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5 Things I Would Do If I Were Starting Affiliate Marketing Today
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How Much Could I Pay You to Quit Affiliate Marketing?
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The Scaling Fallacy: Life As An Affiliate Whack-a-Moler

5 Things I Would Do If I Were Starting Affiliate Marketing Today

“What would you do if you were starting from scratch in affiliate marketing today?”

This is one of those questions that pops up on forums, and lands in my inbox often.

It’s difficult to answer.

Mainly because it suggests we should be able to predict where our future money lies.

I don’t think there’s a single affiliate who doesn’t wish he broke in to the industry a year earlier. The ‘industry one year ago’ is a rosier place.

It always is, and always will be.

That’s because:

Successful strategies are only obvious in hindsight.

We feel pretty stupid when we miss them, but it’s a given that most of us will.

That’s why if I were starting affiliate marketing today, I would worry less about imminent opportunities — and more about the systems, processes and relationships required to take advantage of them.

Here are five tips to help you get started.

1. I would build a war chest of funds using my current skill set.

It is critical that you have a decent sized budget if you want to pursue paid traffic arbitrage.

Note: I have explained the core differences between free traffic vs. paid traffic in my updated intro for beginners.

Ideally you should be able to spend at least $100/day collecting data.

That’s not to say you should be losing $100/day.

Fuck me, if you’re spending $100/day and making $0/day — forget what anybody says about perseverance — pause that shit and get back to the drawing board.

Somewhere along the way, you’ve made a huge mistake.

Most people who land in this industry have key skills that can be used to build a war chest of funds.

Whether you are a writer, a designer, a developer, or a sales man — you can find work online.

These sites have thousands of jobs available:

Alternatively, you can get a conventional full or part time job.

Why are affiliates allergic to working 9-5? It makes no sense.

There is no shame in collecting a pay cheque from ‘The Man’.

If money is your primary restraint, I would say that it’s actually a pretty bloody smart idea.

2. I would invest in a good VPN and study my chosen market obsessively.

A Virtual Private Network (VPN) lets you access websites using an IP in a different country.

Why would you want to do this?

To spy on foreign ads and affiliate campaigns, of course.

There are no secrets in affiliate marketing.

Most profitable campaigns are running in full view of the public.

You can use spy tools like WhatRunsWhere to harvest banners and landing pages, but these are often lacking in context.

The best way to see which creatives are dominant is to load up a VPN, access a placement, and note which banners appear first (and most often).

For this, I use HideMyAss. It has servers in over 128 countries, is pretty reliable, and works on mobile phones.

Note: A monthly charge to ‘HideMyAss’ is definitely one of the more interesting expenses on my bank statements. Be prepared to explain to your accountant what ’Spy Software’ actually means, lest he fear your affiliate business is a racket for the Russians.

If you don’t want to shell out on a VPN, you can crawl the web at a snail’s pace by Googling ‘proxies in [country here]’ and trying them one-by-one.

Once you have access to dozens of countries, you can start gathering intelligence on any markets that are active with affiliates.

You can see exactly what offers are being run (without getting redirected), and you can jack all manner of useful creatives.

3. I would learn by osmosis — and gain access to key players.

If you want to find an affiliate mentor; somebody to hold your hand, to teach you the ropes; then my best advice is this:

Snap off your dick, book in some surgery, reinvent yourself as a beautiful woman — and hope for the best.

For everybody else, I wish the very best of British to you.

I don’t believe mentor arrangements work unless they are mutually beneficial.

That means you need to bring useful skills to the table (available for free), or a knack for honeybadgering freebies, the likes of which is beyond the scope of this blog.

Here’s the sad truth:

Inside information is at a premium for newbie affiliates.

The guys who need the attention of their AMs (Affiliate Managers) are often the guys who the AM has little incentive to work with.

Your affiliate manager could be handling dozens, even hundreds, of accounts.

Imagine a Skype wall with “Hey, how are u?” repeated ad infinitum.

