Affiliate convention in Amsterdam-discussions of rakeback

[beanie]

Both the guys from RaketheRake and RakeRebate.net did a fine job presenting the case for why Rakeback is a needed thing in the industry. The meeting certainly got heated at points and I will just give you some highlights some lowlights and what my opinion is.

1) Part of the discussion was how the industry has changed. Many of the affiliates that got traffic 5 years ago didn't need to give incentives because the industry was in a frenzy. Some of the people in todays market are quite savvy and rakeback fits for them-it keeps them loyal to the sites once they have it.

2) The Party Poker people came in late for the meeting (which seemed odd since they are against rakeback) after talking to all involved it was apparent they were there just to yell at us. Many people in the room have relationships with Party Poker so many people were quiet when the marketing manager vowed to "crush us all". I don't have a relationship with Party Poker so I was free to speak my mind. I certainly see why they feel the way they do but as I pointed out their position was hypocritical because they are trying to look back with 20/20 vision. Party Poker has certainly made many mistakes that caused rakeback to flourish and thrive.

3) There was a lot of discussion about rakeback affiliates taking things more seriously. There are too many rogue affiliates doing things damaging to the industry and I really hope I can be part of something that will be a cooperative with the only sites so rakeback can be done in a respectful manner to our partners.

Party Poker is too centered on bringing new customers to the market (which I agree is not all bad) but they are way overboard with that mission. Many rakeback affiliates are in essence "executive hosts" for their players. Certainly Party Poker sees no value in us in this manner and who can blame them. But certainly newer sites see the value in rakeback affiliates. With the industry having fewer and fewer new customers we provide that one to one personal relationship that sites need.

I totally get why Party Poker is upset and felt the need to essentially come into our meeting and reprimand us (and then promptly left-literally one of the funniest things I have ever seen) they have been the site most affected by rakeback and they have the most to lose since the have a no rakeback policy and vow to eliminate rakeback.

What they don't get is that the customer will ultimately decide what is best for themselves. High value players want to be respected and compensated. You bring in a gambler to the Wynn that generates a million dollars and you can best believe that the Bellagio will do anything to get that guy.

I think online poker needs rakeback but the way things are currently we need to be doing a few things.
1) we need to help sites police their spammers-our players are playing at these tables daily-lets help the sites maintain their database.
2) lets not advertise in the same trade publications as the sites we partner with.
3) lets leave some sugar on the table-if someone says I would like rakeback on xyz site the first question should be "do you already have an account there?"
4) In this way Party Poker was right-the guy was yelling that we do not generate new customers. Lets focus on fewer sites that we believe do a good job and try and steer people to those sites.
5) Sites need to be in or out. The rules need to be clear. We can help them no their customer base in a better way but it is difficult to do that without a clear understanding of what people want accomplished.
6) The rakeback industry needs more of a network marketing approach. Our sites need to be upgraded to the point where customers want to tell everyone they know about us. This is a more respectful approach to our partners.
7) Lastly-its a new day for rakeback. We need to take things seriously and sites need to involve us in the discussions regarding the industry.

(I apologize-my comma key is jammed so I use dashes)

[AAAA]

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3) lets leave some sugar on the table-if someone says I would like rakeback on xyz site the first question should be "do you already have an account there?"

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I am still working on the rest of it, but it is snooze time, but this one hit me really hard!

Why do the sites feel that the people who played there belong to them!? Why would the people who helped start a site be given worse treatment than people who just start now?

Perhaps the mega-affiliates would be better served if they gave rake back after a player asked for it! (at least after the player generated a reasonable amount of income)

If you market for players and then the people find out about rake back, they do Not continue to play and say well, I just don't deserve rake back. They quit playing or play less at a site and go to sites that will give them a discount. The original affiliate should be given the option of reducing the amount they collect and giving some to the player, at the very least.

In fact, there is a big case for having some threshold after which the player has paid his dues to the affiliate and should be given a frequent player bonus in the form of rakeback.

You cannot put a cat back into a bag! Once a player knows about rakeback, they want it! Economics transcends the wishful thinking of marketers.

[Hobo McCracken]

AAAA,

I completely agree. Party argues that RB doesn't bring in new customers, well, how about getting the old timers to come and start playing at your site regularly? Is that not worth just as much if not more than generating a new customer?

[beanie]

I 100% agree with you that the sites should have an answer for this type of person. But there are 2 ways that you know about rakeback (through ads) or someone contacting you. I don't believe there should be ads (present company and RRR excluded) and if the sites had an internal system we could easily pass you onto their system for some 1 time fee.

But 100% the customer is king here and it is the competition that caused rakeback not the other way around. The fact that the market created it means it is wanted. So sites need address this concern with our cooperation. If they don't-what is being created is an unhealthy answer to our industry and you will see more and more situations like Empire and Eurobet's and PokerShare coming along (I still contend that the main sites could have always had an answer and shouldn't have allowed the great disparities that were created in the marketplace-though you can't blame affiliates for taking those incentives).

