Diorex

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.

Not to get too nerdy, but when I used to play Dungeons & Dragons type games on the computer, I was always asked to determine my characters alignment, which indicated how I would generally react to a situation.

Paladins always had to be the good guys. Assassins were typically evil. You could also be a troublemaker and be chaotic or totally neutral etc. Essentially you could be good or evil and lawful or chaotic with neutral combinations of each. I usually chose Chaotic Good because even then I was an outside the box non-conformist who was basically good.

Anyway, as I am getting more into the affiliate management space, I am starting to realize that the same holds true for affiliates.

• There are the affiliates who only care about themselves, often using fraudulent or misleading methods to drive traffic, confuse consumers or outright scam advertisers - these would be the chaotic evil alignments - out for only themselves and noone else.
• There are the people who are pushing the limits (think Google takeover Scams, or someone using Splogs to game the SERPS) - I would categorize these guys as Chaotic Neutral. They are gaming Google, but in general are not misleading consumers nor advertisers.
• There are the guys who go out of there way to provide quality leads and make sure that the leads are quality for both the consumer and the advertiser. Often this is the way in which they protect themselves. This is the model Lawful Good paladin.
• There are of course combinations of all of the above. They guy who bids on trademarked terms in violation of an affiliate agreement who do not scam consumers but are intentionally breaking the advertisers rules. The company who has a valid unsubscribe in their Can-Spam compliant emails, but then just mails that consumer from a different domain or for a different product.

As an affiliate, I subscribed to the theory that the fastest way to higher payouts, stronger relationships and overall more predictable earnings was the Lawful Good affiliate character. I was always cognizant of the fact that if I provided bad leads or otherwise unprofitable business to my partners, then my long term viability could be compromised. It was certainly not the only way to achieve my goals, just the way I chose.

Now that I am running a large affiliate team, I am dealing with characters from all walks.  Some are focused on the highest possible payout - to heck with my profitability. Others are slimeballs who consistently mislead consumers and draw unwanted regulatory attention. Still others are very focused on long term relationships and although want a high payout, they also want to make sure their traffic quality is good and that my profits are stable - these are also often the guys who understand that payout is merely one side of the equation - and that conversion rate can be far more important.

I am not trying to condemn any of the affiliate types (well maybe the Chaotic Evil ones who intentionally screw us and our customers), but rather bringing to light that there are many shades of affiliate marketing other than the color of your hat.

Having been on both sides, I do not have a preference for one type over another - I just know that some types of alignments tend to wear a different color hat with higher frequency - Green, for the money they make and the envy they attract from others.

So what is your affiliate alignment? Is that part of the reason for your success? or is that what might be getting in your way from building a sustainable business? Have you ever stopped to think about the ultimate value of your traffic? or are you focused on how much money you can make? have you ever worked with a partner with a lower payout because they pay more reliably or convert better?

Just installed Xobni for Outlook this week. So far I am terribly impressed.

Xobni is kind of a personal assistant for Outlook. One of my issues with my email is that I long ago started creating folders for different tasks around the office. So I have a folder for my Google team, another one for Affiliates, another for IT, Creative etc. Then have folders for my direct reports and colleagues I email frequently.

Well this turned into a mess in almost no time. Say I had a creative for my Google team, but it was based on something from Yahoo and now we needed a little tweaking from IT. A single thread now ends up in maybe 5 different folders. Which means to do a search to find the attachment I am looking for, I might actually have to wait through outlook’s slow ass searches in 5 folders.

Then I need to find that itenarary on the trip I took in February to Miami, I flew maybe 15 times so far this year, and probably had 10+ emails around each trip - I basically had to open 15 emails to find the right one.

Or what about someones phone number - the way my interoffice addresses work, I actually have like 5 different contacts folders. I dont know how or why this is the case, but it is. With Xobni, I just type a persons name and it gives me their number - it does not even have to be something I saved, it can be from their signature - has yet to steer me wrong yet.

Xobni solves all of this and lots more. I can type in a persons name and it will show me every person with that name I have ever sent or received an email from, click the name, and I now see every conversation I have had, it even tells me what time of day they send me email, what the best time of day to get a fast response is and who I email the most with.

Today, I could not remember that sales reps name from something I renew every 3-4 months. Just type in a keyword that identifies that product and up pops a list of anyone I have emailed using that keyword. Click on the reps name, his phone number and email address pop right up - what used to be a frustrating few minutes of searching was a 5 second process.

The creative teams sends me no less than 10 attachments a day - finding the one from last week I need is always a nightmare. Now I can type in the name of the creative - or the person who made it or even the client it was made for and I get a nicely sorted list of attachments - which never fails to identify the attachment, I dont even have to open the email, just click on the attachment listed and it opens.

I am less than a week in and I am in love with this product! It may not be for everyone, but I probably get close to 90 emails a day and our company is pushing 70 people now - no way i remember everyones last names or can spell some of the really hairy ones.

I was honestly spending 15+ minutes every day just looking for old emails (or the spreadsheet with the results from the multivariable test we ran sometime last spring or was it summer). I can see how someone who gets lots of affiliate junk mail could put this to work. Looking for a new dating offer - just type ‘dating CPA’ into the search tool and voila all of the emails that had the hot new dating offer I never even read until I needed them.