Their attention goes, firstly, to the volume players who already generate good revenue.

Forget the Pareto Principle. We’re talking 95/5 laws of revenue distribution here.

With that said, you will need to come up with some novel ways of extracting information from key industry figures:

  • Your affiliate managers
  • Traffic source reps
  • Your direct competition

Now, if I were starting my career today, I would be mind-mapping the chains of power that bind the industry together — and then finding ways to break in to them.

The one playground that is fair game for seducing all three parties above is the conference circuit.

Once you know who you need to target in your market of choice, research where (and how) to access them.

This is where you need to position yourself favourably:

Affiliate managers… respond well to the illusion of an already successful affiliate. Pretend you are running traffic elsewhere.

Traffic source reps… respond well to the idea that you are not actually an affiliate. Pretend you run a ‘performance marketing agency’.

Your competition… responds well to legitimate information, or flattery. No pretending here. Suck up or cough up.

I’ve met a bunch of newbie affiliates at events this year.

While I don’t know how their businesses have progressed since, I know for sure that they made the right decision in going to events where they’d network with legitimate affiliate marketers.

This form of learning by osmosis — for newbies and veterans alike — is vital for picking up signals about where the industry is heading.

Good places to start include Affiliate Summit, AdTech, and whatever annual meetup your network of choice is currently pimping.

4. I would focus on out-working the competition.

How do you build a competitive advantage when your competitors are richer, more experienced and better connected than you?

The answer is by starting small, keeping lean and making moves that — for whatever reason — your competitors won’t.

Stay under the radar and out-work the competition.

The best way to do this is to corner a small segment of a market that you already know to be profitable.

The German dating market is profitable. It’s also fiercely competitive.

A newbie entering these waters is going to be swallowed up by one of the many great white sharks, AKA your direct competition.

So you start in shallow waters. You ask questions about the huge German dating market and you segment it in to smaller chunks.

There are many ways you can do this: from age, to cities, to needs, to marital profiling, to disabilities, to shared hobbies.

The dating market is a great example because it serves a universal need (to find a companion) with endless smaller pockets of demographics that can be targeted.

What you will find is that your biggest competitors are drunk on their economies of scale. They won’t bother to devise campaigns for the smaller traffic sources, or the minority demographics. If they do, it will be an afterthought.

This leaves the path clear for a newbie affiliate to sweep in and serve those demographics with a message that strikes closer to home.

While a small budget demands that you out-work the competition, take note: this is not a scalable advantage once you enter the mass markets.

To be a dominant affiliate in the big-money open waters, you need to build structural advantages in to your business.

By definition, an effective advantage must not be easy for a newbie affiliate to replicate. I’ve referenced some of the more popular strategies here.

Of course, it’s a double edged sword.

Dominant affiliates rely on structural advantages to stay profitable. In doing so, they sacrifice an element of creative desperation.

Dave Trott covers the topic well with this excellent piece on Revolution vs. Maintenance.

5. I would choose a low CPA/CPI niche

There are two benefits to working with low payout offers.

The first is that they are easier to optimise.

If an offer pays out $2, you can make a decision on its viability with relatively little ad spend.

$20 spent and no conversions? Time to pivot.

The second reason is that for a newbie, breaking the pattern of zero conversions is important.

You want proof that affiliate marketing works?

You’ll get it faster by pushing offers that don’t require a large payment from the consumer — in other words, offers that don’t require a hard-sell.

This proof can morph in to motivation, which can snowball in to self-belief and more patience in the long run.

It’s easier to stay motivated while the conversion column is moving (and the data is taking on some meaning).

The good news is that there are tons of offers in emerging markets where conversions are rampant and the cost of traffic is cheap.

The Middle East and South Asia are prime examples. LATAM is another exciting growth area.

By focusing on these regions, you can get some conversions under your belt. You can learn how each traffic source works without selling off your left kidney to pay for the advertising.

The faster you get away from theory and in to the realms of collecting data, the sooner you can call yourself an affiliate.

