeon, I would have no hesitation promoting them, regardless of fees. This is a long game for me and manageable long term gains outweigh unsustainable short-term ones.
We are currently working on the T&Cs of the affiliate program to be in-line with marketing regulations, such as UKGC and Sweden, We will be looking to add in the actual fees per brand then. Please note that the fees of 38% are only for some of our brands. These fees only are the legacy of "Earn Affiliates" brands but we will endeavour to make this clearer in the near future.
You mean additional "fees" such as gaming tax which the affiliates will need to soak up as well for newly regulated markets such as Sweden?
Has there been any updates with the terms and conditions? These brands look very interesting.
My claim was that you are claiming that heavy TV advertising is good for the affiliate, my claim was and is that it is not that simple. I was talking about the coverage and number of accounts already on the market that visits the affiliate's website. Organic and affiliated accounts, that can't be tracked the affiliate anymore, since these accounts already exist.
However, thanks for the reply. It's a bold move to post these type of claims publicly, but standing behind those, even with ill-advised math and stats (that are given to you by management/finance), it's even bolder. So hats off. Could take this one step deeper but let's hope the management does the right thing soon and gets these fees to a reasonable level. And by reasonable I mean that actually cover these fees, and not rip off partners with multiples.
I appreciate Stephen giving the full detail - as much as he was able to do so.
Taking a 38% fee slice from Gross Gaming means all revshare figures are calculated on 62% of the losses.
So the HEADLINE figure of 40% net rev-share (after fees) should be considered as roughly 25% gross revshare (40% of 62% = 24.8%)
Stephen I think you are right that you are making things open and obvious - but your program would be better off with affiliates if it avoided the "puffery" of stating 40% share.
Just state 25% gross rev share and be done - people will know what to expect.
Exactly this! This is the thing that annoys all affiliates. The false advertising covered with vague terms and conditions and false promises.
I mean we will be looking into adding the actual fees per brand whilst we are making T&Cs changes to be in-line with marketing regulations. The main point in these marketing regulations changes to the T&Cs is more based around making things clearer about what affiliates can and can’t do in regulated markets. When these changes are made, as said, we will look to add in the actual fees per brand to make it clearer.
The T&Cs changes are already being looked at and will be posted here on AGD once approved and have gone live. As always, we will share these with AGD first to get their insight and approval on them as are a platinum sponsor.
While I understand your side the increased brand exposure via TV ads does help the brands and make them more recognised when players are deciding which brand to go with on affiliate sites. We do see a direct correlation between both non-affiliate traffic and affiliate traffic when we are heavily advertised on TV. However, as said, we do understand the importance of affiliated traffic as this contributed to 40% of all our acquisition in 2018.
While I understand and see your point of view, this is made harder by the fact not all our brands are calculated this way. These fees only are the legacy of "Earn Affiliates". The old “Cherry Affiliates” brands are still calculated as they were previously. Our aim would be to have these fees the same across all brands so we can be clearer in how we can state this.
We appreciate all your feedback on our fees and as we have said this is a discussion we have been having with management prior to our migration. We are always open to answering any question that any of you may have, while also discussing increased deals to mitigate the fees. When and if changes are made to our fees we will be sure to discuss this with AGD and display them in the correct places needed.