[JRussell]

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I don't believe there should be ads (present company and RRR excluded)...

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Why?

[AAAA]

nothing personal against RRR, but unless they agreed to operate as a non profit site, why should they get preferential treatment about being the only place to advertise rakeback? (I doubt the owners would like to give up the probably substantial income generated)

Personally, I think that word of mouth, or referral is probably the only fair way to "advertise" because I do understand that the sites don't really want to advertise rakeback to new players. The cost of traditional advertising is very high!

The competition has been quite good at driving down the net cost of poker, but at some point, the competition leads to "loss leaders" and we all know the big guys can hold out the longest to drive out the competition if they want to!

Consider this...most sites are willing to give away 75% of the rake to large companies that market for them, and produce a lot of traffic. Now that the majority of people know about poker, there is just no reason to have rake as high as it is, except to do like WPEX is doing and take it away, then give it back! That imo is a good thing! I believe it acts as a bankroll extender for the weak players, and savings account for the strong.

In other words, it is likely time for a universal reduction in the cost of poker for any player who plays at a site for over a year! Let a poker site becoms a club-like entity.

They should break the rake down like this IMO:

10% profit for the owners to divide...that is a very high profit for any established business...please confirm if you have any business experience for large companies...any stockholder would be tickled pink with a 10% dividend!

10% operating expenses...this is to pay for servers, band width, customer service and licensing and legal fees...not marketing! income for this could also be generated by advertising on the tables...only high stakes games that paid high rake would be immune...or the player could choose to pay a fee to remove the advertising!Let the play money players pay their own way by watching advertisements for beer and whatever adult themed ads have a hard time finding the right demographic audience!

5% referral for bringing players to the site!

75% back to the player as he becomes a bonafide member and has paid a certain gross rake dollar amount! Until the player reached that level, they should get normal site bonuses...i think people who are in the marketing departments and keep coming up with these complicated promotions that require the player to do something to collect on a prize, or make the player angry that they win a widget they don't want!...all these marketers should be shot at sunrise...poker players want Cash...or a savings account to purchase tourney entries, of their own choice Satellites to major events are not included in this rant!

This would allow affiliates to recoup their expenses until the player had played quite a bit

This is not the final answer. I am sure there is some tweaking to do for the numbers, but i bet it would work!

One thing i forgot was transaction fees! These should be the actual cost, and split between player and site! That way teh player has an incentive to keep costs down.

[DING-DONG YO]

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If you market for players and then the people find out about rake back, they do Not continue to play and say well, I just don't deserve rake back. They quit playing or play less at a site and go to sites that will give them a discount.

You cannot put a cat back into a bag! Once a player knows about rakeback, they want it! Economics transcends the wishful thinking of marketers.

[/ QUOTE ]

From a player's perspective, this is dead on. I wasn't aware of RB until a month ago. I have paid a ton of rake to party poker in the past and I'm currently looking for a good rakeback deal. I feel somewhat cheated by them (party) and lied to. As such I will probably quit playing at party until they offer some kind of RB.

This discussion about how they acted in this conference is only further support for me to leave them.

[SinCityGuy]

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I have paid a ton of rake to party poker in the past and I'm currently looking for a good rakeback deal. I feel somewhat cheated by them (party) and lied to. As such I will probably quit playing at party until they offer some kind of RB.

[/ QUOTE ]

Poker sites do not pay rakeback to players. They pay rakeback to affiliates to bring in new players. Affiliates invented giving rakeback to the players, not the poker sites.

What is happening, (and you are one example of thousands), is that existing players are trying to create duplicate accounts through rakeback affiliates in order to get rakeback. This doesn't bring in any new revenue for the site, and in fact it actually reduces their revenue. If you can't understand why the sites are against having their existing player base cannibalized by this, then you're blind.

[MicroBob]

It's DOES essentially bring in new revenue for the site if the player wouldn't play at that site AT ALL anymore without a rakeback deal.

Sites that I wasn't getting RB on are sites that I don't play anymore.
Sites that allowed me to get RB (whether via a 1st acct or a 2nd acct) are sites that are getting my play.


What reduces the site's revenue is NOT letting me set up a duplicate account.

[DING-DONG YO]

[ QUOTE ]
It's DOES essentially bring in new revenue for the site if the player wouldn't play at that site AT ALL anymore without a rakeback deal.

Sites that I wasn't getting RB on are sites that I don't play anymore.
Sites that allowed me to get RB (whether via a 1st acct or a 2nd acct) are sites that are getting my play.


What reduces the site's revenue is NOT letting me set up a duplicate account.

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MicroBob says it so much better than I could. Right on.