Tiered Commission Structures: How the Rungs Work on iGaming Affiliate Deals

Somewhere around the twenty sixth of the month a partner tends to send a two line email asking how many first depositors they are on. Their deal pays twenty five percent of net revenue up to ten players and thirty percent from the eleventh, they think they are sitting on eight or nine, and they want to know whether a push over the last weekend is worth what it would cost them in traffic. If nobody can tell them by Monday they will go and work it out from their own tracker, and their tracker will very likely say ten.

That email is a tiered commission structure doing what it was built to do. The partner gets a better rate once they pass set thresholds inside a period, nearly always the calendar month, and it is how most casino and sportsbook programmes reward growth without handing every partner the top rate on the first day. Over here at MAP, tiers are the part of a commission plan operators most want to talk through before they build one. The idea itself takes a sentence to explain. The trouble all sits in the decisions behind it, which rung a month's revenue actually gets paid at, what happens when a player drops back off the count after the statement has gone, whether the count starts again from nought on the first, and whether two brands share one ladder or get one each. A year of running a ladder brings most of them up, more or less in that order.

Say you start the year with three rungs on rev share. Twenty five percent for a partner bringing up to ten first depositors in the month, thirty from eleven to thirty, thirty five from thirty one upwards. The numbers are invented, mind you, though plenty of real rate cards look a lot like that one. The first thing a careful partner asks about it is what the rungs are counted in, and the card has gone and picked first depositors without saying so, which is one choice out of three.

First depositors are easy to count and partners like them, on account of a partner being able to count their own from their tracker and land somewhere near your figure. A player who put in ten pounds once and never came back counts the same as one still playing in the spring, though. Qualified players take most of that junk out, the ones who cleared the baseline deposit and the wagering, at the cost of a count that can still move after the month is closed, on account of qualification running on a clock of its own. Our piece on CPA qualification criteria goes through that clock. The third option counts money instead of heads and sets the rungs on the partner's net gaming revenue for the month. It pays for value, and it swings about with whatever a handful of players did. The rung on a revenue ladder gets decided by the very same deductions that decide the commission, so how NGR is calculated wants settling before the ladder goes out.

Most of the rev share ladders we see run on first depositors, and most tiered CPA runs on qualified players. Either is fine. The trouble starts when the rate card just says players and leaves everybody to decide for their own selves which of the three it meant.

One more thing on the words. Tiered also gets used for sub-affiliate deals, where a master affiliate earns an override on the partners they bring in. That is a different arrangement with its own piece, and everything below is about the rate one partner climbs on their own numbers.

By March somebody on your side usually notices a funny shape in the monthly counts. Lots of partners finish on four or five. Quite a few finish on eleven or twelve. Hardly anybody finishes on nine or ten, which looks odd until you look at how the card pays out.

Most casino deals we come across pay the rung a partner reaches on the whole of the month's revenue. Put it in pounds. A partner on ten players with eighteen thousand of net revenue gets twenty five percent of it, four thousand five hundred. One more player, who might only add fifty pounds of revenue that month, moves all eighteen thousand and fifty onto thirty percent, and the commission goes up to five thousand four hundred and fifteen. That one player was worth nine hundred and fifteen pounds to the partner, and any partner who has done the sum will spend the last week of the month going after that player. Some of the ways of going after one are perfectly fine. Others are a bonus-heavy push at an audience that deposits once and disappears, or a couple of accounts that are not quite as new as they look, which is why our piece on affiliate fraud detection has you looking harder at the end of the month.

Tiered CPA has the same step in it, only steeper. A hundred pounds a player for the first ten qualified and a hundred and thirty from the eleventh, paid on the whole month, makes ten players worth a thousand pounds and eleven worth fourteen hundred and thirty.

The other way of writing it pays each band at its own rate, the same as income tax. On a revenue ladder the first ten thousand is paid at twenty five, the next fifteen thousand at thirty, and only what sits above twenty five thousand gets thirty five. Revenue splits into bands cleanly, so that version is simple enough to run. On the CPA card it makes the eleventh player worth a hundred and thirty, which is what the card says, and eleven players come to eleven hundred and thirty. Partners earn a bit less at every step this way, which is one reason it is less common. The step does go away, though, and the last week of the month goes back to being an ordinary week.

A partner finishes April on eleven qualified players and is paid on the higher rung. Two weeks into May one of the eleven turns out to be a chargeback, the bank having pulled the deposit back off the card, so April was really ten. Your terms will almost certainly let you claw back the CPA on that player. Whether they let you go back and re-rate the other ten at the lower rung is another question entirely, and most of the terms we read do not answer it.

