Being a fairly big fan of DKI (dynamic keyword insertion) in my ads I was faced with the small challenge of having all my keywords show up in lowercase in my ads. MSN has an article about this subject where after the first paragraph, they mention that the quick and easy solution is to upload your keyword lists in all caps. That’s where I stopped reading.

I’ve been working with some fairly large keyword lists. My latest campaign had 48,000 keywords. Needless to say, I didn’t feel like doing this by hand. Also, being a cheap bastard, I’d rather avoid paying for a solution. So I wound up trying a few free tools. The first two failed in one way or another. But Keyword Pad got the job done quickly and effectively. It’s free and I’m not getting paid to blog this. I just wanted a break from my other stuff and felt like blogging something.

The steps to follow are:
1. Import your keyword list.
2. Click “Modify” and select “First Letters to Uppercase” from the drop down menu.
3. Buy me a beer next time you see me.

One small issue is that within keyword phrases, you may prefer not to capitalize some words like “to” “in” “of” etc. This Thing Will Capitalize All Of The Words In Every Keyword Phrase. I didn’t bother with this secondary problem and decided to move on to other things. Got a better solution, great! Let us know in the comments.

Here is a screenshot:

Some of what I do is:

1 . Start with a high CTR by pausing low CTR keywords and possibly overbidding

2.  Start with many diverse ads (10-15) some of which use DKI and usually my winning ad has DKI. I will write my own ads first then I’ll look at my competition and borrow common elements and mix and match them. I might copy 1 or 2 ads from the competition, but not always. Only if I get brain fried and need a couple more in the mix. I’ve never used my competition’s ad as the winner. Note that the more ads you start with, the more money you have to lose on the campaign to start out with, but the more likely you are to strike gold.

3. After my winning ad has established it’s quality index of 4 to 5 bars I’ll start backing down my bid

4. I back the bid off by no more than $.02 at a time. In some niches I may be starting with a bid of $1.50 or more and back it off every 30 minutes until I have at least a break even or a profit. So I’m losing money generally for about 3 days to a week(building ad quality), then breaking even or slight profit for about 1-2 weeks(building keyword history), then backing off on my bid more to attain a sustainable profit. If I’m losing money with the campaign I’ll limit my daily spend to about $30-$50

Note that the most important factors are split testing many ads, and having lots of keywords.

Another thing is that if you lower the bid on a keyword often it kills the volume on that keyword. Even returning to the previous higher bid doesn’t fix it. So back them down slowly. Because I make more money on different days/hours of the week I’ll back the bid down so I’m still making money at the worst time of the day/week and then use the ‘Campaign settings’-'Ad Scheduling’ to boost my bid back up for the more profitable times of the week. This does seem to be an important factor in maintaining volume.

If you build a campaign and nothing is happening, go to ‘Campaigns’ – ‘Editorial status’. Your keywords and ads may be under review. These reviews are either very fast or may take up to 3 days in my experience. You may also be waiting for a review of your landing page without knowing it. To test this, I may set my daily spending limit to say $10 and raise my keyword bid to as high as $5. If you still aren’t getting impressions, it’s a review you’re waiting for.

Assuming you aren’t waiting on reviews, if you still aren’t getting impressions. Just bid more. I’ll raise my bid by $.10 every 30 minutes until I see impressions. Then I’ll leave it there until I get some clicks. Then I’ll start backing it off very slowly. Set your daily spending limit at the beginning to protect yourself against over spending.

There is a lot more to what I do, but I don’t want to bore you too much right now. I hope you find something helpful here. Never give up! Always be refining your campaigns/landing pages

May, 2009
Money spent:
Adwords                             $4516.16
Yahoo                                   $209.75
Total money spent $4725.91

Money earned:
Hydra network                 $6066.00
Neverblue                               $77.00
MarketHealth                         $50.00
Adsense                                   $190.94
Moreniche                                $15.00
Gross money earned         $6398.94

Net money earned              $1673.03

Some of that Adsense money is residual. But mostly I spent $81.03 to drive traffic to sites with a high CTR on Adsense ads. This is a remnant from before I started Affiliate marketing, so you could subtract those numbers if you cared to. I leave ‘em in because I’m feeding my family. To eliminate any confusion, I do not have Adsense on my affiliate landing pages. It is completely separate income. If you don’t count that income/expense the total is $1563.12 from affiliate marketing only.

These numbers come out to a 35.4% ROI. My profitable campaigns have done a little better than that, while my failures have lost money and hurt the overal ROI. I’d prefer to have my ROI at about 50%.

Further. Almost all my income is through Hydra right now. They put me on weekly payouts a few weeks ago, and that lets me quickly reinvest any money made through Hydra. Therefore most of my efforts are in that direction for cash flow reasons. If I get the money back in 10 days or so, I don’t care about ROI as much. With the weekly payouts, I could afford to spend $20K/mo easily. I just need more profitable campaigns to run.  Hydra is not the only network that will do this, but I was able to get approved by grossing over $1K/weekly.

In June I may be distracted a bit from the affilate marketing. A friend of mine and I are working on a new startup. Top secret until the launch. I expect to be telling you all about it in 2-3 weeks. Wish us luck! Don’t worry though, the startup will not stop me from my $10K/month goal. Feel free to follow my micro-updates on @dangerbrown on Twitter.

If you are a doubter, here is a big screenshot of my Hydra earnings.

My 1st month

My 3rd month

OK, here is where I stand. Unemployed and gotta feed my wife and 4 kids. Lost all income about 35 days ago, took a little while to get organized. Started my first campaign about 2 weeks ago.

