Diorex

Real quick post to say I will be at Affiliate Summit in Boston starting next Sunday. Anyone interested in meeting up let me know.

Read a great blog post from someone named PunditX that I found following one of my backlinks.

It was about how he made $95k in 2 months marketing a product all of us are aware of but few probably
knew it had an affiliate program - Adsense.

His post spells out just what he did and it seems perfectly reasonable to me. I can think of a dozen or more ways to market the product beyond what he did.

The ’secret’ to his success is that he did not assume “oh that must be saturated” or “that will not work”. he went out and made it work.

He even states he tested 35 different landing pages - which is probably a huge driver in his success. Not being lazy is a critical component to affiliate marketing success.

Too many in affiliate marketing assume that they have to follow the crowd or that their AM knows whats best - the entire time I was focused on affiliate marketing I never had an AM I spoke with regularly. There are some awesome deals on CJ noone has ever heard of and most of the CPA networks are in business for themselves first.

I know a guy who markets $.05 clicks to small niches that then turn into Ebay sales. I know another guy killing it in the Wal-mart affiliate program marketing just a few select products via PPC. There are a million things that are not dating or ringtones or <flavor of the month> that are both sustainable and scalable and that do not require super technical skills.

The best advice I can give anyone wanting to get into this space is to get outside the zone of the affiliate blogging ‘experts’ and start thinking for yourself. If you never read another blog post about affiliate marketing, you will probably be better off than if you read the top 50 affiliate bloggers religiously. The honest truth is that most affiliate blogs are full of junk and one hit wonders.

For those who have not heard, the Adwords tool is now giving approximate volume of searches.

I was prepared for this to be badly flawed like the volume estimates from the old Yahoo tool.

I was surprised by how accurate it was for many of the search terms I used, especially on the exact match setting. Broad match is always a little more hazy, so it was no surprise that my numbers varied, but even then it was not a dramatic difference.

This is valuable data Google is sharing, be sure to make good use of it when planning or expanding new adgroups.

On the other hand, the click estimate tool which guesses at volume and price of clicks received based upon a maximum bid is still badly flawed.

Lots of marketers, both affiliate and otherwise have been encouraged, bribed, cajoled or otherwise convinced to use Google Analytics to track their campaigns. I actually suspect that Google reps are incentivized to get advertisers to use the product.

The main selling point is that it ties into Adwords and uses tracking to determine your cost per lead/sale/whatever back to each keyword with little or no effort on your behalf. If you know which keywords perform good or bad you can then improve your ROI and become more efficient in managing your campaigns. The pitch is perfect for affiliates since they are typically both lazy and like the pricepoint of free.

Google recently bought Doubleclick and there was this huge uproar that they might be in the business of selling rankings via their Performics unit (which they said they would be selling that part of the company), but it turns out performics is also an affiliate marketing network.

Yesterday Google announced that they had renamed the affiliate network to the Google Affiliate Network.

Seems innocuous enough… NOT!

Heres why I think this is a major red flag… If you are an affiliate marketer using Analytics for a product through another network where you are driving traffic via search and Google also has that or a similar offer on their network, then they can simply arbitrage your conversion data and use it to identify the best converting keywords etc.

Say you sell Widgets and Google’s free analytics tool say that the keyword ‘blue widgets’ converts for you at a cost of $6 a sale, yet the widget manufacturer has an affiliate listing through Performics
paying $12 a sale. Your 100% ROI profit is in danger of becoming a $12 profit for Google.  Why should they share that with you? afterall it was their visitor in the first place. Your free analytics tool has now cost you 100% of your profit!

Think Google will not do it? The last time I read their terms and conditions, there is nowhere that it says they cant do this. They will make oral statements saying things like “If we did that we would lose the trust of our advertisers and go out of business”, but they have refused to put that in writing in any way, shape or form. In other words, they can do it.

Something to think about next time you take the easy way out and throw Google Analytics on your pages. There is no such thing as a free lunch.

It surprised me that one of the most frequent search term for visitors to my blog is Diurex. Turns out that Diurex is a weight loss drug that helps people expel fat from their body. I dont know too much about it but I wanted these visitors to end up on a page where they could find information about Diurex.

Regular readers should know what I am up to… So back to your regular feed reader. I will say something profound tomorrow - or maybe the next day - or not.

After much thought and consideration I have decided to resign my position at Yahoo. I know I never applied, nor was I interviewed or hired, but eventually everyone who is anyone at Yahoo must resign and I just wanted to get out in front of the rest of the crowd. The mass Exodus of Jeremy Zawodny, Jeff Weiner, and now the Founders of Flickr within days of the Google announcement is the sign that the most senior people across the board are voting with their feet - they have either made their money already and want to work on more fulfilling projects or they realize that Yahoo is never going to make them rich.

Seth Godin has written about sometimes quitting is the right thing. We teach our kids not to be quitters, but the honest truth is that you sometimes must quit something that is holding you back before moving on to even greater heights. I suspect that Yahoo is aggressively holding back its top talent and now is about to have a huge vacuum of talented leaders just at the time they need them most.

It is Father’s Day weekend and as part of my gift, my kids and I went to see KungFu Panda. Pretty funny movie that I enjoyed and so did my kids.

Like many of the kids movies, this one had a pretty simple moral underlying the humor. That moral was basically that “there is no secret ingredient”.

Again and again in life, I have seen people who are on the outside of an industry trying to get inside looking for the secret to how to do something.

Affiliate/Internet marketing is no different. Read on boards or blogs and it seems that most people are looking for the secret of how to make money out of nothing with no effort.