Alright now that I have praised Xobni - what other Outlook plug-ins are there? What else can I not live without once I have it installed.  I have had it for 4 days and I would pay a monthly subscription to keep it.

Here is a screenshot of a page I found, but the images and my ramblings do not do the functionality any justice.

(sorry for stealing the image I got it from www.digitalhome.ca - but I am clueless as to how to take a screenshot and then upload it - I frequently amaze myself at what I cannot do online)

On a lark, I tried to register Diorex.com and was shocked to see that it was available. Not 6 months ago I had offered the owner of it $1000 and been turned down. So now $8 poorer, I own the one domain name that makes any sense for me to have.

After about 500 Private messages on boards, Instant Messages, and Emails - and to celebrate my new acquisition - I decided to put the archives of my blog live.

No promise that I will continue to post. In the 6 months or so since I have stopped blogging - our business has exploded and my time is even more scarce than before, so I dont expect to blog regularly.

Hope everyone enjoys the old posts - Diorex

P.S. If anyone wants to help me spruce the layout up into something that does not look like dog meat, I would be appreciative - maybe a few links, some advise etc…

In the comments of my Affiliate Playbook post, I posted a link to SEO Blackhat’s list of 140 popular niches, by the looks of my outbound traffic, you guys were very intrigued by this.

Wanted to re-link to it for those who might not have seen it and follow-up with some comments about things to avoid or look for in a new niche.

Avoid -

Stuff to look for:

I am going to leave you with this thought, I have shared many times before. If you are picking a niche because you hear “so and so” is making a killing in it without regard for any of the above factors then you are setting yourself up for failure. You should be entering a niche because you have some sort of advantage or knowledge rather than because you are following the pack.

I am sure there are lots more things others can add to these lists based upon personal experience - feel free to share em.

Yahoo tries hard. So does the cheesy guy at the bar, does not mean either of them ever scores.

We recently ran the Yahoo Tune-Up that was available in one of our accounts. (SERoundtable talks a little about it here.)

This was a totally wasted effort, it was so off base that we just had a good laugh and moved on.

For instance:

This is obviously not ready for primetime and shows just how in touch Yahoo’s engineers, business managers and customer service people fail to even understand their own product.

Looking at GOOG stock after hours, it is once again at its all time highs of about $700 per share.

The metrics to me just do not make a ton of sense. It is trading at 54 times earnings and almost 20 times REVENUE, absolutely insane for a company thats growth curve has to slow and sooner rather than later.

Now I ask myself what major advertiser in this country or even the major economic countries is not yet advertising on Google. What company is going to come in and continue to push up CPC’s?

Absent continued quality score ‘adjustments’ how is this company going to drive further significant earning growth? Sure their is a little opportunity over seas that has not yet been exploited, but it is not like they have not yet launched in every major country. Some of its biggest spenders are financial and automotive companies that rely on availability of credit. These companies are in the midst of a huge mess and are probably not trying to figure out ways to raise their search engine exposure. A lot of major corporate spenders after years of too good to be true margins from search are starting to see that the CPC inflation has caught up ROI on search with other advertising mediums is starting to be more equalized. Throw in that search is a finite volume when compared to mass media or direct mail or even banner ads and that compunds the problem.

Google is trying to expand via acquisition, but more of them have turned into economics busts than revenue streams. Things like Grand Central, YouTube, Dodgeball, Orkut, Blogger and Dmarc just dont seem to be driving new revenue growth. Doubleclick is not looking like a sure bet to close. Yahoo and MSN are driving up the price of things like MySpace and Ask syndication deals, AOL is slowly crumbling, and publisher programs from YSM and MSN and Quigo are squeezing once lucrative Adsense margins.

They have failed to execute well on any of their offline initiatives, like radio, TV, print etc. Even so, the margins there are bound to be much much smaller than online revenues and thus the very attractive profit margins will not translate even if they can execute.

Google employees (the truly valuable ones who built the company) seem to be jumping ship on a regular basis leaving the company with a giant sucking sound at the top and middle layers of management and a whole lot of people who seem full of themselves just because they were employee number 7437 and are worth half a million in stock.

I am not saying this stock is not going to 800 or even 1000, much less sane things have happened in the stock market. I am just saying that the visible metrics and ancillary products don’t seem to be going at a pace to sustain the blistering growth that Wall Street expects.

As an ex-derivatives trader I know there are dozens of ways to short the stock while still limiting losses to the upside. The real trick is predicting the quarter when Google misses earning the first time and the air comes racing out of the bubble. I have not yet found the perfect trade, but I am thinking buying a near term out of the money call and combining that with a short of the stock. That way if I am right and it tumbles to $300-$400 range (a sensible valuation IMO) then I make out, but if it takes off or even stays relatively neutral, I am not risking significant amounts of money.

The actual trade will probably be significantly more complex like short a just out of the money call, then use that credit to buy 2 out of the money calls 50 or so points higher for even, plus sell the stock. LIke I said, I dont yet have the trade, but I am starting to look…

Hey, I have almost no friends on Xbox Live, because I never think to add cool people I play with as friends. Plus I suck so bad at most games that I never get asked to join any serious clans etc. Yet the most fun I ever have is playing co-op online with cool people.

