AMA: Affiliate Marketing

[lludwig]

Since I just sold my business for 7 figures (Investor Junkie) that was affiliate marketing based, I would consider myself an expert on the subject.

Ask me anything about the subject.

 

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[Fotis]

Start an AMA thread and then disappear???

The Fastlane forum is not reddit. People here are actually busy with life. Plus, the questions in the first post would discourage him from answering.

 

[lludwig]

This won't be a popular question, but it's one I've mulled over in my head, and I'd be curious to get your perspective. Do you believe affiliate marketing to be ethical?

You are really asking a larger question. Is capitalism ethical??

I see this with lots of entrepreneurs and especially Millenials. I can say without question you need to figure this out in your head ASAP. Otherwise, IMHO you'll never be successful. You have mixed emotions and need this sorted out.

Yes I believe capitalism and affiliate marketing are ethical. Otherwise, I wouldn't have created my site.

If you are thinking this, how is it not ethical?

You aren't forcing anyone to purchase a product. No one puts a gun to someone else's head to force the purchase. That being said first and foremost you should believe in the products/services you are recommending. If you believe the product is shit and you are recommending it, then it's going against your own morals. If you are misrepresenting the product, again you are going against your own morals.

The value you are adding with affiliate marketing is telling others about a product/service that may not been aware of previously to meet their need. This can be executed in all sorts of ways. On Investor Junkie we had reviews, comparisons between products, promotions, educational articles that then referenced tools to use, and lastly recommended services. All of this added value to the reader and in return we got paid because they signed up to one of the services listed.

My goal was to have EVERY service listed on our site to be in an affiliate relationship. We were pretty close (around 90%). Unfortunately some of the services we liked the most didn't offer any affiliate program (ie Vanguard, Fidelity, and Charles Schwab), but still reviewed and listed them on our site.

Believe it or not, there are services we've given poor ratings and serious negative issues and you know what, people still signed up. We were honest about the service in our review, stated the negative issues about the product yet people still joined. I obviously won't recommend a firm that is committing fraud (in fact don't even review them), but if a service adds some value to the user who are we to say otherwise? Obviously, they aren't on our recommended list.

I could never get into the head of the reader, what their needs are, and what makes them purchase. What you might dislike, someone else might get value from.

If you want to follow FTC guidelines (which you legally should), disclose that your links on the page are affiliate links at the top of a page. I've found from my research, most ignore the disclaimer and don't read it anyways.

Affiliate marketing certainly can be done unethically. I've seen it done, but only because of the way it was executed, not affiliate marketing itself. Any business for that matter can be run unethically. Tesla comes to mind from another thread.

 

[lludwig]

Thank you so much for you time btw.

What 3 products or services were most crucial to your success?

• ClickMeter
• Ahrefs
• Hotjar/Crazy Egg

 

[lludwig]

I was wondering if you could share some experience with how the affiliate sales were tracked. More specifically, were you (your merchants) using in-house software or 3rd party services (like CJ, Shareasale)? What were the biggest challenges and what could be improved there?

Depends upon the vendor. Some were using 3rd party services, some inhouse, some relied on our service we were using (Clickmeter) to track conversions.

The biggest issue IMHO is trackback for any conversions. With the hundreds of affiliates we were managing I wanted a central place to track all of these conversions and get real-time to near real-time conversion info. Plus wanted to push this info around to other systems to use this data as well.

We were slowly getting vendors on board with this and the biggest services (ie CJ, Impact, etc..) have it available already. The inhouse ones we would have to ask for them to install a pixel so it would fire when the order was completed. This wasn't ideal since many CPA wasn't based upon a traditional "order" like when you buy a physical product. Server-to-server trackback IMHO is the best method than relying on a pixel.

We had a tracking system that is second to none. I can't go into the specifics but can say we were able to track all conversions and the source (ie organic SEO, paid ads, social media, email, push notifications, etc) and show the history of each individual through a funnel. We are able to track individuals through the various touch points listed.

We were slowly using this info to better understand what made individuals convert for specific services compared to ones who didn't. Plus gave us info on perhaps interest in converting for other complementary services after. Also IMHO this is critical for any paid ads, otherwise you are shooting in the dark.

