Are You Paying Costs From Your Revshare?

13 Comments June 7, 2008 / Posted in Bingo

A number of affiliates are on revshare programs – this is where once costs are sorted out the profit (revenue) left over is then divided up between the merchant and affiliate in a reasonable share. Now I work with a number of revshare programs and whilst the commission calculation varies on things like revshare of deposit to revshare on profit all follow the same path.

Unless you happen to be Crown Bingo.

Now I’m not a fan of naming merchants, but in this case it’s time for an exception (blame my Hillaryedness).

Crown Bingo do the usual stuff, like everyone else in that Revshare is calculated from the Gaming Profit.

If you choose to be rewarded through Revenue Share commission type then you will receive a percentage of the monthly ‘Net Gaming Profit’ for each player you refer. Your percentage is displayed in the programme details section and the monthly ‘Net Gaming Profit’ is calculated as the net profit remaining less any bonus or promotional amounts, charge backs, processing fees, license fees, operation fees and jackpot contributions.

However, on their invoices Crown take off “costs” from the affiliate revshare portion.

We stopped promoting Crown in April as it didn’t really work for us, despite our best efforts and support from the affiliate manager. However we did send 9 new sign ups in the first few days of April and from that, and other limited player activity, we managed to incur £45 of “costs”!

So what are these “costs”?

Is it the free bingo? It shouldn’t be as that should be shared between merchant and affiliate before revshare!
Is it software costs? As above!
Is it bonuses and promotions? Well, as above as well!
Anything else cost wise? Guess what, yes as above!

In fact there should be no “costs” at all incurred solely by the affiliate!

So why the blog?

Well firstly I’m hoping it facilitates an explanation from Crown – it was April when i first asked about this!

Secondly hopefully other affiliates will now check their invoices, and not just with Crown, and see if they’re paying the same “costs” after revshare!

Crown clearly define their terms:

Revshare: a Commission payment contingent on a Visitor reaching Crown Bingo through a Valid Click, depositing and staking the specified amount and then calculated as a percentage of their gaming profit.

Gaming Profit: means the amount earned by Crown Bingo after all costs are removed. Including but not limited to; promotional adjustments, bank charges, software provider charges.

So, unless someone can tell me differently, based on the definitions above, I can see no rational explanation as to why an affiliate is having to pay “costs” from their revshare – because according to the definitions all costs should already have been removed!

It may well be that there’s a simple explanation to all this – and I welcome hearing it – but it would be nice to get a definitive answer!

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  1. Scott said on June 8th, 2008 at 6:22 am

    We’ve been promoting the in house Crown Bingo program since it began and almost everything about it is very good – the communication, the tracking, etc – but as you have pointed out, they are taking massive costs from our revshare amount… It actually ends up being between 20% and 35% of our actual commission amount that they take out. The worst part I found was that it is never a uniform percentage – so how do they calculate it?

    In addition, showing the definitions as you did proves that they should have already taken costs out.

    Based on this I have no idea how they could explain it, but I am looking forward to seeing it.

  2. Vikki said on June 10th, 2008 at 2:09 pm

    Hi Jason,

    First of all I’m going to highlight the most positive part of your email with regards to our system “despite our best efforts and support from the affiliate manager”. I did hope that I gave you good support on any queries that you had and I am quite disappointed that you did not feel that you could email me before posting this.

    As you run your own affiliate program for your white lable sites I would hope you would appreciate that rewriting an invoicing system is not the easiest thing to do. Especially as ours does everything to make it as simple for our affiliates, including generating self billing invoices so we can make payments straight away.

    As far as I can tell after numerous update emails the last I spoke to you about this was the end of May with the following email:

    “Hi Jason,

    I think you might have read my message differently to what I meant it as.

    I was agreeing with you on the rev share and I am meeting again with my MD to go over this and hopefully get it changed.

    I was implying that I don’t know why our site doesn’t convert your visitors because this totally baffles me. I know you have good traffic and I wish for the life of me I could figure out why your players don’t want to play here and I totally understand why you choose not to promote us.

    I was only kidding about being nice to me :o ) I know you will be!

    I will get back to you as soon as I have a resolution to your invoice query.

    Thanks,

    Vikki”

    To give everyone a bit of background our system was launched as soon as we could in Beta mode so that we could get away from the retail based Buy.at system on to a system that was built by us especially for bingo. Amongst other things, our system allows affiliates to drill down to their individual player profit, reports clearly on sign ups and depositing players, and is updated on a daily basis.

    When developing this we researched into how rev share was calculated by other operators and decided to go with something that was more transparent than others who simply take a generic percentage off the gross profit when calculating rev share.

    So Scott, you’re right it is never a uniform percentage for costs, it is all based on your individual players. This means that the affiliates who send through freebie hunters will be charged more than other affiliates who send through players looking to deposit and play on the site.

    As we do not have different bonus pots for free money, we made a decision that the cost should be taken off after the rev share is made, as the profit will already include most of the free money and we would essentially be paying out free money twice. For example, if they lose £10 on slots, an affiliate will see £10 in the gaming profit column. If they do the same on other bingo affiliate programs, they will see £10*25% costs.

    This is different to how other bingo sites do it but we operate our own network using Virtue Fusion software and, unlike other operators, we do show everything to affiliates. We do not skim anything off the gross profit before passing it on to affiliates.

    As mentioned in the email above, we are going to change how we calculate the rev share next month, and we have been working on this from April to get the best possible resolution for affiliates based on how our software operates.

