The advantages of Socialist Affiliating
There are many ways to sell your product. Let’s say you own a poker site and want players. You can get in contact with affiliates and propose some offers. Let’s say you give them 50% of the profit that the affiliate brings to the site (some affiliates get way over 65% at some sites). I´ll not confuse you with terms like net margin, net win, revenue share. So for simplicity´s sake, I´ll call it Rakeback.
Now in order to be attractive to players, the affiliate also has to pass on some percentage to their players. The more sophisticated the players are, the more they have to pass on in order to not lose them to another competitor. Often this can be as high as 48%, leaving the affiliate with a bare 2% margin. Well, if you have a high volume player that´s raking 5k/month, $100 isn´t that bad over all – every month we speak – without having to do anything for it.
Assume you have a couple of those players. Simple math will draw a powerful conclusion. Since everybody wants more though, it’s not enough to keep status quo. There´s a big market and a highly competitive and free market is paradise on earth for any customer. Sounds great?
When the competition starts to wound everybody
Well, there´s a downside to it. Soon the affiliates will be forced to ask the site for a better deal, because due to competition, they can no longer profitably advertise players . After all, why would they invest hard work, if they´re going to lose them next week, because there is a better offer out there. So what ends up happening is that the poker blog site will increase the % for affiliate. But this is a very short term solution and actually the beginning of a downwards spiral. The fire is extinguished, but the problem isn’t solved. You´ve just cut the weed, but you didn´t go down to the root. Thus, soon enough, the same problem will occur, but stronger. Very roughly, this is what has been happening on Ipoker lately.
One other negative side effect is that only the biggest affiliates can compete for players. Small affiliates couldn´t afford to survive and were muscled out by the big boys.
The tragic result: Nobody is profiting anymore. Even the players are suffering, because there are not enough fish. Ipoker will have to do some homework to get this fixed.
Introducing the concept of Socialist Affiliating
There is a better way to do it. Many sites practise it and I´ll be so free and peg it “socialist affiliating”.
If I had to describe it in one line, I´d say
“every PLAYER gets the same maximum percentage, no matter what” .
Please do NOT confuse this with every affiliate getting the same %. Affiliates with a higher turnover deserve a better deal. The socialist part of this method is that the poker site sets a maximum on what affiliates can pass on to players, which has two positive effects:
1) Affiliates and poker site keep a margin, that let’s them pursue a healthy business
2) Small affiliates will also feel safe when advertising new player. By safe, I mean, they don´t have to worry about losing the player, because they are by contract not allowed to give more than a certain percentage to players.
This again, benefits the site, too, because they will get more players. Many poker sites actually do business this way, because they think long term. On Full Tilt, Ultimate Bet, Absolute Poker, Bodog, Cake network (sites like doyles room and power poker belong there, too), PKR, Everleaf (victory poker) socialist affiliating is reality.
How I affiliate and use socialist affiliating
I personally work together with PokerAffiliateSolutions. The great thing is that they are also “socialist”. (Oh, just to make this clear in case there is confusion, you can probably only find a handful more libertarian-minded people in the world than myself.)
Socialist meaning, they work together with the major sites, but protect affiliates and sub-affiliates (like myself), by guaranteeing the best deals and big rake races.
I wouldn´t be able to run and advertise my own site Rakeback.IncreaseYourPokerIQ.com with integrity to professionals, if I couldn´t promise my readers and players that they will get the best deal available through me. This is also the reason why I will advise you not to get Ipoker deals through my rakeback site. Everything else, yes. But not Ipoker. Why? Because I know there are way better deals out there than what affiliates can offer officially.