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Why affiliates refuse to make money

     
8:16 pm on Sep 15, 2008 (gmt 0)

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This is for “type A” affiliates – those that set up pages/sites to specifically target offers. If you have content and are looking for advice on what type of ads to place, please look elsewhere. :)

Obviously there is no shortage of advice on the web about how to successfully make money as an affiliate. Some of it is very good, some not so good. Here is one man’s opinion on why so many people fail to make decent money with affiliate programs.

I am addressing CPA deals today. We can talk about leads another time.

1. They look for niche offers – Yeah, you heard it here. Niche sucks. Go after verticals that have heavy demand. Sure, you can select a niche within that vertical, but it is very difficult to make good money selling things that people generally are not looking for online.

2. Wrong type of product - Select areas that fill very specific and deep rooted buyer NEEDS. Just like in offline sales, if is far easier to sell to someone when they want something badly. Think vanity, sex (not content/adult), money, or products that are in high demand that are basically only purchased online (anything where there exists an offline option is bad unless it fits in one of the prior categories mentioned)

3. Too much babble – Find merchants that have good checkout pages and send the visitors there ASAP. You need 60% of all your visitors to get off of your page fast and to the offer.

4. Choosing Low CPA- Find products/services that pay $30+ per sale. This does not mean home furnishings! That does not meet any of the above criteria. Good deals should be high margin offerings that pay 30-50%.

5. Adwords – Adwords can be very effective but do not forget the #2 and #3 choices. You can basically guarantee profit with these engines if you have even the slightest clue.

What you do need to do is:

1. Find an offer with high demand (search) that pays $30+ per sale.
2. Make sure the product either makes someone look better or feel better about themselves OR can help them financially.
3. Make sure that it is much easier to find this product online than at the store/phone book.
4. Create landing pages that are designed to get the person to the merchant’s page or checkout. You cannot take an order so send them somewhere that can. (pre-sell pages are good in some cases but I would opt for a higher # of people hitting the merchant personally)
5. Do simple keyword research and throw ads up on yahoo and msn. Plan on spending $.75 a click. FOCUS ON BIDDING ON AS MANY RELATED BRANDS/PRODUCTS AS YOU POSSIBLY CAN.
6. Use conversion tracking. If the offer works, start the seo process.

Even the laziest and most inept ppc guys (me) can make $30-50 a day per CPA deal with 1 hr work by selecting the right program. Obviously we do not talk about specific programs on here (it would be a mess) but use your head. Think about high margin products – this is where the merchants can really pay. Stop with the super niche and promote products that people actually buy. Use ppc to get going and then focus on organic search for the long haul.

I really believe people have come to “outsmart” themselves and in the process have overlooked what is right in front of them.

Any thought about affiliate promotion really needs to begin and end with who and what you are promoting. Does the merchant have a good checkout/landing page? Do they have compelling sales copy or any USP? Are they paying me at least $30-50 per sale? If not, is it because the margins are too thin or do they want to take 75% of the profits?

Wow, sorry for the long post. I just get asked a lot about what the hot thing is to promote and am shocked at the lousy programs and constant focus on adwords alone I am seeing.

3:59 pm on Sept 16, 2008 (gmt 0)

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Good post! Scores in several places!...KF
1:58 am on Sept 17, 2008 (gmt 0)

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Giving away all the secrets there mfishy.

When looking for new products to promote, I look for a few things, products that average around $1.00 EPC, have a relatively high demand, and compared to oversaturated markets don't have an over supply of competition and or spam. Although use spam to your advantage as it can tell you that this is an area where the spam merchants are making money.

3:23 pm on Sept 17, 2008 (gmt 0)

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Too many things get revealed in one post...
it is a great post for anyone, no matter if he is just starting up or working in this industry for YEARS !
/BP
3:43 pm on Sept 17, 2008 (gmt 0)

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Nice post indeed!

Thanks very much!

6:59 pm on Sept 17, 2008 (gmt 0)

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hehe, wow, respect from the heavy hitters! :)

One point that I may not have driven home when qualifying a merchant (besides if you think they can convert online sales) is you have to decide whether affiliate marketing is simply an "add on" to their business model or a major component.

