Affiliate Marketing

After reading Shoemoney’s post about a CPAEmpire Ringtone offer that auto-checks the TOS agreement and auto-submits when the user enters the last digit of their phone number I thought it just couldn’t get any worse. Then I noticed that Dadamobile launched this special offer yesterday — Fart Ringtones.

Affiliate Summit has come and gone. I had an unbelievable experience meeting and hanging out with the sharpest (and sometimes wildest) guys and gals in the industry.

The panel discussion I was on got off to a questionable start but ended pretty well. I think this was the first Affiliate Summit for all three of us, so we were caught off guard having no moderator.

More details of the session can be found at Shoemoney.com and conversion rater. Andrew Wee also has a good write up. Me and Jeremy sat down with him before the session for lunch and talked. Jokingly he said “This is like my own private Q&A.”

I’m a little hesitant to watch video of the session. At one point I said I just forgot what I was talking about and handed the microphone back to Jeremy.

For the heck of it, here is a shout out to some of the others bloggers and marketers I met and hung out with - Jon, John, Mike, Andrea, Brandon, Tom, Chris, Andrew, Pat, and if I missed you post in the comments.

Shawn Collins has announced on the Affiliate Summit e-mail newsletter that 2007’s Affiliate Summit West is on track to completely sell out by tommorow. As of writing there were 35 slots remaining.

I am scheduled to be on the panel — “Ask the Experts: Super Affiliates” Monday January 22nd with Jeremy Shoemaker and Jon from WickedFire.com. If you are on the fence about coming, this is your last chance! If you have never been to a conference before this is the one you need to attend. If your broke, put it on your credit card and worry about it later.

UPDATE: Affiliate Summit is now sold out

I am suprised it took Amazon.com this long to get up to date with standard payment practices. I just recieved this in an Amazon Associates e-mail:

“Beginning January 1, 2007, your Amazon Associates payments will be monthly instead of quarterly, paid approximately 60 days after the end of each month. For example, referral fees you earn in January will be paid at the end of March, and payment of referral fees earned in February will be paid at the end of April. As part of this change, referral fee tiers will be adjusted to reflect monthly instead of quarterly item quantities”

I have found that internet sub-industries often have skewed perceptions of each other. For the longest time domainers were viewed as squatters, now publishers are viewed as made-for-adsenser’s (made up that word), and so on. These myths actually benefit the “victims” by decreasing competition until everyone else starts figuring how rich the players are getting.

Had read a single article about domaining that didn’t portray the industry in a negative way as “squatting” I’d probably have a very valuable portfolio today.

Here is another myth — affiliate marketing is actually multi level marketing. Its not. Multi level marketing certainly can involve the use of affiliate marketing. So what is the difference?

Multi level marketing is a business model that relies heavily on bringing in new “partners.” Often the “partner” has to pay money to start selling the MLM’s products. The partners who actually get rich do so not by selling the MLM’s product but by bringing in lots of new partners.

Here is an example: My name is Bob and my friend Jack started a MLM company “Dutch Tulips.” To join I have to pay $500 on inventory. For every package of Tulips I sell I make $5, for every new member I bring in I make $250. Do the math, what am I going to spend more time doing?

Now lets take a look at internet affiliate marketing. In online affiliate marketing you don’t have to pay a joining fee to participate (if you do, run the other way and don’t look back.) You are paid a flat fee or percentage for a sale or lead.

Like MLM you can make money off of referring new members. There is a difference, lets take a look at the math. A typical referal percentage is 2% of the new member’s commissions. That means the new member has to make over $12500 just for you to make $250. Or, lets put it another way. In order for you to make a six-figure income solely off of referrals, the total commissions of those referrals will have to exceed $5 million. In MLM you could make 6 figures without any of your new referrals earning a penny.

Affiliate marketing serves a very legitimate purpose in the world of online advertising: saturation. As a lone company it is very difficult to cover all of the internet content channels. Since affiliate publishers are incentivised by performance they can take extra efforts to ensure an offer is seen, visited, and completed — something a traditional ad buy can not do.

The main business models of MLM and affiliate marketing can be merged, warped, and changed. Your ability to identify one from the other does not come through recognizing words but rather recognizing patterns. Before you participate in any new business opportunity first think about how the business model really works despite what others may tell you.

Last month I made a post about what I hate about web publishing. The problem is you never know how much you are going to make! On the other side, some of us enjoy the suspense and possibilities.

Here are some suggestions to help you balance out your income:

1. If you have a few sites that are particularly seasonal, invest some time on other seasonal niches to counter-balance the former.

2. Balance out short-term projects with long-term ones. A general rule of thumb is short-term projects are worth spending time on if they are capable of making an obnoxious amount of money. Balance high-risk with low. There are many gambling affiliate marketers who learned this the hard way.

3. If you reinvest your profits in to longer term, hands-off projects, you can softly shut the door on disaster scenarios rather than trying desperately to inflate a life raft during a storm.

As has been posted on Jon’s affiliate marketing blog today, Jai Rajkumar of Azoogle has passed away. He was my affiliate manager until June of this year. More information in this thread on WickedFire.

I am happy to announce that I am a confirmed speaker for Affiliate Summit 2007 West. I am officially speaking at “Ask the Experts on Lead generation, PPC and SEO, and Becoming a Super Affiliate.” There should be four total speakers at this session including myself and Jeremy Schoemaker. I am not entirely clear on the details of how the session is going to work; I will post more information when I find it out.

If you have any involvement in affiliate marketing, either as an affiliate marketer, merchant, or network, you should be at this event. WickedFire.com is giving away 125 Hall & Full Conference Passes to Affiliate Summit. No excuses to miss this one.

This isn’t exactly breaking news — Alex, co-founder of Azoogleads, responded publicly about a rumor about employees being laid off which was posted on FuckedCompany.com (great site to read during the dot com bust, by the way.)

Alex reports that in fact they have around 140 employees, and the 16 that were fired were lower performers.

AzoogleAds has been able to ride the 2006 boom of ringtone offers. In the process this allowed them to attract the internet’s top affiliate marketers. Assuming that their finances are in order they are positioned to be a powerful force in online marketing and advertising over the next few years.

Last month I posted this — “I decided to see how much money I could make by devoting the entire month of August to building affiliate sites. The goal is to work 7 days a week, devoting no less than 10 hours a day to this. Not much to report other than my shoulder and back are killing me right now.”

The results: I didn’t meet my 31 day goal for August, but I broke it and flew past a few days later. I am not going to publish numbers; I will say its definately enough to live on.

I did a few things with Azoogle earlier this year so this was not exactly my first run at affiliate marketing. Additionally, I have run PPC campaigns on Adwords since mid 2004 (with mediocre results.) So to be fair, if you have zero experience in this industry there is a path to be traveled.

Despite focusing on affiliate marketing right now, my long term goals still involve building profitable internet properties.

There are good reasons to expand your knowledge base of making money online. I think I have pointed this out before, but this industry is very segregated. On occasion you have a few people who crossover, dig deep, and reap the profits. At a quick glance, how many “adsense emperors” (you heard it here first, 0 results in Google) are making money from affiliate programs? Or how about domainers, making 10 or 20 cents a click when the traffic buying is bringing in $10 affiliate commisions?

It pays to focus on something specific and get really good at it. The thing that really sticks out to me is how many people in these segments sub-industries of online marketing think the other parties have some racket going on. After all, how many years have we heard about “domain squatters”?

Bottom line — keep learning. Get out of your comfort zone. Find out why and where your revenue is coming from. If you are making money from Adsense, learn about your top advertisers. If you are already successful at web publishing chances are high you can make a lot more money with a little extra work.