It may not be quite the same underground economy as organized crime and the Mafia, but Don Vito Corleone might have a thing or two to say about the emerging trend online known as affiliate marketing. Those affiliated with this world, no pun intended, are getting very well versed in “playing the game.” Many of the most successful Internet marketers, in fact, work behind the scenes and under a shroud of secrecy. What’s this about keywords? Arbitrage? Conversions?
Continuing with our passion for a digital lifestyle (there’s more to it than just gadget hunting, we take a look at the once secret society of affiliate marketers and how they can open up a whole new world to a new generation of entrepreneurs.
What is Affiliate Marketing?
Especially under the circumstances of the current recession, many people are looking for new and innovative ways to make a living. More specifically, they are looking to make money online. You don’t need to be tied to a single company, a single office, or the economy of a single country. The Internet is at once everywhere and nowhere. It is where you are.
Affiliate marketing is the result of the natural evolution of online advertising. The first ads were paid based on a flat rate, so webmasters had no motivation to improve the sales of the advertiser. As the web matured, the preferred model became based on the number of ad impressions. From there, it went be being based on the number of clicks. Webmasters had to start caring. With affiliate marketing, this philosophy is taken one step further.
Instead of being based on a simple impression or click-through, webmasters only get paid when a site visitor “converts” on an affiliate offer. This could be in the form of a purchase on the advertiser’s site, the subscription to a newsletter, or the submission of a contact form. In essence, this becomes a win-win situation for all parties involved.
On the one hand, advertisers only have to pay based on positive results. They pay a commission based on a sale, just like with a commissioned sales staff. On the other hand, the most successful and efficient webmasters are able to make more money, because they are helping to generate more revenue for the advertisers. This, in essence, is how affiliate marketing works.
Looking for Offers in Lucrative Niches
As with most other forms of advertising, affiliate marketing can approach just about every conceivable niche in the universe. For example, shopping sites like LogicBUY are largely monetized through affiliate links. In other words, LogicBUY makes money went a site visitor clicks through on a “deal” and completes a purchase. The site visitor gets the value of finding a good deal, the webmaster makes money on the sale, and the advertiser increases sales. Everyone wins.
While some companies offer their own affiliate programs, a much larger number rely on what are known as affiliate networks. These networks cull together (and manage) a large number of affiliate marketing offers. This eases the process for webmasters to find the best offers and reduces the administrative load for the advertiser.
What kind of offers can you expect through these networks and how much do they pay? Looking at the list from Market Leverage, some of the top offers include government grants, satellite television, teeth whitening, online surveys, money-making programs, and health supplements. Payments vary considerably, but some have commissions of $30 or more per sale.
Building a Pyramid with Referrals
There are many affiliate networks on the Internet and while they may have some differences, they all operate in fundamentally the same way. Some of the more popular networks include MaxBounty and the aforementioned Market Leverage. As you can probably surmise, these networks make money by taking a cut out of the payment pie.
Where the situation starts to get a little more questionable is with their referral programs. Taking on a configuration not unlike pyramid schemes and multi-level marketing (MLM), publishers with these affiliate networks can refer more users to that network, taking a percentage of their earnings. For example, if the referred publisher earns $1000 in his first month, the person who referred him to the network can earn about 5% ($50) of that.
Some networks can offer several “levels” to this referral program. If you refer someone (we’ll call him Joe) who, in turn, refers someone else (we’ll call him Tom), you can still earn a percentage of Tom’s earned commissions. In fact, some of the most successful Internet marketers don’t promote the actual affiliate offers themselves. Instead, they may focus on promoting the affiliate networks as this can be much more lucrative.
There’s More Than Meets the Eye
To some people, it may sound like affiliate marketing is as easy as launching a simple website, filling it with all sorts of affiliate banners, and waiting for the money to start raining in through the door. If only it was that easy.
Transforming your life so that you can be a successful affiliate marketer, making tens of thousands a dollar each and every month, is just as difficult as launching and running any other successful business. In fact, it can be even more complicated due to all the different paths that you can take. Some good. Some evil.
You can launch a shopping site to rake in the conversions. You can participate in arbitrage, capitalizing on cheap CPC advertising and converting that into highly lucrative traffic. Does all of this sound like Greek to you? Believe me when I say that you are not alone.
Tricks of the Trade with Gurus and Experts
Thankfully, there are a lot of successful Internet marketers who are willing to share (some of) their knowledge of making money online. In the picture above, you can see four such individuals. You’ve got Amit Mehta of Super Affiliate Mindset, John Chow of John Chow dot Com, Super Affiliate Zac Johnson, and Kris Jones of pepperjamNETWORK. These guys are (reasonably) legitimate and can offer some real advice.
Unfortunately, there are also a lot of posers, fakers, and scam artists out there too. They claim to be super successful Internet entrepreneurs, well versed in the complexities of affiliate marketing, but they are really just capitalizing on our relative ignorance. They make money online by selling you on false hope. You’ve got to tread carefully out there.
Affiliate Summit East 2009
This year’s Affiliate Summit West was taking place in Las Vegas, roughly the same time as CES. After I was done cruising through the Consumer Electronics Show, I hopped over to this other convention that is totally devoted to tools and programs dedicated to online and affilaite marketing. Affiliate Summit West markets itself as the premiere affiliate marketing conference and convention along with it’s other sibling, Affiliate Summit East.
Shown above is a brief glimpse into the “Meet Market.” Affiliate marketing companies set up their small tables, interacting directly with affiliates and other people interested in the industry. They can ask questions and gather information on potential new programs that can potentially make them more money. This is a largely informal affair, but can provide value to affiliate novices and veterans alike.
The main attractions at Affiliate Summit West, however, are the “multiple tracks of educational sessions covering the latest trends and information from affiliate marketing experts.” These lectures and discussions can feature such notable names as Gary Vaynerchuk and Jeremy “Shoemoney” Schoemaker. There are also numerous panels where star struck affiliate marketing newbies can ask questions and get answers from their favourite online money making celebrities and heroes. In other words, people that the public neither knows nor cares about outside the hallowed halls of this convention.
Attending an Affiliate Summit isn’t all that cheap. With the upcoming Affiliate Summit East in New York (August 9-11, 2009), the early bird pricing for a Silver Pass, Gold Pass, and Platinum Pass has been set at $149, $349, and $949, respectively. This is definitely serious business. With all the available seminars, summits and other educational sessions offered by “Super Affiliates” and organizations, it also isn’t cheap to keep up on the latest money making techniques.
Just One Piece of the Puzzle
Just like the secret world revealed in the Godfather, the online economy of affiliate marketing is incredibly complex and filled with many secrets of its own. The people in the industry have their own special vernacular and jargon, working through a series of specialized applications and strategies to generate the Internet income that they do.
The first piece of the puzzle is recognizing that this world exists. It’s certainly more than a few shady characters with a few “black hat” techniques, but there are some genuine and legitimate folks involved too. Even if they all have a tendency to sound a little like used car salespeople sometimes. However, if you’re willing to sell your soul to promote eBooks, affiliate offers, and other high paying offers, then this mysterious world might deserve a second look in this uncertain economy. After all, everyone can use a few extra dollars these days.
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