Danger Brown » What is affiliate marketing

It’s hard to believe, but this diatribe began as an e-mail reply to someone who asked me “What exactly do you do to make money on the internet?”

My response was this mini how-to step by step guide to affiliate marketing:

Because if I show you my exact websites and offers I am promoting today, and you could practically copy/paste my income while stealing market share/profit from me, I (and any other internet marketer) tend to be secretive about the exact thing I am doing.

But to be fairly specific, I am currently promoting Health and Beauty offers(products) available on the Hydra, Neverblue, and MarketHealth networks. These same exact or very similar offers are available at nearly any affiliate network. I use Google Adwords to get people to go to websites I own. Those websites are biased of course. The best product in the world is the one which pays me the most money. I have struggled a bit with the ethics of that, but have 4 children at home, a wife, a mortgage, and retired parents. Taking care of my family takes priority over feeling guilty because people will buy overpriced junk on the internet simply because I suggest it.

I use Google adwords to drive traffic. YSM (Yahoo Search Marketing) and MSN Adcenter combined will only provide 10% of the traffic you can get from Google. If you have a profitable campaign, you can expand it into other venues as part of an expansion strategy. But we will ignore them for the rest of this conversation.

Using adwords seems deceptively easy, but requires real skill to be successful. When promoting a CPA (cost per action) offer where 10,000 other affiliates are promoting the same thing, you are competing for the exact same keywords trying to sell the exact same product. You are also competing with people who have been doing it for 10 years and are happy to make 20% profit on high volume. You don’t have their skill, and you need more ROI (return on investment measured as a percentage) than they do.

You may not know yet how to make landing pages (mini websites) yet, but don’t take shortcuts. Google gives a quality score to your landing page in relation to the ads and keywords you use to promote it. If your keyword, ad, and landing page aren’t perfectly aligned in relevancy, and in compliance with Google’s best practices and terms of service you will have to pay more for the same click. If you are very far out of whack on this, you’ll be paying more than can be profitable when competing against the pros.

You can start with direct linking, but Google will only show one ad for a given URL per query. This means that all the other lazy affiliate wanna-bes in the world are competing for that one ad spot. Google will display the highest paying/highest CTR (click through rate) ad according to a formula. It’s tough to compete for that spot, so you are forced to go with long tail keywords (lower traffic uncommon searches) or play the bidding war game. Better to stick with the long tails, or only use direct linking to test an offer prior to building out a landing page. Keep in mind I’m talking about higher CPA offers (over $10.00). If you have a zip/email submit with no credit card required, I’d direct link, and build a separate campaign using content network only. If you want to direct link, you may also be well advised to try to find less popular offers which will have less competition.

In response to the question “What exactly do I do?”:

1. I talk to my AM, affiliate manager. I ask her/him to give me current stats for the best converting/highest EPC (earning per click) offers using PPC search to drive traffic.

2. I search Google for obvious keywords having to do with that offer. I look at the sponsored links only. I look at the types of landing pages that other affiliates are using. I pay more attention to the websites in the best ad positions, at least on the first page. Some websites will be irrelevant (Ebay, or whatever) ignore those. If it’s an affiliate, you will usually see his tracking links/redirects when you click through to his offer page. Look at the exact offers other affiliates have named as their #1 product. Look at the landing pages they are using. If they can afford the first page spots, they are making money. If you see similarities in their landing pages (you will) it is because those common elements are what is working today.

3. I build a mini website (landing page) which has similarities to the other successful affiliates operating in the space I want to be. This site has privacy policy, contact us, and terms and conditions/disclaimer pages. These extra pages are required to keep a decent quality score which will allow cheaper clicks for my traffic. It also has original text which may be similar to, but is different from my competition. Google will penalize you for duplicate content if you copy/paste.

4. My outbound affiliate links are redirected through Prosper202/Tracking202 running on my hosting account. This allows me to see more information than Google will share about the traffic I’m buying. Also, it allows cloaking if I want so my AM doesn’t know exactly how I’m making money. Your AM is your friend, but is also your competition’s friend. They can see exactly where all of your traffic comes from and you might not want that. Conversion tracking pixels are created in Google and e-mailed to my AM to place them on the offer’s site for me.