To be blunt:

These are the five things I would do if I was starting affiliate marketing today:

  1. Build a testing budget where I can spend at least $100/day.
  2. Invest in a VPN and analyse the top-bidding affiliates in each country.
  3. Build key relationships with affiliate managers, traffic source reps and direct competitors.
  4. Search for under-served segments in profitable markets.
  5. Stick to low-paying offers and gather data fast.

What are you currently doing?

Have I missed something that can light a rocket up the arse and catapult newbies to success?

Interested to hear.

How Much Could I Pay You to Quit Affiliate Marketing?

There was an interesting poll up on the STM Forum this week:

What guaranteed monthly salary would you accept to quit affiliate marketing for a job in the corporate world?

Monthly affiliate salary

Just under 50% of the affiliates who replied said you’d have to pay them at least $500K per year to quit affiliate marketing.

That’s pretty remarkable.

Anybody who works in affiliate marketing knows that there’s no such thing as a fixed income.

To turn down a guaranteed bounty of $500K per year — plus a lifetime free of the aeons of stress-fuelled hair shredding — says a lot about the passion of those who turn to our industry.

Admittedly, yes, the figures are likely inflated by a sense of bravado and outward ‘who-can-grind-the-hardest’.

There’s a funny line that if you ask a man how many women he’s slept with, and then divide his response by three, you’ll be somewhat closer to the real answer.

Perhaps we can say the same for the price on an affiliate marketer’s head.

Regardless…

This poll, if even remotely close to the truth, reveals two stark realities:

1. Your competition is ruthlessly committed.
2. Affiliate marketing is more than just a business. It’s a lifestyle choice.

The Ruthless Competition

If somebody is willing to turn down a guaranteed income of $500K per year, what does that tell you about their affiliate business?

It says, either, “Hi, I’m insanely rich and 500K means nothing to me.”

Or, “I’m completely committed to making this work, to the point where not even half a million dollars is going to sway me.”

Whatever the case, this is your competition.

And that should be a call to arms.

These are the people, the pooled ruthless mindset, that you have to compete with.

Is it any wonder that the industry is so tough for a newcomer to crack?

A Lifestyle Choice

One of the things that struck me while reading the responses to the STM poll was just how many users had already given up six-figure corporate jobs in favour of affiliate marketing.

When you see a poll like this, your first thought is cynical:

“Somebody who already earns his millions in a glass-laden corner office probably isn’t going to be exchanging the view for affiliate marketing anytime soon.”

Except, that wasn’t the case.

I regularly speak to successful pros from all walks; from the finance arena, to the weary battle-hardened in law (the irony), and to unsatisfied executives.

It’s widely accepted that beyond a certain point, your salary ceases to add enjoyment to your life.

Once the basics are covered, and luxuries enjoyed, an extra 100K or 500K is pretty much irrelevant.

Time and burnout become the chief nemesis of happiness. Along with the political games that are so entwined with the corporate world.

And that’s why, for many people, affiliate marketing is not just a career. It’s a symbolic lifestyle choice.

Once you have enough money, you start looking inward at the value of your time.

Want to know the reason why so many affiliates put such high prices on their head?

Because they have something that people stuck in high-paying corporate jobs so desperately want:

  • The freedom of time
  • Self-determination

Once you have it, you don’t want to give it up.

This stubborn defiance to conform, even under the carrot of a fixed 500K salary, is what drives affiliates to be the best damn marketers in the business.

It’s the reason why corporations have to pay extreme money to attract us.

And if you want to carve your own career in affiliate marketing, this needs to be considered.

There simply isn’t room for the half-arsed.

The Price on My Head

Would I accept a fixed salary to quit affiliate marketing?

Are you shitting me?

Yes, of course I bloody would.

In a strange paradox, it’s exactly what I strive to achieve every single day.

But there’s a very big difference between working for any corporation, and working for one built in your own image through your own blood, sweat and beers.