The strict answer is to re-rate the whole month and take the difference off May's statement. It is the accurate one, and partners dislike it a great deal, since four hundred and thirty pounds can disappear off a cheque over a player they had no means of spotting. Plenty of operators would rather claw back the one CPA and leave the rung alone, on the view that it was reached in good faith. Then there are the programmes that never wrote anything down and decide case by case, which tends to mean deciding one way for one partner and the other way for the next. That usually comes out the first time two of those partners get talking at a conference.

Sportsbook partners had a big summer this year. The World Cup ran from the second week of June to the third week of July, a lot of new accounts got opened on the back of it, and partners who normally sit on the bottom rung spent two months on the top one. Then August came, the World Cup was over, the big European leagues were still a few weeks off, and the same partners dropped straight back to the first rung. Nobody had done anything wrong, mind you. A ladder that goes back to nought on the first of every month simply pays whatever that month did.

For most partners that is the right thing to do, and a monthly reset is what most tiered commission structures use. It keeps the rate tied to what a partner is doing now rather than what they did last year. It is harder on two kinds of partner. Seasonal ones are the first, the sportsbook partners above, whose year has a shape to it that has nothing to do with how hard they are working. New partners are the other, who start at the bottom while they are still building the pages and the traffic that would lift them off it, and who judge the whole programme on their first two or three statements. Reading the rung off a rolling three months rather than one smooths the summer out for the first group. For the second, a fair number of operators put new partners on the middle rung for their first quarter whatever their numbers, so the early statements are decent ones.

The names for these things are not used consistently, truth be told. Some programmes would call a rate that builds over the partner's whole time with you progressive, and some use progressive for something much closer to an ordinary monthly tier, so two contracts that both say progressive can be describing two quite different deals.

In September, say, you launch a second brand. It might be a sportsbook next to the casino, or the same casino in a new market. Most of your partners promote both, and the first one to send you six casino players and seven sports players will want to know whether that is thirteen on one ladder, which is the second rung, or six and seven on two ladders, which is the bottom rung twice.

Either answer can be defended. One ladder across the group rewards a partner for the whole of the relationship and keeps the paperwork short. With separate ladders each product gets priced on what its players are worth, and a sports bettor and a slots player very rarely bring in the same revenue in a month. A lot of groups go and settle on separate ladders by brand, with a group-wide top rung negotiated for the handful of partners big enough to ask for one. The muddle comes from not deciding at all, since then the partner promoting both brands does the adding up their own self, and does it whichever way suits them.

Revenue ladders have a trouble of their own, and it usually arrives as a single player. A partner who brings in eight or nine thousand of revenue most months refers somebody who deposits heavily and loses thirty thousand in November. The partner's month comes to thirty eight thousand, well over the top rung, and the whole of it gets paid at thirty five percent instead of twenty five, a difference of three thousand eight hundred pounds. In December the same player wins most of it back and the partner's revenue goes negative. What happens then depends on your negative carryover terms. With carryover the December loss gets netted off January before anybody is paid. Without it December pays nothing, January starts clean, and you have paid the top rate on a month that one player gave you and then took away again.

That is a good part of why so many operators count the rungs in first depositors even on rev share deals. A count of heads is harder to push up with one player than a count of money. A few revenue ladders limit how much of the month any one player can count towards the rung, which deals with it more directly, at the price of one more clause that partners need explaining.

Here is a single partner month run through the structures above. Thirty four first depositors, forty thousand pounds of net revenue, the invented January rungs of twenty five, thirty and thirty five percent, and the revenue version of the ladder stepping up at ten thousand and twenty five thousand.

Across the first four rows the players are the same players and the cheque still moves by two thousand pounds, from twelve thousand flat to fourteen on the whole-month rungs. The last row is the step from March again. Four fewer players and a thousand less revenue take about a sixth off the commission, and that is the row partners tend to work out for themselves around the twenty sixth.

The right place for a rung in a tiered commission structure comes out of your own numbers more than out of anybody's rate card. A year of partner months is the place to start, every partner in every month, with a count of how many first depositors each one brought. In a lot of programmes most partner months come in under five, a smaller group lands in the teens and twenties, and a handful sit well clear of everyone. A first rung at ten then sits above the great majority of your partners. Whether that is right depends on what the rung is for. If it is meant to pull the middling partners up, it wants to sit a little above where they usually land, close enough that chasing it makes sense. A top rung nobody has reached in a year mostly makes the rate card look generous, and the good partners can usually tell.