The truth of life and internet marketing is that there are rarely secret ingredients. The people who succeed do so as a result of hard work, perseverance, intelligence and a little bit of luck - not because they have some secret keyword list or way to scam Google or that hidden niche that noone knows about.

As I was reading through the SEC posting about the Google Yahoo search deal, (Nicely summarized at TechCrunch) I ran across one tidbit I find very interesting and something Google may not have thought all the way through.

This line in particular: “Yahoo! also has sole discretion to decide on which pages to display ads provided by Google”

Any advertiser with a grain of metrics turns off the Yahoo content network due to the huge volume of non-converting clicks.

Google is also known to allow partners to serve search ads in some really strange places as search not content.

So if Yahoo wanted to hurt Google - My quick read saw nothing that says Google has a buyout right - I would just serve search network ads to the Yahoo content network.

Advertisers would start seeing their Google returns diminish greatly, Google makes it almost impossible to opt-out of specific advertising partners, and most advertisers do not even know that the search network is an option that can be turned off. If in mass, advertisers lowered bids by even 5%, that would take a huge chunk out of Google’s revenue and stock price, almost certainly triggering some articles about how Yahoo seems to be a better ROI for advertisers etc.

Probably will not happen, but what if…

Totally off post topic - so if you are not fascinated by this election cycle then just move on…

I am sitting here watching the CNN countdown of delegates needed by Obama to ‘clinch’ the Democratic nomination. According to the home of the voice of Darth Vader he just need 6 more right now.

I cannot help but think, and find it strange that not one talking head is saying this, but a Super Delegate is totally uncommitted and can change their vote at any time up until it is placed at the convention - several have changed their minds already, mostly moving from Clinton to Obama.

If Obama did something enormously stupid in the next few weeks or months, or some past event was to come to light before the convention, then these delegates can and almost certainly would change their votes.

This is not the case for the Republicans, because McCain has won a majority of obligated votes that must vote for him on the first ballet, thus wrapping the Republican nomination up regardless of what might happen in the interim.

Now I am not a Constitutional Scholar or anything like that, but what if Al Gore was to tell Larry King he regrets not campaigning for the Democratic nomination and would accept it enthusiastically if offered to him at the Democratic Convention in Denver.

The way I see that playing out is that more than enough of the non-committed delegates are probably sick of both candidates, see Gore as a person who could actually win with dramatic coat tails and that would unite the party - which is very much fragmented currently.

So on the first vote, Obama and Clinton both fall short of a majority and Gore gets a few hundred or so votes. My understanding is that the committed delegates are now free to vote for whomever they want, meaning that Gore, Edwards or lots of others could actually end up the nominee in what would almost certainly be the cure for low convention ratings.

Please dont read me wrong, an Al Gore fanboy I am not. I am however a huge fan of televised train wrecks and the last 4 months has been regularly scheduled Tuesday night train wrecks for the Democratic party. No wonder American Idol ratings were down.  If only Sanjaya had run for president, CNN might have had even better ratings.

Am I totally wrong here or is this nomination process very much not over? Sure, this is very unlikely to happen, but it can? right?

Cannot tell you how often I get a PM or email or AIM message from someone who says they just cannot figure out how to scale or make any money, that all the campaigns seem so saturated, <insert excuse here>.

First thing I always ask is what kinds of things they are they testing - not the offer, but rather A/B type tests? Invariably the answer is a variation of “I plan to start once I find something with a really good conversion rate.”

I am here to say that Conversion rate is not born, it is grown - very slowly over time, with hard work.

Lets take an example of how someone can make a difference by testing.

• Start with a 3% CR which is considered about the industry average…
• Assume $.60 CPC which seems absurdly low to me, but lots of you guys are paying a lot less…
• Assume a payout of $20 per sale - seems fairly generic, lots of products pay more, lots less…
• If these numbers seem totally wrong to you, just set something up at breakeven for what you are seeing and build a spreadsheet…

After 100 clicks, you would expect to have 3 sales with $60 in revenue and $60 in cost - a total waste of time, right? Just move on to the next thing is what almost all people would do.

But the affiliate who likes to test might try a new headline, maybe some new ad copy, different hero shot or calls to action or any of 100 other things…

Say that this affiliate was able to increase conversion through testing by just 5% each month. Just to show how possible this is, we are often looking for 10-15% increases and seem to find at least one if not several every month! So 5% seems like you are not really trying hard to me…

So the 2nd month, you would earn $3 more than you spend for each 100 clicks - a 3% ROI. Not going to quit the day job, but positive progress. At the end of the year, just finding one 5% increase each month the ROI on this “breakeven” campaign works out to be 42% which is almost certainly worth keeping.

This assumes that you do not manage to increase your CTR or quality score or otherwise lower your CPC which is very doable through testing.

Now say, we have a very clever affiliate who manages to find 10% conversion rate increases each month rather than 5%. At the end of the year, this guy has a 185% ROI from the campaign most of you would have walked away from.

Now if you are getting that kind of ROI, you have probably passed up the affiliate network and gone direct, which will be a free 10% lift, plus increased their payout above where they started, potentially significantly, which allows you to pay more, thus increasing your position, your test bandwidth and frequently your conversion rate in a beautiful cycle.

When you are starting out it is not ridiculous to think you might get 20% or more lifts from some tests, and trust me when I say that front loading the conversion increases significantly improves the end results.

All of the above being said, I am not trying to say that any campaign can be a winner. Nor am I saying that you should stick with a loser. I am merely saying that most people fail because they do not test their way into being a winner ad discard lots of things that would have worked with a proper test plan.