I also like to see what games others are playing and what sucks. When I see a lot of people try a game and then get like 100 achievement points then move on to something else then that tells me it probably is not much fun.

So if you are an Xbox Live send me a friend request - Ill give ya one guess what my gamertag is.

Also post a comment here who you are so I know who is who.

Just some feedback on some recently played games….

Mass Effect - Hated it, starts slow as heck, I get stuck in the environment, saving is a pain, etc. All the reviews say get past the first few hours and it rocks… I am seriously having trouble doing that.

Guitar Hero 3 - I loved Guitar Hero 2, I bought it twice so me, my wife, and my au pair could play doubles. My 2 year old usually has one of these guitars in his hands when i come home hoping we can play - its great to play a game and have your kids right next to you playing along with an unplugged controller…GH3 lost me really early. It is a ton harder, I dont like the songs, the boss battles are stupid… I just gave up…

Call of Duty 4 - Loved it. great game. COD2 was pretty good, COD 3 I never even finished first scenario. COD 4 was awesome.

Rock Band - For all of the great reviews this has gotten, it stinks. The guitars buttons are sticky and end up screwing stuff up. The drums dont really work, you basically have to beat on them, I have tried to synchronize it to my TV and just cant get it to work. The play as a band feature is blah… It is a great idea, it is just not fun. I wish I had not opened the $180 box and instead had sold it for $500 on Ebay. Wonder what a used one would go for.

Anyway if you are on XboxLive add me to your friends.

Edit - Another reason to invite me to play and put up with my horrible skills is to pick my brain about what you are doing.

Gosh I get a variation of this question 2-3 times a week. Everything from what am I hiding to I must be making everything up to I am lots of different people… lots of strange theories.

Diorex is a totally made up word… (although it is an old brand of watch)

In my mind I pronounce it ‘Dee O Rex’ but it sounds really funny whenever I say it out loud.

It is not a latin word or any other languages but I guess since Rex means king a lot of people think it must mean something. Until recently, Google, Yahoo and a lot of people mistook it for the diet drug Diurex. I dont own the URL Diorex.com, but I would like to, but the guy parking it does not answer emails (I totally dont get that).

In fact Diorex is actually the made up word Xeroid spelled backwards. Xeroid was the name of a really old D&D character I made when I was a kid. I never really played D&D more than 2-3 times. I am guessing I was making a play on the brand Xerox, i really have no idea. A few years later when I started playing commodore 64 RPG’s I just ended up naming my character Xeroid. Naturally 10-15 years later when I started playing Ultima Online that was the name of my first character. When I screwed that up beyond belief and re-rolled I just reversed it and became Diorex - that character and ones in Asheron’s Call, Dark Age of Camelot, Everquest and World of Warcraft kind of stuck - heck I google myself (sounds kinky) a few nights back and read some old posts about me being accused of scamming some tradebot back in like 2002. The internet truly is an archive with a ton of data.

Of course when I started wanting an anonymous forum name, it seemed natural to use that as well. Then there is the fact that I very rarely have to come up with a unique username anywhere since almost nobody ever takes it (until now, I am sure some jerk will do it just for fun…). So when I opened a blog on a whim about a year ago, it only made sense for it to be as Diorex. I did not ever expect to have a few thousand page views a day or people questioning who I am. Heck it was probably even money I make it less than a week.

So who am I? Who do I work for? What verticals am I in? What is my Credit Score and Social Security number?

I don’t really care to share any of that. First off, the name of my company would totally give away our niche because our corporate website pretty much explains what we do… Same with my real name, I am on linkedin and other networking sites with my real name and my real position in my real company. I dont want to share my niche because we like making a lot of money without hundreds or thousands of people trying to compete with us. I often ask myself if Shoemoney would trade his notoriety for having ringtones be a lot less well known?

I am not blogging for notoriety. I actually started with the hope that I would just make a few good contacts, I have achieved that several times over, but no other expectations. I have totally stopped blogging at least twice. I go through phases where I update almost every day (like the last few weeks) and others where I dont even look at stats or comments for weeks at a time. In real life, I am a pretty shy guy who would never get up and share his opinions with hundreds of people, so this is very much out of character for me.

I don’t monetize this blog and have in fact turned down quite a few opportunities to do so, because I dont need the money and dont care to have to answer to people about what or why I blogged or did not blog something. I put in a few affiliate links on a few posts but have made less than $100 off of that, so I am not here for the money. I am just enjoying sharing my thoughts and as a result having some intelligent discussions with some of the people I have met as a result.

I know this is a totally dull post, but after maybe a dozen emails this month on this topic and about 30 search referrals with “Who is Diorex?” I figured I would answer the question as much as I am willing to do so. Plenty of people know my name and the niche we are in and I appreciate that they have respected my desire for privacy.

Sorry this was not as juicy or as informative as you probably would have liked, maybe next time I will try and post the Diorex Sex Tape or a picture of me with Elvis or something…