For all the successful affiliates I’ve met, I can count on one hand those who wanted to stay middlemen in this same industry forever.

(And even then, I’m pretty sure half of them were rat-arse plastered at the time.)

We all have escape plans.

Affiliate marketing, the career choice, is 100% expendable in my eyes.

And yet the lifestyle and opportunity it represents comes at a huge price.

Is a 500K salary enough to fund that exchange?

To say there’s a yes or no answer would be to undersell the very Machiavellian nature of our industry.

To illustrate, I put this question to a friend of mine (who happens to be a newbie affiliate) and here’s what he said:

Guess I’d take the job. Hustle for a year. Demand a pay raise. I’d keep tabs on any useful data they had, any interesting connections. Try take on a few juniors to get some solo work done on the side. After 3 years, I’d leave with two Mil in the bank and blow up my own dick boost pills, or whatever’s flying at the time. Maybe Ebola. Fuck, when can I start?

And that, my dear scumbags, is why affiliates are not grown.

We are born rancid.

The Scaling Fallacy: Life As An Affiliate Whack-a-Moler

Jack creates 10 campaigns in 10 countries on TrafficJunky:

Here are his morning stats:

Germany: +$45
France: +$10
Switzerland: -$5
Netherlands: +$20
United Kingdom: +$12
Australia: +$25
Canada: -$21
Belgium: +$42
Turkey: +$20
Sweden: -$10

JACK’S TOTAL PROFIT: $138

Bill creates 1 campaign in 1 country on TrafficJunky.

Germany: +$90

BILL’S TOTAL PROFIT: $90

Which affiliate would you rather be?

Come on, it’s a no-brainer.

Bill is in a much better position.

Let’s look at what each affiliate has to do in the morning:

Jack has to:

  • Check stats for 10 different campaigns.
  • Optimise creatives in 6 different languages.
  • Search for the best offers in 10 different countries.
  • Manage bids against hundreds of competitors.
  • Put out fires all day before he can work on any new campaigns.

Bill has to:

  • Check stats for 1 campaign.
  • Optimise creatives in a single language.
  • Track the best offer in a single geo.
  • Manage bids against a handful of strong competitors, and many more weak, distracted competitors (like Jack).
  • Find new sources to test his campaign.

Now imagine the two affiliates hear about an amazing new traffic source. We’ll call it Exoclick for the lols.

They both want to scale their campaigns to it.

Bill, having much more time on his hands, goes first.

He knows Germany inside out. He knows what works. Scaling is merely a case of busting open Voluum, tapping Duplicate, and changing the tokens:

His stats now look like this:

TrafficJunky

Germany: +$112

Exoclick

Germany: +$42

BILL’S TOTAL PROFIT: $154

Jack, on the other hand, is starting to sweat.

He can no longer make sense of his stats without spending 40 minutes staring at Excel.

He has 20 campaigns in 10 countries on 2 traffic sources.

And his stats look like this:

TrafficJunky

Germany: +$23
France: -$7
Switzerland: -$25
Netherlands: +$27
United Kingdom: +$3
Australia: -$14
Canada: -$28
Belgium: +$12
Turkey: +$25
Sweden: -$5

Exoclick

Germany: +$75
France: +$2
Switzerland: -$17
Netherlands: +$5
United Kingdom: -$88
Australia: +$20
Canada: +$10
Belgium: -$25
Turkey: +$13
Sweden: -$4

JACK’S TOTAL PROFIT: $2

Aw, shit.

Jack can only manage so many campaigns effectively.

Even then, it only takes one rogue offer (in this case, the UK) to wipe out his progress in the other markets.

Jack, like many affiliates, has chosen to stack the deck in somebody else’s favour. He needs everything to go right, or his model is inefficient.

Let me tell you:

In affiliate marketing, fucking rarely does something ever go right — let alone all of it.

Why is that?