The elite programs are driving a big portion of their sales through affiliate marketing. Some are driving nearly all of their business through aff sales. Quick response and assistance is a decent indicator but you can usually just tell by a gut feeling. Big networks are typically a negative mark because the merchants often view this as simply another ad network and affiliates as a PITA.

7:15 pm on Sept 17, 2008 (gmt 0)

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Niche sucks.

He, he. I absolutely love niches, especially those where the products are somewhat expensive and the buyers have a bit of discretionary spending power. (Well, at least until a couple of days ago; good thing I also run a few more broad-based sites.)

Good stuff, mfishy.

8:03 pm on Sept 17, 2008 (gmt 0)

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very good post. I have been making decent money through affiliate marketing in the past several months, but I am not sure if what I am doing falls under what you mentioned. here are my questions:

1. if i am selling only Samsung cell phones, is that a niche? or is a niche more like selling Samsung DX900 cell phones only?

2. for adwords and other paid search advertising, if I am selling cell phones, would i consider buying terms like "cell phones" if it's not overly competitive? or should i rather focus on "Samsung DX900" type of terms?

thanks.

9:24 pm on Sept 17, 2008 (gmt 0)

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Which affiliate websites do you recommend using?
10:24 pm on Sept 17, 2008 (gmt 0)

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If you do all of the above, what is a realistic sales ratio? 1%? 2%? Higher?
10:59 pm on Sept 17, 2008 (gmt 0)

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Any chance you can post an old example in details of something you have done in the past that's no longer valid? That would be great
1:27 am on Sept 18, 2008 (gmt 0)

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really interstin posts. i'm going to build a affiliate marketing module for our couple of websites that go along with our shopping carts. i'm really dying to get involved with a ppc or ppa program. i have a friend running a brokage of banner adds and she does really well with it. these tracking systems aren' that hard to build and have already been built. all these generalities posted about making moeny through affilate marketing seems frustrating. i've owned a service business installing and fixing stuff for homeowners for 10 years and now that the market is falling out i'm looking to get into something else! affiliate marketing or bust!

i'm really curious to do this research myself. alot of people have this favoritizm about adsense and adwords . and other would rather use banner ads . and the reality of it is there are to many variables to even begin to realize what might be right for a particular site/blog/ecom site. ad sense probably does well on some sites but not as good as banners on others. what those are for either of them someone has to know. i've been looking at the major players online and just taking a look at wht they use. obviously i'm noticing alot of them do use adsense and sometimes a combo of banners as well. but i can tell you one thing the person that made all the money in the gold rush was the guy selling the shovels!

[edited by: eljefe3 at 3:00 am (utc) on Sep. 18, 2008]

4:11 am on Sept 18, 2008 (gmt 0)

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I've been in niche for a long time, and it can be frustrating for the reasons mentioned above. Still a got some good ideas on honing in on a particular product. Great post!
8:50 am on Sept 18, 2008 (gmt 0)

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1. if i am selling only Samsung cell phones, is that a niche? or is a niche more like selling Samsung DX900 cell phones only?

Niche can be a relative term. I would say that Samsung cell phones qualifies as a niche but what it really comes down to is market saturation.

2. for adwords and other paid search advertising, if I am selling cell phones, would i consider buying terms like "cell phones" if it's not overly competitive? or should i rather focus on "Samsung DX900" type of terms?

The only way to know for sure is to test the visitors by trying generalized terms in small quantities (with individual click tracking) and looking at the ROI.

9:28 am on Sept 18, 2008 (gmt 0)

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ppc roi increases as your relevancy increases.

selling blue widgets. buy the term blue widgets.
your roi on the term widgets will be substantial lower.

9:46 am on Sept 18, 2008 (gmt 0)

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Is direct linking to merchants through PPC advisable, or creating a site/landing page and then take the visitor from there to merchant's site advisable?
12:03 pm on Sept 18, 2008 (gmt 0)

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Many merchant landing pages aren't as good as they could be, although in competitive markets they are getting better, YMMV.
I've heard horror stories at various forums that some unscrupulous merchants were pinching the keywords from their affiliates when they direct linked and were bidding on their terms. STAY AWAY from these programs!

