What is an affiliate commission tier?
An affiliate commission tier is a structured payout model used by iGaming brands to reward affiliates based on the volume or quality of the traffic they deliver. Under this system, affiliates earn varying commission rates according to their performance metrics, such as the number of new depositing players, total deposits made, or generated revenue.
How does an affiliate commission tier work?
Affiliate commission tiers typically involve incremental thresholds. As affiliates reach higher performance levels, their commission percentage increases. Common models include:
- Number of first-time deposits (FTDs)
- Monthly net revenue generated by referred players
- Total player deposits or turnover
For example, an affiliate might earn 25% revenue share for up to 10 new players per month, 30% for 11-20 new players, and 35% for more than 20 new players.
For what purpose are affiliate commission tiers used?
Affiliate commission tiers motivate affiliates to continuously increase the quality and quantity of traffic. They incentivize affiliates to reach higher performance levels, driving more valuable players to iGaming brands. This structure also helps operators manage affiliate marketing costs by directly linking expenses to affiliate performance.
Examples of affiliate commission tiers:
- Tier 1: 0-10 new players/month — 25% revenue share
- Tier 2: 11-30 new players/month — 30% revenue share
- Tier 3: 31+ new players/month — 35% revenue share
Alternatively, revenue-based tiers:
- Tier 1: $0-$10,000 monthly net revenue — 25%
- Tier 2: $10,001-$25,000 monthly net revenue — 30%
- Tier 3: $25,001+ monthly net revenue — 40%
Advantages of affiliate commission tiers.
- Incentivizes affiliate growth and improved performance
- Ensures marketing budgets are aligned with real performance
- Attracts high-quality affiliates by offering scalable rewards
- Encourages long-term affiliate partnerships
Advice for using affiliate commission tiers.
Advice for iGaming brands:
- Regularly review and adjust tiers to reflect market changes and competitor strategies.
- Provide transparent reporting tools so affiliates clearly understand their performance.
- Offer additional incentives, such as bonuses for achieving top-tier status or exceptional performance.
- Clearly communicate terms to avoid misunderstandings and ensure smooth affiliate operations.
Advice for affiliates:
- Understand the specific requirements of each tier to strategically focus efforts.
- Monitor performance metrics regularly to optimize campaigns and maximize earnings.
- Collaborate with affiliate managers for insights and guidance to reach higher commission levels.