Diorex

I am actually shocked (and flattered) at how much email I still receive despite not having posted in months. Almost every email I get is a big long list of questions disguised as paragraphs asking how I would get started or what niches I think are best or some other request for a shortcut to success. Almost always questions, I dont have an answer to. (if you dont get a response from me it is because I dont feel qualified to answer)

Similarly, we now have 140 employees and not a day goes by when one of them does not ask a very open ended question like what new vertical should we tackle next or which creative should we use for a new site or which pricepoint will attract the highest profits…

I will share with you the same answer that my employees get.

“Do you have any data?” The answer is usually “No”, or they would not have asked the question.

To which I respond “Well why don’t you run a test and get some data.” Once a test has been run, they no longer ask my opinion because they now have an answer (good or bad, testing will give an answer)

I have said it before and will probably say it again, buying data in the form of testing is the best investment you can make in your business. It is not cheap, which is what scares most would be internet marketers away.

This just reminds me of the old adage - If you think education is expensive, try Ignorance. Same thing goes in internet marketing.

Have yet to really see anyone screaming about this, but then again I have not been looking that hard…

I was in SF this week meeting with both Google and Facebook and as a throwaway Google dropped the bomb that they are no longer allowing multiple domains in the same adgroup. Adwords Blog talks about it here.

What this means to the average affiliate marketer is that you no longer can test which Display URL (DURL) works best for you.

Lets take an extreme made up example of a dating site with the goal of a credit card sign-up.

If your DURL is FreeSex.com then you will get lots and lots of clicks which Google loves and thus your CPC will go way down but your conversion rate will be horrible since the DURL implies free when a sign-up is required.

What about a DURL of FatUglyChicks.com? You probably get very few clicks, meaning your CPC goes up, but someone desperate enough to click on that ad is probably pretty likely to convert since they have been somewhat pre-qualified.

This is nothing more complicated than an algebra problem - does lots of cheap clicks with a bad conversion work better than more expensive clicks with great conversion. As a marketer you really only care about the bottom line here.

This is an extreme example, but for a dating site there are literally millions of different possible combinations for URLs - some of which are naturally more likely to succeed than others.

Google used to allow you to test lots of URLs in a single adgroup and rotate those ads to get equal impression so that you could determine which URL worked best for your metrics.

The new revised version of the DURL policy now requires you to set up different URLs in different adgroups - meaning that even though you might be bidding on the same keyword that Google’s algorithm now decides your quality score and will not evenly rotate them and ultimately end up serving the ad that meets Google’s best interest.

Unfortunately this is short sighted for Google. I have a URL that is awful - no one would think it would win in a test, yet for some reason it resonates well with consumers and qualifies them and induces them to click frequently as well as convert - great combination.  Without testing, we never would have found this hidden gem that allows us to pay Google millions of dollars per month. Without testing, Google would have chosen a better clicking DURL and I would have never optimized my business - which ultimately optimizes Google’s business.

Any one else concerned about this change?

I have been asked by several people in the past about doing some consulting work and have always refused. Mostly because I don’t think my insight is worth the hourly rate I would charge to do the consulting. But someone I had corresponded with via email and met at a conference asked very nicely and was persistent enough without nagging that I scheduled a call with him a few weeks back.

We logged into his account and as I saw areas for improvement I pointed them out,  looking through and sharing some of the high level strategies we use for testing and landing pages etc. was a fascinating process because I realized that I had to quantify and justify to myself why the way we do things might be better before I would share it with him.

I know I did not share anything proprietary, but rather things like the best way to setup an ad copy test, or landing page test or how to best setup adgroups etc.

Anyway, the interesting thing about this 30 minutes session was that it really got my creative juices flowing. We are in totally different verticals and I was doing nothing other than commenting on ways to improve his account, but I walked away with 2 ideas that I have put into production for both my personal and corporate accounts, one of which is very lucrative ($1500 per day) - the other is much more promising but I am having some bandwidth issues getting it implemented.

Just a note, I did not steal any ideas, the ideas were my own and not in his account in any way.

The interesting thing for me, was that I believe he found good value in our conversation, and as an unintended consequence I walked away with this creative energy that brought me some very lucrative results.

I guess the morale of the story is that teaching other people what is seemingly obvious to you can make you take a fresh perspective on things and find new opportunities. As an “ideas guy” finding new sources of inspiration is always a welcome thing. I dont think if I consulted for free or on a regular basis that this would work, but I am going to give it a shot every month or so and see if this was a one-off type of event or if it persists.

Idea generation is hugely important in affiliate marketing, “me too” type strategies almost always fail. Take your girlfriend or best friend or mother and sit them down and try and explain to them what you are doing. See the kind of questions they ask, dont dismiss the question, but rather really try and answer them, perhaps you will learn something by teaching someone else like I did.

As a test, because I love to test my theories, I would love to hear your results (good or bad) for those that give it an honest try - maybe this does not work for everyone - maybe it does…

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.

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.

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.

To follow-up on a recent post about domain and error page exclusion ability, we think we have a possible workaround that will enable us to bid on content, domain ads and error ads separately.