In general, affiliate tracking is horrible for most sites and needs much improvement. Most get a monthly report of the conversions without any tie into the source of the conversion and where on the site they converted. This is BAD!!

Affiliate marketing should be treated no differently than if they were your own products/services. IMHO what is important in affiliate marketing isn't the amount of conversions but the quality of them. Meaning in specifically my space what was important is making sure the visitor found the best service that fit their needs than just going for the conversion.

In the end with affiliate marketing, you want both the customer (your visitor and the vendors new customer) and the vendor to be both happy in the transaction. If you are recommending or listing a service which isn't the right fit for the customer this doesn't help the customer or the vendor.

The value add with affiliate marketing is using your brand to instill trust and helping the visitor find a service to fill their need. What matters is where in the sales funnel is that visitor. Someone who has an issue but doesn't know the solution is at a different stage of that sales funnel, than an indvidual who wants a promotion code for that vendor.

 

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[lludwig]

Hey lludwigg, what in your opinion is the best way to get started in Affiliate Marketing?

Follow the Nike motto "Just Do It".

 

[lludwig]

What were the biggest challenges and what could be improved there?

Oh the other biggest challenge with affiliate marketing is your brand becomes part of their sales funnel.

Meaning if their landing page sucks and you get paid per CPA, then you'll won't make much money off of their service.

It could be the best product in the world and perfect fit for your audience, but if their landing page and onboarding stinks you won't get much for it.

I saw countless vendors take on affiliate marketing as their new channel not understanding a lick of how it worked and expected miracles in their sales. Affiliate marketing typically doesn't work that way.

I've seen so many classic marketing mistakes, like sending the visitor to the home page with no specific call to action. Just dumb marketing 101 errors.

They would get poor results and ask why? Only to close up the affiliate channel a few months later because of lack of sales. In many cases it was issues after the visitor left our site that was a problem. The vendor didn't take our suggestions on how to improve conversions.

The vendors must realize that once the lead leaves the affiliate, the ball is in your court. It's up to you to get that customer to convert. Slight improvements in a sales funnel can yield great returns for little effort.

 

[lludwig]

When starting out how did you tackle promotion? Did you bother with backlinks/guest posting etc or did you take a different approach to getting your content viewed?

When I started getting guest posts on other sites was easy. Today I wouldn't recommend wasting your time trying to get guest posts.

I would first work on building great content and content that has a unique angle and then shop around to the various news, and fellow bloggers to see if they have any interest in interviewing you on that topic. From that you typically get a backlink or mention on their site. Also just by building great content, it tends to get backlinks naturally.

 

[lludwig]

I'd like to know how OP managed to sell his business for 7 figures. Can you do that with any niche? Like even promoting ClickBank products ? I guess you'd need a real website built around your niche i.e with useful content, e-mail capture & sales funnel ??

No you can't do it with any niche. I purposely picked personal finance because I not only had an interest in it but also knew had high payouts. That's NOT saying you should start in a sector like personal finance for that reason only. There are only sectors as well like fitness/supplements, small business to name a few.

I wouldn't touch most Clickbank products, the payouts are very low for shit products that have no brand equity. I would only do Clickbank products to test my own products/services to sell to see if there's a market for it. I might use Clickbank for my own products/services though.

With my specific site, I didn't find email marketing as effective compared to other niches (ie entrepreneur sites) where the audience is much more engaged.

I also know of others who do a form of arbitrage, and just create landing pages for an affiliate service and bounce from one niche to another. I personally not a fan of this and IMHO gets into the scammy part of affiliate marketing. I would rather create my own brand and build off of it.

 

[lludwig]

I laughed so hard. It's just a bit of humour relax guys.

Thanks for doing the AMA would you recommend affiliate market for a business just starting as one of many avenues to generate revenue?

What is the best way to get affiliate marketers on board, do they only consider products with high selling margins?

Yea I get the joke, but I'm not going to waste my time either.

At a minimum, I would use affiliate marketing to supplement an existing business. No matter what business you are in there are products/services that complement your business but you don't have the time/expertise to do it yourself. Affiliate marketing can help assist in generating revenue for your captive audience.

