Affiliate Marketing

Markus pointed this out at his blog — The Times Online reports, “Price comparison site has set the top end of its flotation price at £1bn, making chief Simon Nixon worth some £627m …the founder of moneysupermarket.com, is set to reap up to £126.6 million when the price comparison site floats on the London Stock Exchange later this month, valued at between £841 million and £1 billion.” In USD thats about 1.27 billion dollars.

It might not be all great, Forbes reports “the company did not specify how much debt it has.”

Much of the ebook market follows not just a pyramid, but a loop — making money online. You know what I’m talking about. Those ebooks that have sales letters of the author boasting of bringing in thousands of dollars a day — with screenshots to prove it. Of course, what he doesn’t tell you is those Clickbank sales screenshots were for ebooks on how to make money online.

Does something sound wrong here?

Yes, some “get rich quick” ebook marketers do very well. These are the guys with the right contacts, huge email lists, or those just ready to break that crusty mold.

The ebook market full of Warrior Forum fanatics isn’t useless. It fills a need. Plenty of guys will continue to rake in millions of dollars from this “garbage” for years. Why? Because of demand.

There is a huge market of consumers who want to be rich. The problem is they really don’t want to do a whole lot of work to get there. Oh, and they also want someone to spell out for them, step-by-step, how to do everything. Well, we’ve just taken out the two critical parts of making a lot of money. Not much left, is there?

So, after purchasing that ebook about making money online, the consumer is given instructions on how to become an affiliate and sell this same ebook to his friends. A few will recoup their investment, but thats hardly anything worth bragging about.

If the market you are in — ebooks, real estate, the stock market — is a pyramid, make sure your not on the bottom. Its not a very profitable place to be.

Are you an ebook affiliate marketer? Here are a few suggestions:

1. Write your own book. Yeah, it helps if you’ve actually made some money online so you don’t have to photoshop your screenshots.

2. Get the book printed for real. Broke? Try some print-on-demand alternatives.

3. Do something different. Everyone and their pet rabbit is a guru these days. A cheap suit and conference room at a hotel just isn’t going to cut it anymore.

4. Become really friendly with affiliates who have access to a large audience on demand (e.g. targeted e-mail lists.)

In case you haven’t gotten the message, a blog where you only post affiliate links to other crappy ebooks isn’t a very good strategy. Neither is spamming established webmaster forums. If you are satisfied with a few sales a day, perhaps. You want to make 7 figures? You better be ready to do some real work.

Shawn Collins interviewed a 14 year old internet marketer on his webmasterradio.fm show. The interview starts about 30% of the way through.

Amusingly, when asked how he was doing he replied “I’m actually at lunch, in school.” You can check out his blog at CPAShare.com.

Ethical? Better question, are the affiliate links going to the writer’s account or MSNBC?

Scroll down to the fifth paragraph of this article about online dating to see affiliate links to GothicMatch and FarmersOnly (odd niche but it claims to have over 59,000 members.)

Update: As readers pointed out, the affiliate link for FarmersOnly has been removed, GothicMatch and GreenFriends’ affiliate links remain.

Those of you in the US have probably heard plenty about the collapsing sub prime loan market. I follow the global economy pretty closely myself, subscribe to the Economist, read economics books, and so on. No big suprise here; it didn’t take a genius to figure out what was going on in the housing market. Smart affiliate marketers were moving away from mortgage leads months ago.

Cheap credit simply drives up prices, increased prices make it harder for people to afford things. Thus interest-only adjustable-rate mortgages have become very popular. In the extremely hot markets, such as California, interest only was really the only option for the average wage earner to even be able to afford payments. Since housing prices had upward momentum this was not only acceptable but seen as a good idea.

Suprise, it turns out housing prices actually weren’t grossly undervalued and prices weren’t going to keep making double digit gains year after year. In fact, the fundamentals have flipped.

Now certain individuals in the United States government and special interest groups are up in arms over “predatory lending.” The complaint is that lenders were giving people home mortgage loans to essentially unqualified individuals. A direct quote from someone off CNN.com “…pushing of exotic loans on people of color, female-headed households, families with children, people with disabilities.” its a little wonky, but it gives you an idea what side of the room this predatorial worldview is coming from.

Since mortgage leads have been such a huge part of affiliate marketing and internet lead generation this is an important issue to many here. Suprising isn’t it how a “doomsday” scenario can suddenly appear in a very large industry overnight — just like we saw with gambling.

Regardless, let me get back to the point. What is predatory about this? Lets look at the reality:

1. Loaning money to someone who ends up not paying it back — who is the real loser, the borrower or the lender?

2. Is it predatory to deny a loan to someone, even if a second party is ready to hand over the money, because the government says so? (haven’t held their job long enough, make $100 a month less than required, etc.)?

3. What about the President’s ownership society? He certainly has bragged about high home ownership rates. Could he be a predator too?

4. What about Alan Greenspan dropping interest rates to the floor to bail out investors in a stock market bubble? The lower middle class with little to nothing invested in the stock market got nothing in return but rapidly inflating home prices. Not such a bad deal if they already owned. Not such a good deal for those who purchased a year or two ago. Hell, this guy even applauded sub-prime and exotic mortgages a few years ago. Could Alan Greenspan actually be the Predator-in-chief?