We have enough evidence to suggest that the conversion rate on these items are vastly different, and also are susceptible to fraud on different levels as well. As part of our philosophy we always want to bid on the lowest common denominator whenever possible. Match types are in different campaigns, almost all keywords are in their own adgroup etc.

We just put this live so I cannot guarantee that it works, and in fact am sure that Google’s screwy content system is likely to mess it up in some way, but in theory this will work.

We start with adwords editor and copy and paste the enitre content account into a spreadsheet. We then alter the URLs (that is our tracking mechanism) and upload the account twice into campaigns called error ads and domain ads. At this point we have 3 identical campaigns with same bids, ad copy etc.

We then turn off domain and error ads in the original campaign so that it is now content only. In the domain group we turn off error ads so that it is content and Domain ads. Similarly we turn off domain ads in the error ads group leaving it with just Error ads and content.

At this stage we need to eliminate the possibility of content ads showing in the 2 new adgroups. The way we accomplish this is by running a performance placement report and then negative matching every domain that shows up in both the error and domain groups.

This leaves us with 3 campaigns, one that is content only, another that is Domain ads only and a 3rd that is Error ads only. I can now adjust bids and monitor performance for each type of ad and bid according to the return I am seeing from these different tranches of content.

LIke I said it just went live and is not fully battle tested, but on paper it should work.

I have been paying attention to content recently and it has really been paying off nicely.

One of the things I have been doing is making sure that my ads are prominently displayed on websites that are getting traffic for the keywords I am bidding on in the major search engines. So I was spending some time clicking the natural listings and then looking for adsense on them.

I was mentioning this to a friend of mine who we can barely talk to me without him suggesting a script or automating stuff. The amount of stuff I do manually drives him up a wall. So a few days later in my inbox I had this nifty little tool that basically allowed me to upload a list of keywords and then the script would automatically check the first few pages of search results on Google, Yahoo and MSN and then tell me which pages ranked for what terms and which pages allowed adsense ads.

I quickly fired it up and ran it for all my best keywords only to find that my crack content team already had us pretty much showing up on these placements. There were a few sites where we went and fine-tuned for better position or to show up on, but for the most part we were on top of things.

Then a few weeks later I was in a training class for some new hires and we were covering a list of words we are not allowed to bid on for competitive or legal reasons and one of the trainees mentioned it was too bad because we were probably losing a lot of profitable volume. A few hours later, back at my desk, I got an IM from my friend asking how his tool had worked out.

That was when I decided I needed to fire up the tool and look at my pretty extensive list of prohibitive keywords. Eureka! I was all of the sudden able to target dozens of websites that ranked for terms I would love to bid on and could not. These clicks came at bargain prices and converted really well.

Moral of the story… Look to the content network to pick up volume on keywords you are not able to bid on for whatever reason. Then doublecheck to make sure you are showing up on the sites that rank for those keywords.

Sorry about infrequency of posting…. To be perfectly honest, I have been working on a lot of stuff that I won’t share because it is either ultra proprietary or just pretty dull. I made a decision at the very start not to post just for the sake of posting…

I was walking through a bookstore the other day and ran across a book written by one of my favorite Forbes columnists named Ian Ayres (sure wish they would have an article in each issue). The book is called Super Crunchers and although it has very little actual math in it, it is about how people from all walks of life from advertising to politics to medicine are using math and large data sets to make decisions.

One of the things I loved most was that he actually named the book by buying adwords on a few relevant keywords with the proposed names of the book as the title for the ads and then measuring CTR to determine what got the best response.

The book is less about the math and more about the ideas and implementation based upon math. I think it is like $20 bucks retail and $16 or so if you are an Amazon freak. As you probably already know, it is my opinion that if you are not testing you should not be in the business of online marketing.

If you are serious about this business, you will not learn a single thing about online advertising, but you might make a few million dollars from the brainstorms and idea that come from this. Which makes it a must read in my book.

Google has been testing the color of the premium boxes on Adwords. This is the first time I have seen it.

The interesting thing to me is that in the screenshot, the yellow box looks clearly yellow.

However on my monitor, the yellow box on an actual search is only visible when you look at the screen from an angle. When you view the screen head-on the box is completely transparent and the three ads look like they could be natural results. Yes, the formatting is a little different, but I look at this stuff all day everyday and my initial thought when I found this was that this was a search without premium listings. I only noticed it because I walked away from my desk.

Is this an optical illusion? Are others seeing similar things? Is this an unintended consequence or a very specific color designed to appear transparently? Is it a chance outcome based upon my monitor settings, angle of the monitor, and lighting at my desk?

As an advertiser, I very much like being in the blue box, but I am somewhat concerned if people are being tricked into thinking that my ad is a natural result.

I see no reason why every single keyword should not be in its own adgroup. Why every single ad copy should not have its own display URL. Or why each match type should not be tracked differently.

Yes, it is a pain to set-up. Yes it is anal. Yes it matters. It can mean tens or hundreds of thousands of dollars a year difference.

The difference between singular and plural keywords can be huge. It is not out of the realm of possibility for the plural version to be a home run, while at the same time the singular version of the keyword could be bleeding you dry. Or the broad match is getting killed and the exact match is a huge cash cow.
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