Why RevShare Percentages Cannot Be Valued Separately
The phrase “RevShare 60%” seems clear, until the main question arises: 60% of what exactly? In the partner model, interest is applied not to deposits and not to turnover per se, but to the base, which is determined by the rules of the program. NGR (Net Gaming Revenue) is often used as such. Therefore, two programs with the same percentage can give a different result if the NGR formula differs.
The partner’s task before the start is not to guess the future income, but to assemble the formula so that later it is possible to compare the calculation by numbers.
Simplified logic of NGR
In educational form, the mechanics can be represented as follows:
NGR = gross game result - agreed deductions.
Deductions depend on the terms of a particular program. These can be bonus costs, payment system commissions, taxes, refunds or other items. You can not automatically transfer the formula of one partner to another.
| Indicator | Conditional value | Comments |
|---|---|---|
| Gross result | $18 000 | Initial value of an example |
| Agreed deductions | $5 000 | The composition depends on the conditions |
| NGR | $13 000 | Base for RevShare |
| Bet. | 60% | Contingent rate |
| Partner income | $7 800 | $13 000 × 60% |
Five questions that are more important than a beautiful rate
- What's in the NGR formula?
- Is the Negative Balance Transferred to the Next Period?
- When does the billing period close?
- Can the rate change rateween levels?
- How to check a disputed settlement for a SubID or a specific segment?
If these questions are answered, the percentage becomes a working indicator. If not, it remains an advertising figure with no context.
How to compare two RevShare models
Suppose that program A offers 65% and program B offers 55%. Intuitively, A seems more profitable. But if Base A after deductions is $8,000 and Base B is $10,500, the results will be $5,200 and $5,775, respectively. That is, a lower percentage does not necessarily mean a lower payment.
Compare not the rate, but the campaign setup NGR formula → rate → transfer rules → the actual result on your traffic.
How to Consider Your Own Economy
Revenue on RevShare is only one side. For paid traffic, you need to deduct advertising costs. For SEO, you can consider the cost of content, links, development, and support. The result is an indicator that really helps to make a decision: the profit of a particular source for the period.
- income of the reporting partner;
- costs of attraction;
- Costs of producing content or creatives;
- additional operating expenses;
- net result.
What to Do Before Scaling
Don’t make a decision on one good week. Take a look at a few periods and break down the statistics on GEOs, sites, and campaigns. If all traffic is mixed in a single label, a strong segment can mask a weak one.
For quick scenarios, use it. RevShare calculator and the model conditions and the list of questions before launch are collected on the page RevShare.
How to check the formula on a real report
Take one already closed period and restore the calculation manually. Start not with the final payout, but with the baseline: what lines were included, what deductions were applied and what rate was used. If the manual results match the report, you have a clear control model. If not, you can ask the manager a specific question on the line, rather than arguing about the total amount.
It is useful to store three levels of data next to each other: an indicator from the partner office, your own count and a comment on discrepancies. Such a journal is especially useful after changing the rate or moving to a new level.
Errors in RevShare Evaluation
The first mistake is to consider the user’s deposit as the partner’s income. The second is to compare the months with different ages of the cohorts. The third is to draw a conclusion about the quality of the source by one large user. The fourth is to forget that when you scale, you change the composition of your audience.
If one campaign generated high NGR at the expense of several atypical users, don’t put that result in the baseline prediction. It is better to use a median or conservative scenario for the budget.
Three scenarios instead of one prediction
Collect a “conservative/baseline/strong” table. Change not the rate if it is fixed, but the NGR by one cohort and the cost of attraction. So you can see how sensitive the model is to traffic quality and whether there is a margin to a negative result.
Mini template for reconciliation of the month
Collect one line for each source: FTD, NGR, applied rate, carryover, final RevShare and your own expenses. If the program shows multiple currencies, select the conversion rule for the internal report in advance and do not change it from month to month.
After the period closes, ask yourself three questions. Did the actual base match what was expected? Has the composition of the traffic changed? What source gave the best result not in absolute money, but in unit costs? The answers help separate economies of scale from those of quality.
When to Revise the Model
If RevShare for several periods in a row does not cover the cost of attraction, you do not need to immediately abandon the model. First, check to see if the result spoils a particular GEO or source. If the weak economy repeats itself across all major segments, it’s worth comparing RevShare to CPA or Hybrid on the same data.
LuckyBear’s NGR calculation scheme
The supplied program description defines three steps:
- Gaming result = deposits − withdrawals − change in users’ balances.
- NGR = gaming result − platform operating expenses.
- Affiliate remuneration = NGR × RevShare rate / 100.
Check operating-expense components and adjustments against the current agreement and your account report. The affiliate’s own traffic costs are separate. See the RevShare calculation scheme and the 55–75% tier rates.