I doubt most do this, but if you find a profitable niche, you would want to do your own testing to see what lander works best for you. This could be the merchant lander, but until you compare against others, you won't know.

3:40 pm on Sept 18, 2008 (gmt 0)

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I've heard horror stories at various forums that some unscrupulous merchants were pinching the keywords from their affiliates when they direct linked and were bidding on their terms

There is more to it than this. Google, for example, only allows 1 display URL per domain. The display URL must also match the destination URL. If an affiliate is trying to direct link to the merchant’s site from an Adwords ad, Google only allows one ad with that display URL. Either the merchant’s ad or the affiliate’s ad will not be displayed.

I'd imagine this would upset merchants since they could essentially lose control of their ad copy and would probably cost more to pay affiliate commission than a single click.

This does not always hold true for Yahoo and MSN, but I can definitely see why a merchant would not let affiliates direct link or bid on branded terms. I can also see why affiliate would get upset, but sometimes you just have to be creative and expect that the easy route doesn’t always work.

[edited by: MadeWillis at 3:41 pm (utc) on Sep. 18, 2008]

4:48 pm on Sept 18, 2008 (gmt 0)

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Very nice post, mfishy!

The elite programs are driving a big portion of their sales through affiliate marketing......Big networks are typically a negative mark because the merchants often view this as simply another ad network and affiliates as a PITA.

You've really hit the nail on the head with this point - couldn't have said it any better than this.

7:00 pm on Sept 18, 2008 (gmt 0)

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Is direct linking to merchants through PPC advisable, or creating a site/landing page and then take the visitor from there to merchant's site advisable?

If you can do it and get the traffic there is no better way. For seo it is not that simple and some of the ppc experts here can speak to how that messes with quality scores and editorial issues. But all other factors aside, yes, of course it is best to link directly to the order/sales page!

Let me attempt to clarify what I mean by niche.

Selling a specific brand of cell phones is not niche. Cell phones are a highly sought after product. I have not promoted cell phones and do not know if the CPA is high enough and it does run into the major offline competition however. That said, I am certainly not saying my way is the only way - just ONE WAY that has proven to work.

An example that may be clearer is "Diet Pills". Obviously there is a huge demand for weight loss products. Always has been, always will be. Just because you are selling a secret, special, one of a kind, seen-nowhere-else diet pill, does not make your offering niche (in the way I am using the term). I am talking about spending days finding niches where there are very, very few online buyers in the general category.

Conversion rates need to be at 1.5%-2% on decent traffic. If you are just throwing junk out there, that's an entirely different, and often effective strategy as well. But it may be useful to simply do the math...

Another clarification I should make is I am not talking about making $30-50 a day (if I were I should be shot for posting). I am talking about systematically making $30-50 a day for many programs with little effort AND, most importantly, finding what works and beating it till it is dead, then beating it a few more times :)

Many affiliates spend day upon day thinking about strategies when the single most important factor by far is the program itself - so choose wisely!

7:13 pm on Sept 18, 2008 (gmt 0)

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mfishy, great info.

As I said before, any way you can post a detailed example of a campaign you have done in the past that's no longer valid? (either it died off or expired). if you can post for example, keywords you bought, ad copies you used, and how you discovered that affiliate program, that would make this the great affiliate marketing thread ever! i never see anyone posting detailed real life examples of successful affiliate campaigns (and i am not talking about the ones that are making money RIGHT NOW, i am talking about things that made money before but no longer works)

7:35 pm on Sept 18, 2008 (gmt 0)

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Nice post.

i am talking about things that made money before but no longer works

If it makes no money is useless info. Why would you set up a campaign with things that do not work anymore? Everyone should learn the rules, not the samples.
7:54 pm on Sept 18, 2008 (gmt 0)

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Once one has been shown how to fish and been given ideas where to cast ..one learns more by tying flies and making lures oneself and walking the river or the shore ..than by asking to be led by the hand over empty waters ..

and the fish you catch yourself tastes sweetest of all

@mfishy ..mes respects

11:29 pm on Sept 18, 2008 (gmt 0)

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[newbie alert] Great post. Every year or so I run into a great PPC affiliate advice post and I swear I'm going to try it again. This is one of those posts.