Every market requires a complex understanding of conversion rates, clickthrough rates, and the dozens of metrics that wreak havoc on them. Even this may prove irrelevant if you fail to catch hot offers early on their upswing.

So how are you going to manage the above, MULTIPLIED BY TEN, when your attention is DIVIDED BY TEN? (Plus porn.)

There’s a pretty simple solution.

Look at what happens if Jack only runs campaigns in one country — Germany*.

The stats completely change.

His profits would be $98.
(And his ad spend considerably lower.)
*This is an example, not an endorsement for advertising in Germany.

The stats improve, but that is purely superficial. What we should really be interested in is what gives us the best chance of success and true ‘scaling’ going forward.

It’s the revitalising effect of removing so much deadwood that has the real impact.

Perhaps Jack’s morning to-do list would start to look more appealing.

No more staring glumly at the ‘Monday Headbanger’ with rows of campaigns disintegrating in puffs of smoke.

His blood pressure would drop, his sense of direction might return.

More of his working hours would be spent looking for opportunity rather than putting out fires day after day, every day, until there’s nothing left to save.

This is the price an affiliate pays for spreading himself too thin.

* * *

Volume is sacred in this industry.

It goes against instinct to start culling campaigns — especially those that are profitable — and it isn’t made any easier by the pines of your affiliate manager (“Revenue, revenue, revenue!”).

But remember: volume is irrelevant if it’s fractured across 20 offers in 10 countries.

You can’t leverage the sheer number of your campaigns. It’s your dominance in each individual market that counts.

On the flip side, achieving dominance in a single market is easier when you don’t have a desktop scattered with half-finished landing pages for every single nation in the EU.

Attacking a single country with brute force and finding something that works?

Now that is a scalable business plan.

Pussy-slapping 15 nations in to converting at a 10% ROI then screaming like a banshee as you realise Nation 16 lost the entire fucking lot with one dead offer?

Not so scalable, mon ami.

* * *

The lesson?

1. Spreading yourself too thin will cannibalise any profits you might have made.

2. Spreading yourself too thin will prevent you from scaling the campaigns that are actually worth scaling.

There is a balance, of course.

You do want to explore new markets. I can’t emphasise that enough.

Without exploring, you won’t find any profits period.

Newbie American affiliates who refuse to exit their home market are probably familiar with consistent big fat zeros. That’s because domestic arbitrage… is a bitch. There’s a long line of capitalist pigs that got to the table before you.

If you are going to flee in to foreign markets, any experiment should be carried out with a degree of control.

Foreign campaigns should be planned, not ripped with reckless abandon.

Do some calculations on the required CTR/CVR metrics before you even start.

(You’ll know if you’ve planned a campaign — you won’t have French translations in one tab, German in another, and a Turkey flag occupying Photoshop.)

You shouldn’t hesitate to scrap these campaigns if the profit achieved is barely worth a pot to piss in.

So you find a country somewhere close to the Russian border that produces a steady $10/profit per day.

Should you pursue it?

Should you fuck.

Maintaining a $10/day campaign is like pulling down your pants, cracking open your skull, and taking a hearty dump on the sacred membranes.

A complete waste of mental resources.

The only possible reason to focus on these campaigns is if you don’t have the capital to compete elsewhere.

And in that case, your objective should be to raze the marketplace, pillage whatever you can, then move on to richer pastures.

* * *

My advice:

(Yes, there is some here. Eventually. I put it at the end to confuse the undeserving bastards who didn’t make it this far.)

1. Pick a very small number of countries to operate it.

2. Ensure those countries have the same language so you can recycle creatives.

3. Kill any campaign that requires time to manage but can’t satisfy your income objectives — regardless of profitability.

4. Don’t scale at all until your existing campaigns have settled from peak ‘just-been-launched’ performance in to stable, reliable numbers. (Or you’ll be left with an empire of sand castles.)

5. Understand and respect the one metric that Voluum/CPVLab can’t calculate: opportunity cost.

Whatever you work on today, it comes at a price.

Copyright © 2014.