Last week, we looked at how operators can use big data to deal with the challenge of inactive affiliates. In this week’s instalment of our four-part series on big data we look at how it can be leveraged to resolve another issue operators’ affiliate managers face – optimising the profitability of affiliates.
If your profit margin has been decreasing in recent months, some of your affiliates may not be performing as profitably as they could. Understanding why these affiliates’ profitability isn’t being maximised is the first step in turning around their performance.
Here’s how it can be done using the Income Access affiliate software:
1) Start by pulling a list of all active affiliates in the programme using the Member Report tool
2) Export a member list (e.g. Excel, CSV, XML or HTML) for the time period you are looking to compare in terms of profitability
3) Add an additional column at the end to measure profitability using the formula (=Net Revenue – Commissions)
4) Sort in ascending order to view the unprofitable affiliates at the top
5) Once you have determined which affiliates are unprofitable, run an Account Report to look at individual player data and determine exactly why the affiliate is unprofitable
Affiliates can be unprofitable for different reasons. They may have many individual small player wins or have one or two excellent players that consistently win. Alternatively, they may have suffered from one large player win that skews the results for the period. Lastly, they may have only forwarded one or two players in their lifetime, limiting their profitability.
For affiliates with many individual player wins, there are two courses of action:
Firstly, if the affiliate is consistently sending bonus hunters, it may be advisable to cease the business relationship if a suitable compromise can’t be reached.
Secondly, if the content on the affiliate’s site is geared towards high volume but low quality, suggest content-based solutions to encourage higher quality players.
In cases where you have a number of high-rollers causing fluctuation from month to month, consider employing a high-roller policy to better regulate pay-out totals. If there’s one large player win skewing the results, don’t fret – it is gambling after all.
If an affiliate seems inactive, examine whether they are still forwarding traffic. If not, employ strategies to activate this inactive affiliate.
In addition, it is essential to review the individual commission structures that each affiliate is on. Check if the CPA value may be inflated or if the hybrid structure is unprofitable. In other cases the revenue share might be too high, making it very difficult to be profitable on a month to month basis.
How do you as an operator and affiliate manager overcome the challenge of unprofitable affiliates? Tell us your views in the comments section below or, alternatively, drop me a line via email.
The post Big Data & System Reporting: Optimising the Profitability of Affiliates (Part Two of a Four-Part Series) appeared first on .