Forex Affiliates Commission Types: Definitions, Differences, Pros & Cons
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Forex Affiliates Commission Types

How To Make The Right Choice for the Forex Affiliates

While forex affiliates commission types come in various formats, the decision on what type to use will rely mainly on your own particular requirements and traffic types. It will also rely to an extent on your financial situation and the payout periods of the broker you work with. If you need to collect affiliate commissions as soon as possible, then you’ll be better off with an affiliate commission type that pays the maximum commission in the least amount of time.

If you can afford to wait longer for your commissions, then choosing the scheme with the highest potential would be a wise decision. The good thing is that you’ll have plenty of options to choose from. So no matter what your needs are, there is a forex affiliate commission type ideally suited to you.

Let’s take a look at the most popular compensation schemes on offer for forex affiliates before we look at what the best affiliate commission type will be for you.

CPA – Cost Per Action

Cost Per Action is the most widely used affiliate commission type and is essentially a commission payment applicable after your referred forex leads have taken a particular action. That might be for filling in a registration form, signing up for an email newsletter. Or, in the case of forex brokers, registering for an account and, in most cases, making a deposit.

The more complicated or involved that action is, the higher the CPA amount will be. At Forex-Ads, CPAs can run to several hundred dollars, depending of course on the Geos the referrals come from in the first place. The CPA will typically be triggered on the referral making an FTD (First Time Deposit) into their account.

A CPA commission scheme is an attractive option, given the high payouts and the lack of any further action necessary by the referred trader. Once they have made their first time deposit, you’re eligible for the CPA commission.

A CPA commission scheme also puts you higher on the customer acquisition value chain. With CPA, your referrals are typically one step away from taking the necessary action (registering for an account and making an FTD). So the affiliate commission will be higher than any other compensation scheme on offer. Your referrals are also closer to taking the final action, so your conversions should be higher. After all, your referrals only have one of two things to do. Complete the action or click out of the page.

For most forex affiliates, the commission scheme of choice will usually be CPA. The combination of higher payouts and more straightforward conversion process makes it the first choice for most marketers. If you’re running paid ads to a forex offer or relying on media buying CPA is usually the best way to go.

Revenue Share

Revenue share is another popular commission scheme for forex affiliates. Under a revenue share commission scheme, you get paid a certain percentage of all the trading fees you referrals generate for the particular forex broker.

Say your rev share is for a 35% fee, and your referrals generate $1,000 in trade fees for a broker in a particular month, then your commission for these referrals under the revenue share commission scheme would be $350 for that month. Keep in mind this is for the lifetime cycle of the referrals, not just a one-time payment. As long as your referrals keep trading with the broker and they keep generating trader fees, you’ll continue to collect the forex affiliate commission.

Revenue share works best for affiliates who have built some kind of engagement with their referrals. If you run a blog or review site and have some sort of contact with your referrals (email newsletter, for example), then revenue share is usually the most attractive option.

Choosing a revenue share commission scheme also depends on the geos your referrals come from. The latest ESMA regulation updates limited the maximum leverage regulated brokers could offer retail traders, which has had an effect on the generated trader fees. If your referrals come from the more affluent TIER-1 regions, then revenue share might be the more attractive option for you.

Hybrid Scheme

A hybrid commission scheme is a form of a combination of affiliate payouts. Under a hybrid plan, you’ll get a CPA component plus a revenue share component for all your referrals. Hybrid commission schemes will have a lower CPA component than a standard CPA and a smaller revenue share than a standard revenue share.

Say, for example, the broker you work with offers a CPA of $600 and a Revenue Share of 35%. The Hybrid offers might look like this:

CPA of $400 plus Revenue Share of 15%

You’ll get a lower CPA and a lower revenue share, BUT you’ll have both components. Instant commission as soon as your referrals make their FTD plus lifetime cycle for all their generated trader fees.

Hybrid affiliate schemes have gained in popularity over the years. Anecdotal evidence points to the parallel rise of social media as one of the main reasons for this popularity increase. Having a strong presence on social media is usually a sign of building engagement. And the more engagement you can create with your referrals, the more involved you can be in their trading.

Social media alone, though, can’t account for the rise in popularity of hybrid affiliate plans. More disposable income is another possibility, as is the tremendous increase in mobile trading. More people with more opportunities to trade usually means the lifetime value is increasing. This increased lifetime value usually means higher generated trader fees and higher affiliate commissions.

How to choose a forex affiliate commission scheme?

The starting point for this will be your traffic types. As mentioned, deciding on a compensation scheme for your forex referrals will depend mainly on what kind of traffic you use to generate your signups.

If your traffic is mainly from media buying, then CPA would be the best solution for you. The reason is simple. Besides the click to your landing page, media buying won’t get you any details about this traffic. In a standard media buying campaign, the result is a click. You’re not collecting email addresses or any other personally-identifying information. You get a click, and that’s pretty much that.

Yes, there are ways around this. You could use paid traffic to build an email list, for example, and then market forex offers to your subscribers. Using this approach, you create a list of people interested in your forex content you can email broker offers to. Building an email list is something you should be doing anyway, but keep in mind this is a longer-term strategy.

If your traffic comes from sources where you can build engagement, you might want to look at a rev share or a hybrid model. Revenue share and hybrid schemes rely on your referrals’ trading with their broker and generating trader fees. No fees = no revenue share, so engaged traffic you can connect with is vital here.

The geos your traffic comes from also plays an essential part in your choice of affiliate scheme. Higher trading fees call for higher deposits. Tier-1 countries tend to have higher initial deposits and a greater volume of trader fees. German traffic tends to generate higher trader fees than Italy. For example, so if you’re targeting German traffic, a revenue share or hybrid scheme might be the best plan.

Testing is the name of the game. Test an offer on a CPA and the same offer on rev share. Whichever one makes the best return, that’s the best affiliate plan for you.

Talk to your Forex-Ads affiliate manager and see what is working the best for your particular geos. We’ve got all the stats for you, and the more you make, the more we earn. Your affiliate manager is there to help, so reach out, and we’ll get you started on the best possible compensation plan!

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