Diorex

In the last week E-Bay has stopped displaying ads on Google (not even gonna link to it since every blogger seems to have already written about it…) and just today I see where Wal-Mart has decided to drastically cut affiliate commissions.

Combine that with my recent post about a major company who admitted to me they dont care about their affiliates, blockbusters recent pullback on payouts and I am seeing a pattern start to emerge.

Major name brands do not really need you for traffic, at least they have some data that makes them think that. Ebay does not turn off Google ads in response to a stupid party, they had a well thought out hypothesis that the ads did not pay for themselves in the long run. I suspect that Wal-Mart (which has one of the world’s largest databases and loves to mine it) sensed the same thing. They were paying too much to affiliates for the traffic, that much of the traffic would still come at lower payouts or that they could actually make more from less sales…

People will continue to argue about the logic of these moves, but multi-billion dollar companies are like glaciers. They move slowly. They are not making a rash decision. This was most likely well thought out and tested. It may not work, but they have thought through the downside. Anyone who has ever worked for a big company knows how stupid they are, but it is usually a stupidity from inaction rather than taking action.

When I worked for a Fortune 500 company - worst 9 months of my life - we got a ton of sales from our brand name. We intentionally decimated our affiliate program by not letting others bid on our trademarks, and saw a huge percentage increase in profit from that traffic - we went from paying something like $50 a sale to less than $20 without any drop in sales, we just moved them from one bucket (affiliate) to the other(brand search). Took months to get the change authorized and days to see the benefits.

If you then take the other side of the equation - traffic generation - and look at how hard Google is squeezing people on quality score you quickly realize that the internet is quickly transforming from a wild-west marketplace where anything goes and anyone can make money to a very corporate “brand is king” type of market. As someone who makes my living from affiliate marketing I see 2 outcomes for our breed - extinction (which will be the result for most) and scaling to a level where companies want to work with you and thus give you negotiating power, the status quo is a diminishing opportunity.

Not saying it is ending tomorrow, I just urge all of you out there making a nice comfortable 25k a month from 2-3 verticals to reassess the long term viability. I was once young and making a fortune every month I thought would never end and in the space of 60 days in 1999 everything evaporated. I will not make the mistake of being unprepared again and urge you not to as well.

Today while looking through the Tools section of one of our accounts, I noticed something that I had been waiting for for a very long time. IP Exclusion!

The ability to exclude IP addresses from viewing and therefore clicking on my ads. As a marketer the ads I click on the most are the ones of my competitors, not from any fraudulent intent, rather I want to know if and when they are testing new landing pages, what their landing page ad copy looks like and what colors and formats are or are not working for them.

Without even thinking about it I can visualize everyone of my competitors best of breed landing pages. This is helpful when I see a new landing page, as it might enable me to learn something without paying to test it. I assume (perhaps mistakenly) that a competitor is not going to choose a new control unless it outperforms an older version. So I might be able to quickly adapt based upon their findings. I am not saying a blatant copy, but working their learnings into my new tests.

I also assume that competitors are doing the exact same thing to my ads and my landing pages. Sure I probably pay $500 or so a month across various competitors doing competitive research and I am glad to save that money, but I much prefer to be able to not have to publish my findings for the whole competitive community to see. In the past I have found great new ad copy, only to see my competition blatantly copy it. I have also run landing pages to see similar set-ups from them within weeks of my determining what works. Competitive intelligence is a 2 way street after all.

Now I can just remove my ads from their listings. This will protect my ideas longer by making it inconvenient to do research on my ads and landing pages. At least a few of these companies will be too lazy to bother to check from home to see what I am doing.

Other immediate uses of this in my mind would be to block affiliate networks from my ads. I am not an affiliate of these networks, but they do not know that. In some verticals, the affiliate networks are ruthless about clicking ads to make sure everything is compliant. Take 5-10 affiliate networks across a few dozen keywords and that is a lot of clicks I am paying for them to do due diligence. (One other Darker Hatted idea would be to use this as an opportunity to run landing pages with the word “Free” for Ringtones or otherwise violate T&C I am not suggesting this, but it will likely be done…)

I would suggest parsing server logs and eliminating IP blocks that are low converting with frequent clicks. Unless you have lots of repeat customers, I would suggest a long timeframe to look at this. Don’t just add blocks that get lots of traffic or else you might turn off AOL or a company or university that is sending good traffic. It is also important to use conversion data in this exercise or you are going to cut off legitimate clicks that you want.

For those who want to know how to do this, it is under the Tools menu of your account. In the left column and it is called IP Exclusion. Directions for doing it are pretty self-explanatory.

Shoemoney has opened up his blog to guest posts, which not surprisingly turned into an opportunity to Spam a little.

I have no idea who Big Daddy Lawson is, but he writes an open ended glowing review of Miva - the former stink pile known as FindWhat.

He talks glowingly about his particular niche and how Miva gets him clicks for half price, then hints that Ringtones or Home Equity loans would be worth trying there. Then ends with it “being all about the Money”

Got me to thinking that I know not a soul who has ever received any kind of ROI from this company. I have used them at 4 different companies that spend over $1 million a year for search (most far more). Each time giving them a try, setting a very low budget, very low CPC’s and still getting my entire budget depleted within a few hours and always with no conversions, despite enough traffic to have generated several at a minimum.

Now some might say, I had a bad landing page or bad ad copy or that even my server might have had issues that day, Miva reps certainly tried to make that point. They even went so far as to claim that what works for the other engines is not likely to work at Miva, because the audience is a little more sophisticated.