Spacing matters just as much. Put the rungs close together and every month has a step in it somewhere. Spread them too far apart and a partner can grow by half and be paid exactly the same, which is not much of a reason to grow. The top rate has to make sense against what those players are worth to you over their whole life as customers, and our piece on FTD value vs LTV gets into that properly. Whether a partner belongs on a rev share ladder at all, rather than CPA or a hybrid, is a separate decision and the subject of our CPA, revenue share and hybrid guide.

A commission plan on MAP can be tiered, flat or progressive rev share, tiered, progressive or standard CPA, CPL, or a hybrid of those, and any partner can sit on a bespoke plan set around their own performance and placements. That last bit is how a new partner gets the middle rung for a quarter, or the big partner gets the rate they negotiated, without somebody keeping a side spreadsheet of exceptions that only one person in the office understands. Negative carryover can be offered or left off. The first deposits and the revenue the rungs are read from arrive from your platform server to server, so the rung a partner lands on comes out of the same figures as the commission does.

Partners can see where they stand during the month in their own reporting, on the web or in the iOS and Android apps if you have asked for those, so the email on the twenty sixth mostly stops coming. Payment thresholds and payment methods are yours to set, and the self-invoicing system turns each month's commission into an invoice without anybody typing one up. Reporting by partner and by month also gives you the counts to see how many partners finished a player or two short of a rung, which is a number worth adding to the KPIs your affiliate manager tracks. How all of that fits together for a casino programme is in our overview of casino affiliate software.

Software can tell you how many partners finished one player short of a rung. It cannot tell you whether moving the rung down by two would get more out of them or simply cost you more for the same players, and that is most of the commercial question. The month-end step does not go away by its self either, not on a deal that pays the whole month at the rung reached. Fraud scoring will pick out the conversions that look wrong, and some of the ones that look fine will still be partners pulling players forward from the first week of the next month, which no score is going to catch.

The platform pays whatever the plan says. Somebody on your side still has to decide what the plan says about the chargeback in May, the second brand in September and the reset on the first of the month, and tell partners before the first dispute rather than halfway through it.

And the biggest partners will not stay on anybody's ladder for long. Past a certain size they negotiate a fixed rate or a hybrid of their own, which goes on a bespoke plan, and from then on the ladder matters mostly to the middle of your programme. It does its best work there anyway, on account of the middle of a programme being full of partners who still have room to grow into the next rung.

The quickest check needs only last month's statement and a pen. Next to each partner goes the number of players they finished short of the next rung, and then it is a matter of reading down the column. A lot of ones and twos mean the rungs sit somewhere sensible and the step is probably costing you something in the last week. If almost nobody is within ten of the next rung, the ladder is not doing much for most of the programme. A cluster finishing one or two over a rung is worth a closer look of its own, particularly the players in it who arrived in the last three days of the month.

If that took an afternoon in a spreadsheet, a demo run on your own plan structure will show you how the same partners and the same rungs would look on MAP. Programmes already running tiers somewhere else can bring each partner's position on the ladder across with them, which our platform migration guide walks through, and everything else MAP does is listed on our features page. Something over three hundred brands in Europe, North America and APAC run their affiliate programmes on it.

What is a tiered commission structure in affiliate marketing

A tiered commission plan raises a partner's rate once they pass set thresholds in a period, counted in first depositors, qualified players or net revenue, nearly always over a calendar month. A casino ladder might pay twenty five percent of revenue to a partner with up to ten first depositors and thirty five to one with more than thirty, so partners earn more for growing without being handed the top rate from the start.

Does the higher rate apply to the whole month or only above the threshold

That depends on the contract, and the contract ought to say. Most casino deals pay the rung reached on all of that month's revenue, which is generous at the top and puts a jump at each threshold that partners will chase in the last week. Paying each band at its own rate costs a little less and takes the jump out.

How often do commission tiers reset

Monthly is the usual answer, with everybody starting back at the bottom on the first. Some programmes read the rung off a rolling three months so seasonal partners, the sportsbook ones in particular, are not knocked down every quiet month. Others protect new partners on a middle rung for their first quarter.

Should rev share tiers be based on FTDs or on NGR

First depositors are harder to inflate with one big player and easier for partners to check against their own tracker, which is why a lot of rev share ladders use them. Revenue rungs pay for value rather than headcount. One heavy loser in a month can lift a partner to the top rung on their own, though, and then win it all back the month after.

Can one partner be on tiers for one brand and a flat rate for another

On MAP, yes. Plans can be built per brand and per geo, or for a single affiliate, so a partner can sit on a ladder for the casino and a flat rate on the sportsbook at the same time. A fair number of operators run exactly that for partners who are strong on one product and only dabbling in the other.