Money spent:
Adwords                           $2329.82
Yahoo                                $58.35
Total money spent $2388.17

Money earned:
Hydra Network $2948.00
Neverblue $224.00
Adsense $79.70
Gross money earned $3251.70

Net earnings$863.53

I feel pretty good about this. I started a big campaign about 16 days ago, and another one about 8 days ago.  I know I’ve made improvements to these campaigns, and expect their profitability to increase over the next 30 days.  I have another campaign I’ll be starting in about 5-6 days.  Things are looking pretty good.

I’ve pretty much already hit my initial goal to survive without getting a job. If I don’t do anything, these two campaigns provide enough for us to scrape by. We can scrape by on $1700/mo but need about $2500/mo to feel comfortable.

One more moderately successful campaign will do the trick and I think I’m on to it. Wish me luck.

Mid range goal is to make $10K/mo profit by end of August.  I’m pretty confident I can do it. Follow my micro-updates @dangerbrown on Twitter.

See what happened during my 2nd month.

My secret:
OK, here is my dark little secret.  From August 2008 to March 2009 I have been making a living with Adsense arbitrage. I was driving traffic with adwords to loans and insurance related sites with adsense on them. I was able to double my money to the tune of about $1800/mo average. 

It was doomed:
My sites were within terms of service, had original articles, privacy policy, contact us, terms of service, exit links, etc., but were doomed. What I was doing was legal, and the way I did it was within Google’s terms of service. Although Google can’t make it against TOS without shooting themselves in the foot, they don’t really want people doing straight Adsense arbitrage. In the forums, nowadays, you’ll read that most people think Google arbitrage is impossible. It used to be super-easy. Unfortunately I wasn’t around for that. I started after most people had been put out of business forever.For the last few years, they have been making it more and more difficult to pull off. I’m actually pretty proud to have made an arbitrage living for 8 months.

Google Slap:
I knew they would slap my domains. A “slap” is a penalty received on a domain (landing page) which causes all your adwords keywords to show up as ‘poor quality’ and your minimum bids to be $5 to $10. Google doesn’t notify you when this happens. More about slaps later. I hoped it would be months or years down the road. But about March 10th, they slapped my lesser quality domain. Two weeks later they slapped my domain with better targetted adgroups. I was left with zero income, but I had one more Adsense direct deposit ($4418.60) due on April 26 or so. Oddly, March was a good month with $2500 profit.

Terror:
So here I am, unemployed with no income. All I have is a very strong set of adwords skills. And a reserve of about $4000 before I’ll have to get a job.  I came up with a plan. I’d held off on CPA marketing, because I didn’t want to change anything in my Adwords account for fear of upsetting my working system. Didn’t want to add conversion tracking, or analytics. Didn’t want to draw the attention of an account review. It was all fear based.  But I have a wife and 4 kids to take care of. You heard me right. 4 KIDS!!!! I gotta pay the bills.  Homelessness is not an option.

The plan:
I know that I could probably take my arbitrage to the next level. I have some good ideas about what kind of landing page would work today. But it would be temporary. Google will raise the bar again, and it will eventually be impossible. I need a longer term solution.  So I decided to do what I could with Adwords driven PPC/CPA affiliate marketing. The plan is to try to achieve a living before I have to get a job. Plan B is that if I have to get a job for a while, it will only be a stop-gap measure until my affiliate efforts produce a living.  I should mention that I haven’t had a job for 5 years. I used to be a 911 dispatcher.

The sub-plan:
If I have money in my budget to spend, I’ll be working on new campaigns. Which is why you haven’t seen much action here yet. But if my budget is maxed out, I’ll be working on promoting my blog with the ultimate plan of having many affiliates sign up through my referral links. The network (not you) pays me 2-5% of what you make. I only profit from your efforts if you succeed.  This can build a lifetime residual income.  I will be making a newsletter only sent to people signed up underneath me. In this newsletter, I’ll share information about my marketing techniques that I won’t share with anyone. For instance, I’ll share exactly what offers I”m promoting.  I’ll also work one on one with you for free. I will tell you things that no affiliate marketer would share with his competition.  I will teach you to fish.

The Good News:

Good news 1.
I made campaign 1 in the health and beauty category which is doing pretty well. It is only about 10 days old and I’ve spent $1488.83 and received $2246 in conversions through Hydra. So I’ve made $757.17 in profit on campaign 1.  My ROI (return on investment) will improve over time as account history is built up which provides information that can be acted upon.
Good news 2.
Due to taxes we paid in the first quarter of 2008 and having 4 kids, we got a tax return of $4378. Much better than expected. I always wait until April 15 to file to reduce chances of an audit. (Even though I don’t cheat on my taxes, an audit would be a big hassle.) We got our refund deposit on April 24, and now I’m spending it on Adwords.
Good news 3.
I built another campaign in the health and beauty category yesterday. I worked 18 hours almost solid. Just ask my wife. I built a new website and Adwords campaign to promote it. Turned it on at 1:30am. As of this moment, when I’d be happy to break even, I’ve spent $25.56 and it has $108 in conversions.

Why work 18 hours in one day?:
I pushed so hard yesterday because I knew if I got this running that any income made the last 3 days of this month would come back to me on about the 20th of May. So I can reinvest it again. If I spend money today, I get to spend it again in 3 weeks.

I’m not getting a job:
With my tax return I have about $5K to invest. I have two promising campaigns. Hydra owes me $2482 due in 3 weeks. It looks like I’m going to make it.  I haven’t had a job for 5 years. Swore I wouldn’t get one again. And I think I’m going to be able to keep that promise to myself and my wife. She likes having me home. We are very much in love and nearly inseperable.