At the end of the day, the fact remains, investors have been gobbling up ultra-high risk loans for only a few percentage points extra gain. The government could just play hands off and lets these guys f*** themselves. Something tells me thats not quite what will happen.

Google Adwords has just launched a new beta service — Google Pay-Per-Action. This is going to have a huge impact on Adsense publishers as well as Adwords advertisers and perhaps even affiliate networks.

Directly from Google’s page: “publishers in the Google content network can choose to place your ads on their website. You’ll only pay when a user clicks on your ad, visits your site, and completes your desired action.”

I am curious about a few things. First, will the same rules apply to pay per action as Adsense? A big part of pushing affiliate marketing traffic is saying *click this link to sign up for free/enter your email/zip/etc.* Doing that to an Adsense unit is a big no-no. Second, could advertisers shave Google? Why not? It may be Google’s tracking code, but its on your website.

There is a lot of information coming out about this new advertising product. One thing we know is Adwords is adding a new text link ads format for these new CPA ads (man, thats got to be pissing the heck out of the guys over at text-link-ads.com; should have gotten a trademark.) You can read more on the official adwords blog, but basically it looks like publishers will be able to change both fonts, sizes, and colors. These are not hard text links, but the link units that will direct to the pay per action offers.

Diorex has some very strong words to say about the new Google CPA program, tieing it together with Google’s other data collection programs such as Google Checkout and Webmaster Central — “…would you want to share any of this data with your competitors, suppliers, partners, or anyone other than an accountant? Profit per sale, sales volume, average transaction size, conversion rate, or average lifetime value of a customer? I would consider all of these pretty darn proprietary, yet tens of thousands of publishers have handed this very data over to what could very well become your biggest competitor.”

Are you going to use Google Pay-Per-Action?

Sorry Jon and Shoemoney — Diorex’s “Random Musings About Making $$$ on the Net” gets my vote. If you are tired of vague and off-topic posts elsewhere, give these posts a read: white websites and granular tracking.

If you didn’t bring away more value from those two posts than any $97 ebook, you are probably attached to a feeding tube right now.

I’d be lieing if I said I did not enjoy making fun of The Secret two weeks ago. It got me a backlink on ABCNews.com besides attracting some really wacky comments (e.g. I avoided laser eye surgery and healed my own vision)

If you are a member of WickedFire.com you’ll know I’m not the only person who looks down on get-rich-selling-this-product-to-your-friends-after-you-buy-it-from us schemes. You know, those 10 page sales letters full of earnings screenshots that are suspiciously all from clickbank. These seedy products give the entire legitimate ebook industry a bad name. Simply offering an internet marketing informational product for sale causes your audience to question your credibility — even if you have a damn good product.

I was quite suprised today to find the company behind one of my favorite blogs, mindvalleylabs, is launching an affiliate program for this sleezy self-help “Secret” (read my old post if you are wondering why its sleezy.) I can accept an affiliate program for a product I think is rubbish. What bothered me was the video the included for recruiting affiliates.

The introduction video on the blog has a women who makes the following statements — “Its taken me 2 minutes to set up my very own Secret Science of Getting Rich website” — “There are many tools here that I haven’t tried out like.. something called the pay per click ads” — “My friend recently joined the Secret Science of Getting Rich through my website and now she gets her own website as well..”

From the mouth of MindValley’s own co-founder — “Your not going to need any knowledge of the internet, or websites, or programming, leave that to us.”

I think The Rich Jerk made it sound harder than this!

If I want to learn how to be rich, I’ll listen to Warren Buffet, not some self-proclaimed philosopy gurus. If I want to be rich, I’m going to avoid, at all costs, the people who say I just need to buy their product and promise smooth sailing. Enough said.

Here is another Adsense alternative — AuctionAds. Basically what it does is display eBay auctions as affiliate ad units on your site. If someone wins a bid, or joins eBay, you make money.

I tested an older version of the system last year on one of my sites, the results weren’t very impressive for me, but I heard good reports from other publishers. f you are working in a product based niche, definately give it a shot. I do not know about compatability, but AuctionAds could go well with RMX Direct.

I admit, I was being a bit of an ass posting that link yesterday. Doing a search for “day job killer” I made a guess that probably a lot of the results, organic and paid, were from Day Job Killer affiliates. That guess proved to be correct. With one exception (which was two results, and had affiliate links for other products plastered everywhere) every PPC and organic link had a Day Job Killer affiliate link. Some went straight to the Day Job Killer landing page, some had an e-mail autoresponder squeeze page.

In terms of Google delivering objective results, this is an example of complete and total failure. For affiliate advertisers, this is precisely what you want.

In fairness to Google, there is going to be a significant bias when a critical piece of the product is plastering the web with affiliate links for it. Unlike a Bowflex or some diet system infomercial, “making money on the internet” ebooks nearly always involve turning consumers into an army of salespeople.

Outside of this digital cult, there is not very much mindshare. By creating his own brand the author was able provide his affiliates with a specific set of terms to dominate the search engines with. It provides a near-perfect defense against negative feedback.

So what should Matt Cutts and the Google team do to solve this little problem? Not much, in my opinion. With a few exceptions this cult stuff tends to stay out of the mainstream. No mainstream coverage from other sites with real Google weight mean there is no content to rank.

In the meantime, if you want to defend your brand, starting an affiliate program is a very good start. Just make sure you can pay out.