Take web hosting (my previous business). I had affiliate relationships with a domain registrar, SSL provider, and email newsletter service providers. I could (and should have actually) linked up with other affiliates such as Inc. companies (ie LegalZoom) and logo designers (ie 99designs). These services are typically needed after creating a domain name.

The ideas are endless. You have an audience who trusts you but nowhere near maximizing your revenue potential.

 

[lludwig]

Sorry I probably explained that poorly.

Let's say I'm selling a product for $20 and I want to get affiliate marketers on board, why would they waste there time pushing my product for $20 when they can push someone else's products for $100 and get better commision. Will this be an issue for me.

IMHO you aren't asking the right question. It depends upon the LTV (LifeTime Value) of this newly acquired customer.

Let's say the LTV is $100 from other products/services you sell but this intro $20 is the lead into your sales funnel. Then you could give $20 per lead or even hell give $50 and still make money on this affiliate program.

It could be a loss leader for this one product, where you make more money higher up your sales funnel.

By itself a $20 product, yea it would be a hard sell IMHO to entice affiliate marketers to join your say $2 CPA because of the low payout.

 

[lludwig]

If you were starting your journey today, would you still choose the path of Affiliate Marketing?

Yes without question, but it does count against one thing MJ talks about is control. Understand you don't control the product and that affiliate revenue can be cut partially or completely at any time. The other lack of control is with SEO. Since you typically can't buy the vendors brand name keywords, you have to rely on organic SEO to get you there if you are doing say reviews.

I would supplement revenue via my own products/services, then the only way to generate revenue like I did.

 

[lludwig]

In your opinion and based on your journey, what makes the difference between an amateur affiliate marketer and pro?

Not realizing that just having a link on your site it's going generate any income. You need to build your brand/cult/following. People click on links because they trust what you have to say and it's not because of just an affiliate commission you get.

What are the common pitfalls that the successful affiliate marketers know to cross?

See some of the above answers.

 

[100k]

I vote for the 2nd post (the troll post) to be removed by mods @MJ DeMarco

I'd like to know how OP managed to sell his business for 7 figures. Can you do that with any niche? Like even promoting ClickBank products ? I guess you'd need a real website built around your niche i.e with useful content, e-mail capture & sales funnel ??

 

[lludwig]

Is affiliate marketing still relevant or how would you do it differently today?

I would say more so than previously. The reason is because traditional ad banners are becoming less and less effective and companies are looking for other ways to spend their ad dollar. Also because affiliate marketing is typically CPA and not CPC so the vendor only pays for what is converted.

I would focus more on paid ads via social media and widgets for the site created to have other use on other sites in that sector (with perhaps rev share). In my case was considering a best robo advisor widget to allow others to use on their site. We had relationships others didn't have and would could have gotten a rev share with the site the widget was hosted on. But I sold before I considered expanding in that direction.

Organic SEO is becoming harder and harder to break into plus don't know if the how profitable the SERP is until you climb that wall. With a paid ad via adwords you know instantly.

 

[lludwig]

Would you say that most of the conversion tracking relied on cookies (not perfect, of course, but it's what most use) and promo codes? Do you think improved privacy concerns (blocking cookies) cost you a significant number of sales?

No in my case.

Well the 3rd party systems use multiple methods for tracking the conversion. You are correct cookies are far from perfect, but they are ways around this to ensure conversions a tracked correctly. This is why I recommend server-to-server trackback tracking instead of the pixel. Pixel tracking is far from ideal since it relies on a cookie.

From my own stats I see around 20-30% (I've seen similar stats listed on the interwebs) of all sessions are using cookie blockers. It's only going to get worse from here. This was more important for my source tracking than for the affiliates conversion tracking. It prevented me from doing effective remarketing campaigns or knowing if the conversion came from say a paid ad.

I believe membership based sites are the future way to ensure you are correctly tracking the visitor. They must login to get the info they want and that in turn allows you to correctly track them and establish a closer relationship to that visitor as well. It's all about trust and becomes an even more important factor. If you are offering something of high value the visitor will go through hoops to gain access and would allow themselves to be tracked.