So here I go again as PPC cannon fodder. Time to refresh my HTML table skills. Time to write some Top 10 Reviews about a very high demand market available only online. Time to watch all my leftover hard-earned money disappear in a blur of non-converting clicks...

Then I'll curl up in a corner and lick my wounds for another year until I save some money and stumble upon another inspiring post.

Seriously, for some of us it just doesn't come easy. That's why in our desperation we end up clicking one of your ads and buying this affiliate course or that tool and stay up late reading and learning them while you earn commissions off us in your sleep. ;)

12:47 am on Sept 19, 2008 (gmt 0)

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Another thing I'd add, is the term "affiliate marketing" is a bad term for affiliate to use, IMHO. Marketers advertise stuff, affiliates sell stuff & if you want to succeed as an affiliate, ya gotta do more than market. Just give people exactly what they are looking for - the price, the order of the products, the product attributes. For some of the most profitable and long term programs I've promoted, it was several years before I ehad any contact with the affiliate manager or merchant because the only thing that mattered was a site with lots of landing page flexibility.

You can buy "long tail" keywords but sometimes long tail keywords are not long at all, just one really specific search term & yes, one search term can be very specific and relevant & pull in a $300 payout on a $0.15 click.

12:56 am on Sept 19, 2008 (gmt 0)

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Heh, I doubt you click my ads and I certainly never earn money off of scamming newbies...stay away from "internet marketing" and sell real products.

Too many people looking for secrets when they could be making money promoting stuff that sells with very simple tactics.

12:58 am on Sept 19, 2008 (gmt 0)

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Thanks for that clarification, mfishy. I'd known there are hotshots hereabouts, but an hour's work, then US$30-50 per day (and then, presumably, repeat...) - whew!

A fine thread.

I presume it can help to have several sites already, so can link to a fresh affiliate site - as then higher chance of traffic thro google n other search engines(? - or just rely on ppc, with search engine traffic unlikely in hard fought for area, without way more work)

1:47 am on Sept 19, 2008 (gmt 0)

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researching/finding he right programs takes time - setting up a ppc camp and making $$ off the program is pretty fast.

SEO (AKA link building) is an entirely different topic and that will take a lot more than an hour lol

4:38 am on Sept 19, 2008 (gmt 0)

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honestly, when the analogy of practicing fishing in an emty pond was made. i sort of cracked up. any fishing analogy is the way to portray something to me thats for sure. i would like to say though. mfishy the way that you speak about your business reminds me much of myself in speaking of my business to people that don't knwo much about it. its sort of hard to completely understand how to learn to play guitar without actually putting your hands on one. or as many tutorials/books/forum threads you read/watch. there is no subsitute for putting your self on the road for the first time and driving. i've started several businesses and learned most all trades in the construction industry here in florida. and i only learned these things by going out on my own and #*$!ing up a couple times! or joining a crew of people doing it and taking note of there efficent work protocals. I am adding a affiliate program to one of my sites and i'm really wondering wht kinda of people are going to be attracted to it. in one sense i think hosting my own sort of brokage of ads or links gives me a better control on who gets approved to use them. But at the same time it doens't enable me to get the exposure that alot of the larger ad brokerage companies get. i really am excited to get into this . i've been in the horticultural industry in florida and it relates to real estate and lets just say its not going good. if any one has any experience in hosting there own affliate marketing program for there sites let me know!
9:39 pm on Sept 23, 2008 (gmt 0)

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Is direct linking to merchants through PPC advisable, or creating a site/landing page and then take the visitor from there to merchant's site advisable?

No but there are pro's and con's to this...
pro's:
- less clicks for the customer
- easier to implement
- landing page is already optimized
con's:
- you overlook creating your own brand
- you're (most likely) not able to track the keyword typed into a PPC engine so your analysis is hampered
- setting up your own PPC tracking technology can be difficult

Just to flat out say landing pages are good or bad scares me...it really depends on your requirements. For a college student wanting to make lunch money I would say avoid landing pages and focus on arbitrage - be quick & dirty about it. For someone creating a defensible business I would advise building your own brand, community and destination for customers.

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