I’m going to try my hand at affiliate marketing with the bit of free time I have over the holidays. It all started while reading Jeremiah Owyang’s blog on August 4th, in which he mentioned John Chow’s blog monetization strategy and contrasted it with a softer sell. It gave me some nice ideas for my blog revamp, and then on John Chow’s blog I saw an article published on November 3rd about Jonathan Volk. This got me thinking about the affiliate marketing space.
I have to admit I didn’t know what a “Squeeze page” was until just a few months ago when I asked a group of friends where the hell people learned that a 3-mile-long webpage that looks built in 1996 is a way to sell anything. Nobody knew but eventually I found out what it was called.
The Affiliate Marketer Pyramid
First I took a look at what affiliates do and the first obvious realization is that there’s a 1:many pyramid in here. Many affiliates multiply the effort of fewer merchants, which in turn feed the wheels of affiliate networks. Usually the place to be is as high in the machine as you can get. Clearly I can’t jump into owning an affiliate network when I’m clueless and connection-less into that space.
Technically, I could jump into the publisher/merchant space. I have put together all the needed elements for other projects in the recent past. I am knowledgeable on a rather large yet still obscure niche where I actually have a nice site that sells on eBay and just recently through Adwords, generating about 2K yr. This is really peanuts, but it’s nice that I can use it now to finance this experiment. I feel if I jumped on the publisher space, the chance of flopping and never knowing why is large and I can’t afford the time to have a string of flops in hopes of landing some wheels on the ground; You can’t learn (or profit for that matter) unless you have something to tweak, modify and evolve. That something should be at least mildly successful to be a meaningful starting point. There’s no tuning of the segmentation, the targeting, the price point, the venue, the value prop or anything when you’re operating in a vacuum – There’s no way to figure out which path works, and which path doesn’t work according to your key metrics when your metrics are simply all zeroes – all paths are equal and the distance to “success” is impossible to quantify – it’s like awakening in the middle of the desert on a cloudy day, naked and hungry. I sort of did that a couple of years back with PlayVault.com and while I did learn a tremendous deal, I lost big time really-really-really-really big on several fronts.
The need to evolve whatever I do into the publisher space seems obvious, but it’s also not-so-common since I don’t see it plastered all over – I mostly see “make money as an affiliate” touted everywhere. Maybe its because the entry costs are significantly lower. Its seems obvious that owning a converting product can be just as good as having a converting offer to promote – but in the long run being the publisher should beat being an affiliate hands-down. You get a chance to develop a relationship with your customers and move from transactional to relationship selling, you get to build synergies across a range of offers, you can help and profit from the same customer more than once, increasing their Lifetime Value while maintaining the acquisition cost relatively steady, – no-brainer. The factor that would propel me the most, however, is speed and stability.
I can tell from a distance that “where the rubber meets the road” is at the individual affiliate marketer level, and there is a huge amount of friction and inefficiencies there – things move fast and whatever worked today from an ROI perspective is guaranteed not to work three months from now: Google slaps, Social Media mergers, rules changes, customers attitude changes, search engine algorithms, advertising techniques – it’s a machinery with literally thousands of moving parts and each and every one of them offers a unique contact point. It’s very hard to scale anything when you have to deal directly with that level of complexity – you need an abstraction layer so you can drive the ship, instead of greasing the wheels… If you’re too busy in the engine room, tending to each and every sprocket in there, then who’s driving and dodging the icebergs?
This abstraction layer can be internal – a structure of people to manage the process, or the other attractive model: Externally outsourced on a pay-for-performance basis. Affiliate marketers, in other words. I’m simplifying things a lot, and clearly being a product publisher is no piece of cake either – they have a mixed model of B2B and B2C, potentially higher fixed costs, and much higher development costs – take a look at this UberAffiliate post on the matter. Still, it’s helpful to understand where to aim your ship when you’re about to set sail – even if it’s just an experiment.
See my problem? I go off on tangents! Back to the first step: Affiliate marketing. I don’t have a whole lot of time so it’s going to be critical that I power though my Dark Side Traits – especially the excitability which can derail me long enough to squander all my time. I’ve also noticed I sometimes over-analyze (hello, long post!) – to my own detriment. So my goal for the next two weeks will be to SPEND over $1.5K in this experiment – If I don’t manage to spend it, I will donate whatever is left to ACCION International, so someone else in need can put it to work for them (full disclosure: I have no financial ties to ACCION, but someone I know well works there). That and a public posting like this gives me some leverage on myself to overcome risk-aversion and maybe the excitability part. The way I see this: I’m spending $1.5K on hands-on marketing education – weather it turns out that I do something cool in the affiliate space or not, I walk away with $1.5K of learning on both marketing online as well as managing myself. Can’t beat that last one.
I’m going to divide my budget so I don’t mess it up: 20% to training, 30% to tools and outsourcing whatever I may need to get going and 50% to running live campaigns. I may change this allocation as I go, but it’s a good idea to have thresholds which when crossed cause you to re-examine what you’re doing.
I’m starting off with a bit of training already on my drive and some tools:
- PPC Bully – Got a subscription to the premium PPC Bully package – I subscribed about a month ago – Jumped the gun a bit there (again, that ‘excitability’ problem), but it actually helped me tune a site’s ads. Still, I’m wondering why the heck their interface looks so much like KeywordSpy. This also gave me quite a bit (about 30 hours!) in training materials and a couple of additional pieces of software, including Traffic Travis and Content Bully
- Affilorama AffiloBlueprint 2.0 “summary” I guess
- Up-and-running Adwords and clickbank accounts
- Access to the War Room at Warriorforum.com
- Some other stuff… Not sure how relevant it will be.
I’m well aware I can fall into the trap of reading too much on the Warrior Forum, or too many eBooks and trainings – this is especially true since I get easily excited! (see above) – Hence why I’m setting the money to go away whether I use it or not and, I’m going to lock-down my learning to balance “academic” style learning with experience. Yes, I already have an MBA focused on Marketing – So you might wonder why I need to be reading some more – Simply put, the MBA prepares you in business and marketing all around – not into specific areas, and we never touched online affiliate marketing. Sure, I’ve got plenty of wacky ideas to bring to the table and some nice background, but actually performing as ‘ship engineer’ in a highly competitive field requires some specialized knowledge and experience – hence the learning here. I’m hoping to devote about 30% of my time to learning, 10% to blogging and tooling and 50% to experimenting. I’m going to sprint though the material I have on hand – namely the AffiloBlueprint thing I’ve got here, the PPC bully courses and then check out the KeywordSpy videos I saw on their website. There’s tons of other stuff that looks interesting – like MarketSamurai and SpyFu, and a ton of other little eBooks, but I’ve got to focus. So here we go! I’m hoping I have enough time to provide good updates along these two weeks.