Start segmenting your visitors into three segments:
- Anonymous (cookie and privacy blockers)
- semi-anonymous (can be tracked but never gives you detailed info on who they are) They may become tracked users at one point
- tracked users (via as simple as an email, to login to a membership site)

Obviously, the tracked users are the most valuable, but with affiliate marketing it really all comes down to a numbers game. Meaning if you are measuring 10% conversion rate via the semi-anonymous and tracked users, you can pretty much assume you are getting a 10% conversion rate for anonymous users as well. With a large amount of traffic a sales funnel becomes very predictable and measurable because the collective typically does the same actions when presented with the same info.

 

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[lludwig]

A new site I am working on is following this advice. I am actually stealing a bit of your funnel strategy so thanks. My competitors are going for sales and they crank out tons of content. I’m leaning toward fewer articles and focusing on quality help. It may be the wrong approach, but we shall see.

No I think that is a better idea. Build long and helpful "super articles" that will more than likely beat the competition. Cranking out crappy articles won't help users and either won't rank or eventually won't rank either.

Which direction would you build the funnel? From money articles (reviews) back or would you start with the info articles and work toward the money articles?

Is your site in the personal finance space?? I would start with general education articles as they are more the lower hanging fruit in the PF space. With reviews you will be hard-pressed to rank for most just starting out. But that's not the say if you are wanting to become a review site that you shouldn't do them either. Keep in mind you are competing against other reviews already out there. What value can you add that the existing reviews don't have??? If you answer none, then more than likely they won't ever rank. Your content has to be materially better than the competing sites.

How did you do outreach (link building) to identify your readers and pull them in? What percentage of time did you spend on content vs outreach in each phase of the project?

Very little IMHO but I also networked heavy with the conference FINCON. So I know most other bloggers and vendors in this space personally.

Only in the past year did I hire an SEO firm specifically to help with outreach and more specifically PR. Most of the time was spent on content (mostly updating) and improving functionality/UX/UI on the site.

Finally, what kinds of payouts would you look for if you were just starting? Would you target expensive products? Or go for volume?

I would do a divide and conquer strategy.

I wouldn't focus on the payouts but more mass appeal/low hanging fruit. If something gets a lot of organic traffic, has a possible ability to generate affiliate revenue, yet the quality of the competing articles stink I would go for this first.

Using my site as an example. We first focused on the robo advisors, then expanded into stock brokers (which was an established area) and recently added savings/CD bank accounts into the review mix. I did banking purposely last. One was because at the time I started rates were low and individuals were going up the rate curve looking for more returns. The second reason was there were already many established players and the chances of ranking for anything with not enough SEO link equity was low to rank for anything.

 

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[Timmy C]

What is affiliate marketing?

How does one get started in Affiliate Marketing?

What are the best niches?

How does affiliate marketing work?

What is the best method for affiliate marketing?

#1 book to read and why(Besides Unscripted and Millionaire Fastlane )

What problems do you see in affiliate marketing? If so, how does one go about solving them?

Do you have a mentor?

What is the best method in goal setting?

Do you keep a journal?

Do Vision Boards work?

How does one network?

What is E=MC^2

What came first the chicken or the egg?

How did the chicken cross the road?

What is the meaning of life?

I laughed so hard. It's just a bit of humour relax guys.

Thanks for doing the AMA would you recommend affiliate market for a business just starting as one of many avenues to generate revenue?

What is the best way to get affiliate marketers on board, do they only consider products with high selling margins?

 

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[lludwig]

The Fastlane forum is not reddit. People here are actually busy with life. Plus, the questions in the first post would discourage him from answering.

BINGO!

 

[c4n]

Thanks for doing the AMA.

I was wondering if you could share some experience with how the affiliate sales were tracked. More specifically, were you (your merchants) using in-house software or 3rd party services (like CJ, Shareasale)? What were the biggest challenges and what could be improved there?

 

[The Abundant Man]

Follow the Nike motto "Just Do It".

View: https://www.youtube.com/watch?v=ZXsQAXx_ao0

 

[HackVenture]

Congratulations on the exit lludwig, and thanks for doing this AMA!

How long were you running the site before it had the authority to be sold for a healthy payday?

Did you go through a broker? Did the buyers find you or did you actively market it for sale?

What prior experience did you have prior to starting this?

And what's next for you now that you've exited?

 

[lludwig]

How long were you running the site before it had the authority to be sold for a healthy payday?