5. I build an adwords campaign starting with Google keywords. Then I write 10-15 ads for my website. I may steal ad copy from my competitors and paste it directly into about half of my ads. You can steal everything but the display url and destination url. Google will not penalize you for this in the vast majority of cases. There are rare cases where every ad on page 1 is identical and Google will crack down in that case. The rest of the ads, I’ll try to make as different as possible from each other. Some Upper Case, and some lower case. I try to think like a person who just searched for my #1 keyword. Are they lonely, fat, afraid of being ripped off? Are they old, young, male, female? If my target is a female, I’ll ask my wife to tell me what’s wrong with my ads. She’ll usually tell me to use an exclamation point! (Google only allows 1 exclamation point per ad)

Use completely different sales pitches in your ads. Generally, though line one is an attention getter, line 3 is a call to action (‘buy now’, or ‘find out more’ or ‘Get your free trial today!’). Use dynamic keyword insertion in some of your ads on every line including the display url. This is a test. If you can’t use dynamic keyword insertion because it doesn’t make sense, then your adgroup is too diverse. Put the ones that don’t make sense in a separate ad group(s) so that within each group, every keyword would make sense if you used dynamic keyword insertion in any of your ads. Ads should be set to ‘optimize’ to show better performing ads more often. Use negative keywords to prevent your ad from displaying when it won’t make money.

6. I start with a search only campaign, and will build a content campaign if the search campaign makes money. You can copy/paste it all with adwords editor, but need to write some new ads with better attention getters for content network. It’s a different thing to convert a searcher than it is to convert a surfer.

7. My adwords campaign will be set to exclude mobile (it defaults to include mobile) if my offer requires a credit card purchase. I also set it to display ads evenly over time until I know which times of day are profitable. Once conversion data by time of day is collected, I use accelerated delivery and advanced ad scheduling, or ad scheduling with conversion optimizer.

8. I monitor keyword quality scores and CTR’s immediately and every 1-2 hours on day 1. Less and less frequently as time passes. New campaigns need to be babied. Poor quality keywords should be deleted. Keywords with a CTR below 1% should be paused. Your ads and keywords are building account history at the same time, but with 10 ads, your keywords’ CTR’s are being dragged down by your underperforming ads at first. Once your best CTR ad is revealed, you may be able to turn some marginal CTR keywords back on. If they are below .5% CTR, I usually consider them dead and delete them. 1% is a ballpark defining point of success with a keyword, ad, adgroup, or campaign. It varies with the niche, but if you have lower than 1% CTR Google will be raising your minimum bids, giving your poorer positions and the impressions will stop coming. The campaign will die. If your CTR is above 1% your campaign will probably live and you can continue to optimize bids, scheduling, ads forever.

9. I observe whether or not Google search partners are profitable and turn it off if not.

10. With a maturing campaign, Google will be displaying 1 of your ads more than the rest based on CTR. You will want to choose the most profitable combination of highest CTR and highest converting. I often will try to combine features of my better CTR ads with my better converting ads. Eventually, you wind up with 1 ‘best’ ad. Then take that and do systematic split testing. Always have 2 ads running. Your ‘best’ ad and 1 which has only 1 small change from your best ad. At this point all crappy ads are paused. Leave them there if there is room so you can remember what didn’t work. Write a new ad where you change from caps to all lowercase, or just change one line to lowercase, or ad a question mark, or change one word to a synonim. Do this forever and review it after you have 100 click or enough data to seem definitive on the ‘new’ ad this week.

11. Read the e-mails from your affiliate manager. Sometimes offers are pulled, and you have to replace your offer with something similar. Sometimes they change policies on what traffic is allowed.

12. If you see an unexpected drop in conversions, look at the offer page to make sure it’s still there or they haven’t changed their prices or policies in a way that’s turning away customers. You may need to move on to another offer and be ready to do it fast. If you are on vacation, it’s OK to log in every day or two just to make sure that you are still making money. Pause any campaign that dove in the toilet until you get home and want to fix it. Lots of people are happy about their SEO skills, and if you’re good ad SEO, you can pay your mortgage. But if your good at paid advertising, you can pay off your mortgage.

Your comments are welcome!

I intend to make my blog more and more of a resource for affiliates and give free value with the goal that some will sign up for good hosting (about a $50-$125 commission) or one of my referral links. Many of you will get something (knowledge) for free, but that’s OK. There is always risk present where there is profit. The risk I take is empowering you to be my competition if you are not one of my referrals.

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