Affiliate marketing is a complex business, made of several elements: exploring the offers, researching the audience, planning the funnels, designing creatives, picking an ad network, and more. Each element is an art on its own and deserves a designated article; furthermore, there are sub-elements within each group too.
Today, we’ll focus on affiliate marketing payout models, specifically on Revenue Share, a.k.a. RevShare. This article will compare this model against the others, elaborate on when it is best used, and provide a list of tips & hints on how to start.
RevShare Explained
Revenue Share is a payout model, offering a percentage of product owner’s income to an affiliate. When it comes to affiliate marketing, the value is 20–50% on average, but RevShare can go as high as 80%, 85%, or even 90% (outdated).
Besides RevShare, there are CPA, CPL, CPI, and CPS — payout models with a fixed commission size, e.g., $1.60, €17.50, or $600. Whichever model you pick, remember that payouts are only a part of the equation, and you need to keep in mind the Conversion Rate (CR) of the offer. Generally, the higher payout is, the lower CR will be; so the most converting offers tend to have humbler payouts.
Dynamic and fixed payouts can be merged into a hybrid model, e.g., $40 + 30%. Usually, these two parts, when compared individually against RevShare and CPA, offer smaller payouts. They are best suited for those, willing to get money right away and at the same time have an opportunity to profit in the long run.
Advantages of RevShare
RevShare generates more money in the long run. This is especially the case for iGaming, subscriptions, and other verticals, with the focus on maximizing customer lifetime value (CLV). For the user to keep on paying, you need to engage them for real and persuade them that they are worse off without your product.
RevShare is a great source of passive income. Having invested your money and efforts into acquiring a user, you can enjoy constant money influx. Meanwhile, you can focus on other campaigns or even don’t work at all (which we don’t recommend doing 😅).
RevShare provides financial stability. When done correctly, it will gradually top your account up with extra funds. While you’re working on short-term CPA campaigns, RevShare contributes to your overall income, proving that slow and steady wins the race.
How to Approach RevShare
Explore the product in-depth. Let’s put it bluntly, a CPA model might tolerate some degree of overestimation and hard-selling, since you’re paid once the conversion fires. What happens next is none of the affiliate’s business. In this regard, RevShare is unforgiving — you need to make sure the user falls in love with the product promoted. If the product is below average, RevShare will deplete your campaign budget faster than a high roller in a casino.
Focus on problem-solving on product features. The users couldn’t care less about a product, unless it solves their problems. This is the key to get your audience hooked and interested in paying money for your solution.
Getting experienced with CPA first is a good idea. You need to be confident that you can deliver genuine value to the user. In this regard, CPA offers serve as a proving ground, where you can hone your skills and gain more confidence.
RevShare is the essence of Whitehat promotion. Questionable marketing practices might make a cut under the CPA model, but RevShare is all about fair play — Why would a user pay over and over for being deceived?
Read terms & conditions. Sometimes you can generate more leads than needed, so all your subsequent users will go in vain. This is a problem in general, but in case of RevShare this is a catastrophe: besides the commission, all the future income is lost too — this is what they call cost of opportunity.
Split your traffic initially. You don’t have to direct all your traffic toward a single product owner or an affiliate network. In fact, the same offer might be promoted by a bunch of affiliate networks, so you can split your traffic between them and see which one performs better. Basically, it’s an A/B testing of its own 🤔
Track and optimize. Tracking is even of greater importance for RevShare, as you’ll want to know additional metrics, like average CLV, to optimize accordingly. RevShare performance is harder to predict and stabilize, and more data help to counter this issue.
Communicate with the audience whenever possible. RevShare gives you an incentive to interact with your acquired users to nudge them into spending more money. This is where social media marketing starts to shine. A tiny reminder to your push subscribers can make all the difference between making a fortune and breaking the bank.
Just leave it be. Once the campaign is launched and starts to bring in new users, try focusing your attention elsewhere. RevShare is a long-term investment, so you won’t see impressive results overnight. Instead of worrying about its profit generation, try to keep your productivity by improving other campaigns.
Mix RevShare and CPA in your portfolio. The best idea is to combine fixed and dynamic payouts in your portfolio. This way, you have CPA as a predictable and stable source of income, while RevShare serves as a long-term investment, which will bear fruit in the future.
Conclusion
Revenue Share (RevShare) stands out as a lucrative and long-term payout model in affiliate marketing. While other models offer fixed commissions, RevShare provides affiliates with a percentage of the product owner’s income, offering the potential for higher earnings over time.
Advantages of RevShare include the generation of passive income and the focus on maximizing customer lifetime value.
Approaching RevShare requires careful consideration of product quality, problem-solving, and genuine value delivery to users. It’s essential to read and understand terms and conditions, track performance metrics, and engage with the audience to optimize results. Incorporating RevShare alongside other payout models in a diversified portfolio can provide stability and long-term growth opportunities for affiliates.
