Transitioning From MGR/CPA to Paid Advertising - A Few Suggestions
Posted by: Jeremy Comments: (3) Date: March 13, 2008If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!
Lately, there has been a lot of talk in the poker affiliate forums amongst the members about “paid advertising”. For those not familiar with the paid advertising business model, it is very different than MGR and CPA. Paid advertising is a media buy from an online poker sites marketing department. With paid advertising, you do not share in any of the revenue of the players, nor is your compensation based upon the number of players sent.
You are paid a negotiated fixed rate as an online advertiser or webmaster, and not necessarily as an affiliate. This sounds very appealing to many webmasters, and it can be a win/win for both. A webmasters reasoning for taking a fixed rate advertising fee versus MGR or CPA can vary. Often times it can be simply because it is a more stable, predictable, and reliable form of income.
If you’re an existing poker affiliate and considering taking paid advertising, I’d like to lend a few suggestions.
1. Offering a paid advertising spot on your site should not simply be a way to take a non producing spot and monetize it! Too many webmasters do this and it is one way ticket to not getting renewals. Sure, there is some value in branding on certain sites, but most media buys are done to produce ROI and new players, just like affiliate deals. If you are selling ad space on your site, that you know from experience doesn’t produce CTR’s or new players, you are doing the room a disservice. You’re paid advertising model will crumble very quick.
2. Selling paid advertising requires you to show even more value than negotiating a higher CPA rate. Be prepared to show a potential advertiser past analytics for your entire site, including the spot they will be located. Media buyers are numbers people, and they want as much data and stats as you can give them.
3. Add value, Add value, and then add some more value - Don’t just “sell a spot”! Be professional. Have a media kit designed with all your up to date information including screen shots and all the relative data. Show everything such as traffic and SEO analytics. Give more than just an ad spot. Do some geo-targeting and have foreign language pages. You’d be amazed at how much more attractive your site becomes to media buyers. Allow your potential advertiser tons of flexibility. Remember, you are not an affiliate in this instance. You need to add value, and then you need to SELL it.
4. Don’t just guesstimate what the real estate on your site is worth. Run a few campaigns each month through your affiliate accounts and get an average of how many players you can send. If you monitor and test these each month with a few different rooms, you should have a good idea.
5. Pricing - Everyone wants to know what to charge! If you do #4, you should have a pretty good idea. Lets say your leaderboard 728×90 banner consistently sends between 3-5 RMP’s a month for the last 5 months. Now assume your average CPA is $100. It would be fair to charge $400 for this spot. And the beauty is you know this, so you can convey it to your media buyer. Trust me, this will make life much easier.
In closing, many people look at entering into paid advertising versus MGR/CPA for the wrong reasons. It’s not just easy money and a way to sell garbage real estate on your site that doesn’t produce affiliate revenue. It’s a different kind of partnership with the rooms. Ideally you are trading off affiliate revenue for fixed advertising. It’s NOT about getting fixed advertising money for spots that never earn affiliate revenue.
If you have any other questions regarding paid advertisng, don’t hesitate to contact Greg or Jeremy. Even better start a thread in the largest poker affiliate forum in the world!
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March 13th, 2008 at 5:34 pm
The point you made that stands out to me is that while selling an advertising spot on your portal might not be to difficult, taking into consideration you have a nice design and a good traffic ranking. However, making any kind of sustained income will be impossible if they spot does not convert.
I once paid $7/click (seriously, per click) on a site and still made money on it! if you have a network of sites and don’t have time to manage them all and feel you could profit from a pail advertising model than by all means do it. However, don’t sell yourself short. If your clicks are worth $7 then PLEASE get on an MGR deal
March 13th, 2008 at 6:22 pm
I believe that most of the time the spots being offered will bring little to no return to the advertiser.
Most affiliates would prefer a CPA / MGR deal than renting a valuable spot because of the possible loss of money. So they prefer to rent bad spots on their sites. However, I agree that a well organized company would never renew the agreement with such affiliate.
March 13th, 2008 at 8:33 pm
Yea, I agree, there are lots of affiliates that do the paid advertising model for the wrong reason…..(because they know, they’re spots generate no revenue). Most media buyers are keen to this however.
On the flipside though, there are many larger sites that do paid advertising for legal reasons, or because it makes financial sense to know exactly how much real estate they have on the site, and exactly how much each spot will make each month.
Some people will trade the higher MGR or CPA revenue for the stable guaranteed money.