December 2009 is when the site was created. So 8 years.

Did you go through a broker? Did the buyers find you or did you actively market it for sale?

I did the sale myself. There is a specific firm in my space I could have used and did speak with a few year prior, but I also know very well the valuation of these types of sites. So I didn't feel the fees needed to pay them. If the deal fell through they could have been used as they did so happen to knock on my door during the deal making process.

What prior experience did you have prior to starting this?

With affiliate marketing? I had zero prior to this. Same was SEO I have very little experience when I first started.

Prior though owned a web hosting business for 13 years and been involved in web development, design and system administration since 1993. In the mid-nineties worked on quite a few Fortune 500 initial websites including T Rowe Price, Lenscrafters, Chase, IBM, Minolta, ING Bank.

And what's next for you now that you've exited?

Got any ideas?

I'm still thinking about this. I have some ideas but nothing that's jumping out at me yet.

 

[lludwig]

Hey Larry,

I noticed you used Studiopress for IJ.

What are your thoughts on launching with the framework?

Thanks man

I personally love it. Though if you aren't tech saavy it can be tough. The HTML 5 and responsive design makes it very SEO friendly.

 

[lludwig]

Yes for SEO....

( @MJ DeMarco I accidentally posted this in his Aff thread, can you move it over to AMA: SEO sorry )

Say you have 100k products. All with thin content. What would you do then?

Few options that come to mind:
- Hire a team of VAs to put together at least "unique content"
- Take the top X% that are selling, and optimize for SEO
- Add in a ask questions and review section, to populate the page. Would require a moderator.

Yes on all of those.

Keep in mind the way I treated affiliate products was as if they were my own. At least in terms of how to improve monetization.

Add FAQ schema to each product (I know this takes time). But will help SERP.

Going with the low hanging fruit of already good ranking content and improve the SERP for them first.

Meaning:

• FAQ schema (see above)
• The title isn't cut off
• the description isn't cut off
• Replace a generic description to something that would cause someone to click. (ie some unique selling point)
• Product schema (hope you are using this Product | Search | Google Developers)

 

[lludwig]

B2C

Now that's interesting, about the ellipsis.... It seems 90% have taken this into consideration on the first page.

View attachment 29309


So what if your title is longer on page than on SERP? Doesn't that create a disconnect between the reader, even if they convey the same message?

On the other hand, about half of the shopping ads (Google Merchant, specifically) are showing the ellipsis.

View attachment 29310

Then a lot more breathing room, on the shopping results themselves:

View attachment 29311

(Car battery is not my niche, by the way)

Yes Google Ads show up in many different shapes and sizes some are hard to prevent within that realm. Unless you tell Google not to display for specific ad types.

Same can apply to SERP as it has changed over time and Google can display more or less at times. Lastly, the meta description can be outright replaced by Google. You no longer have control over that..at times.

Though the last three look the most congruent in my eyes.

The point is this is the first step in SEO optimization. Controlling (as much as you can) what's displayed in SERP so you increase your CTR.

 

[The Abundant Man]

What is affiliate marketing?

How does one get started in Affiliate Marketing?

What are the best niches?

How does affiliate marketing work?

What is the best method for affiliate marketing?

#1 book to read and why(Besides Unscripted and Millionaire Fastlane )

What problems do you see in affiliate marketing? If so, how does one go about solving them?

Do you have a mentor?

What is the best method in goal setting?

Do you keep a journal?

Do Vision Boards work?

How does one network?

What is E=MC^2

What came first the chicken or the egg?

How did the chicken cross the road?

What is the meaning of life?

 

[Timmy C]

Start an AMA thread and then disappear???

Not cool dude.

 

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[lludwig]

What is the best way to get affiliate marketers on board, do they only consider products with high selling margins?

I'm not sure I understand the question. Meaning to get a vendor to start an affiliate program where none exists?? Can you give me a specific example?

 

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[Timmy C]

I'm not sure I understand the question. Meaning to get a vendor to start an affiliate program where none exists?? Can you give me a specific example?

Sorry I probably explained that poorly.

Let's say I'm selling a product for $20 and I want to get affiliate marketers on board, why would they waste there time pushing my product for $20 when they can push someone else's products for $100 and get better commision. Will this be an issue for me.