The last time it happened, I pulled server logs and realized that I was billed for hundreds of clicks despite showing only a few visits from Miva. Miva countered that the visits are from partner sites and would show up differently on server logs. We had set-up a unique URL just for them for tracking purposes and that was the data…Bottom line they were fraudulent clicks, Miva knew it and was trying to gloss it over.

Then a few months later, I get an email from a guy at Miva with a memorable enough name that i recognized it immediately when I got another note 9 months later at my new company. He sent the same exact 3 paragraph email to me at 2 different companies, even with a fake datapoint being the exact same data with the name of the industry changed. Slimy. He signed it “The traffic speaks for itself and results don’t lie.” Which is exactly what i thought about when I read the post on shoe’s blog.

I had a long conversation with someone yesterday who did not realize that Click through rate is important. he made the comment “Even on google?”. This made me think that there are lots of naive new affiliate marketers out there who are gonna read this post on Shoe’s blog and go throw some money at Miva.

Please save your time and money.

Please!

Last night, while sitting in the bar at the W in New Orleans waiting for my wife to get dressed for a night out. I got to thinking about something I read on the plane ride here and realized how it applies to affiliate marketing. Pardon me if it does not come out crystal clear, it was much more lucid last night.

I dont agree with everything Seth Godin writes, but in his new book The Dip, I think there is some great hidden wisdom. For $10 or so, I have gotten my money’s worth.

I keep reading it, and taking away things from it that are very subtle. The underlying theme of the book is that if you cannot be the best at something in your world, then you either need to work harder or you need to quit and focus your energies on something where you have the ability to achieve greatness.

This applies to affiliate marketing. Too many of the people who I talk to are scattershot affiliate marketers. They do 4-5 different verticals, but they all seem to have hit a wall. They cannot seem to figure out how to get past there current level of income. (Many of these guys are earning well over $25k a month, but just cannot seem to scale..)

All of these guys tend to play in the tail of keywords. When I share my average CPC they gulp, and wonder how the heck I can make that work.

In my mind, the short (and thick) head is where the money is at. Sure you can get $.10 clicks and lots of them in the tail, and we pursue those too, but volume is a fraction of what you can get from the more expensive head terms. SEO_mike wrote about this a few days back in many of you guys favorite vertical.

Best advice I can give any budding affiliate marketer - dont be a sheep and follow the crowd. If you are running ringtones or blockbuster or whatever the flavor of the month is, you are not going to be that successful.

Pick a competitive but unknown industry. Go gangbusters on the top 5 keywords. Drive a lot of volume. Test the heck out of your landing pages and ad copy. Then cut out the networks that earn more than most of you realize and go direct to the merchant. Show them your volume, your desire to work directly with them, and dangle the prospect of even more volume if the payout is good enough. There is some relationship building involved, but the affiliate networks are getting rich because affiliate marketers are too lazy too negotiate directly with the ultimate buyer of the lead/sale.

Lots of people focus on ROI. Focus on total profit. Would you rather make $5.00 100 times a day and invest $500 a day to do that or make $1.50 1000 times a day, but invest $5000 a day. Overall return is lower, but the IRS and your banker will like you more with the lower ROI. (Chicks think total profit is sexier than ROI too…)

Hedge Fund managers would kill for 1% daily returns and affiliate marketers are turning their backs on 50% ROI’s, if you have the program but need cash to scale it, let me know I can solve that problem. The head is where the low margin low ROI profits are.

Direct relationships with the buyer of your traffic combined with the volume you get from head terms is where the obscene profits are.

Back to drinking…sorry if this was a jumbled mess….

Google wants your conversion data. If you are already voluntarily sharing this with them, shame on you.

Sure Google analytics, Webmaster Central or Website Optimizer are useful tools with powerful features that are not readily available anywhere else for free. But have you ever stopped to think about why Google is spending millions to bring you free services?

If you ask Google, you get the stock answer along the lines of : “With tools like this, we show webmasters how to more profitably spend money on Google and thus are willing to spend even more.” or some variation of this. They are very aggressive about inviting big spenders into these beta tools to help further optimize websites and thus potentially spend more.
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Fresh on the heels of me ranking for Dave Pasternack’s name misspelled, I thought it might be a good time to talk about keyword strategy.

I used to market Dish Network. The number 1 keyword in that space by a huge margin is Satellite Tv. 1 T 2 L’s.

I just checked my spreadsheets and I got clicks for 47 different spellings of the word satellite, and actually got sales from over 20 of those.

Standard misspelling tools on the net are predominantly mistyping tools rather than misspelling ones. They will help you when someone transposes or skips or doubles a letter in a query. Unfortunately, these automated tools are not as stupid as people.

Words like satlite, sattelite, satalite, sat light, and others dont show up on any of the lists of misspelled keywords, yet they were 4 of my top 7 volume from both click and sales perspectives. Desh Network, Dish Net Work were 2 more. Sometimes it pays to take the automoation out of things and to think like a high school dropout.

As I have mentioned in the past, CTR is not the answer to all of life’s ills. Conversion Rate can be much more important.

But what if you can change the CTR positively without any material impact on Conversion Rates? Well that sounds like a profitable concept.

Here are 2 ways to make your ads stand out without testing ad copy or anything else:
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We recently made a strong push into Google content in a new account and noticed some interesting things.

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