    I would urge all my affiliates to contact me if they have any more question on this, but you can rest assured that I will be looking over invoices from the last 3 and a half months and adding any additional rev share payments to your accounts as a bonus (yes guys, 3 months… it’s not like we’ve been doing this for years). I am the only one who works on our affiliate program so I really appreciate your patience while I work this out and I will keep you all updated on the changes.

    I would appreciate if you have any further questions about our invoicing if you could email me.

    Thanks,

    Vikki

    Affiliate Manager
    Crown Bingo

  3. Jason said on June 10th, 2008 at 5:03 pm

    Hi Vikki

    Thanks for the reply, but it doesn’t really explain the concern

    The fact is that by the definitions stated you shouldn’t be removing anything from revshare – in fact all costs should be met by merchant & affiliate before revshare is calculated? By removing “costs” at the revshare stage you’re essentially charging the affiliate to use your program imo.

    Now it may well be that the definitions are just totally wrong – but if this is “improved transparency” then I’m baffled by it.

    I make no apology for making this public though. Too few affiliates will voice concerns – and that is something that needs to be addressed. For such an important question as “what do these costs actually mean” the answer should have been instantaneous imo… not something that needed to be looked into.

    Jason

  4. Vikki said on June 11th, 2008 at 9:48 am

    Hi Jason,

    I don’t want to get into a big dialogue here, I didn’t say that I needed to look into the costs, the costs are exactly what it states in our FAQ’s. The thing that needed “looked into” was is when these costs are taken off the profit, and this was not a decision that I could make without speaking to other people in the company.

    As I mentioned above we are now getting the invoicing system changed, but this is something that I would prefer was done properly, not quickly. Currently I am waiting for the system to be changed, but this cannot happen until after last months payments are completed, which should be today. I will then look at all of the affiliate invoices from launch in Feburary and add any discrpancies as bonus payments next month.

    If there is anything else that I can do then please let me know.

    Vikki

  5. Jason said on June 11th, 2008 at 10:39 am

    Vikki

    Please could you tell me where in the FAQ it explains costs

    http://affiliates.crownbingo.com/faqs/

    “don’t forget all of the costs mentioned above will be taken off before the final payment is made at the end of the month”

    Yet above that there is nothing “mentioned above”

    You can’t complain that an affiliate is making this “public” when (1) the information on your site is wrong (2) the information on your site is missing (3) the affiliate is concerned re how payments are being calculated and (4) is concerned that this calculation was in place on the even less transparent Buy.at program.

    Jason

  6. Vikki said on June 11th, 2008 at 11:05 am

    Cost explanation from the FAQ – How is the Rev Share Calculated?

    “bonus or promotional amounts, charge backs, processing fees, license fees, operation fees and jackpot contributions”

    I have agreed with you and explained above what actions we will be taking to rectify this. I cannot see what more there is to discuss. I am emailing all affiliates today explaining what will be happening and if there are any questions please email me and I will explain further.

    I will of course forward this to you as you requested to be taken off our mailing list about 3 weeks ago.

    Thanks,

    Vikki

  7. Jason said on June 11th, 2008 at 11:31 am

    But Vikki……

    Revenue Share “you will receive a percentage of the monthly ‘Net Gaming Profit’ for each player you refer”.

    But you define…

    Gaming Profit: means the amount earned by Crown Bingo after all costs are removed. Including but not limited to; promotional adjustments, bank charges, software provider charges.

    Revshare is then calculated from Gaming Profit… so why are costs then removed from Revshare?

    Jason

  8. Vikki said on June 11th, 2008 at 11:45 am

    Hi Jason,

    I’m trying to be as clear as possible. As I said above we know the calculations have been done incorrectly and I am working on getting this fixed. Which is hopefully putting me in this category:

    3. They can take the comments onboard and react positively to improve things.

    I don’t know what else to say? Rewriting an invoicing system is not something that can be done over night but I am pushing to get it done, however I’m afraid for every comment on here I have to respond to takes time off getting it done… so I’m afraid that I won’t be able to repond from now on as I need to get on with getting it fixed.

    Thanks and again appologies for not keeping you as updated as I should have,

    Vikki

  9. Jason said on June 11th, 2008 at 12:18 pm

    Thank you for taking the time to respond and comment – it is appreciated.

    I look forward to seeing whether the changes effect commissions and would be happy to blog on the outcome accordingly.

  10. Vikki said on June 11th, 2008 at 12:26 pm

    Awesome,

    Thanks Jason. I’ll keep you all updated.

    (see I knew I couldn’t resist commenting again!)

  11. Dio said on June 11th, 2008 at 12:35 pm

    Good to see some action being taken on this one, as to be honest it’s had me scratching my head but to lazy to follow it up. :)

  12. Vikki said on July 3rd, 2008 at 11:20 am

    Hi Jason,

    Just to let you know that all the bonuses were added to the accounts this month and sent out yesterday. The payments should reach everyone within the next week.

    If anyone has any questions about this then I would ask them to email vikki@crownbingo.com and I’ll do my best to sort it out.

    So glad this is all sorted, please let me know if you want anymore info.

    Cheers,

    Vikki

  13. [...] Sadly affiliate marketing life isn’t like that – and there are times when an affiliate reaches an end point and feels an issue is so important that it needs a right good airing in the public domain. John for example is mightily miffed with a network and has awarded them another Muppet of the Week title, and I’ve recently commented on an issue regarding revshare calculations! [...]