Contents
1 Introduction
2 Definition
3 Tools
4 Clickbank glossary
5 Direct Linking & Search Engine Advertising
6 Affiliate Marketing with Squeeze Page / Landing Page
7 Feasibility
8 Conclusion, Thoughts and Recommendations
Introduction
This data sheet is dedicated to demystifying Affiliate Marketing - If you always wanted to get into it (maybe you want to be location independent), this will give you a realistic perspective. If you want the easy money, this will discourage you from doing it (if you are interested in knowing the numbers before you dive into it, go to Feasibility and Conclusion).
In general, the market is saturated and volatile. There's a low barrier of entry, which means, that literally everyone can enter the market. Affiliate Marketing is a low hanging fruit. Rules change all the time. Even laws – a lot of Amazon Affiliates have been warned just recently in Germany. No one knows what will be next year – or even in 5 years. So consider the potential lack of sustainability.
I don't consider myself an expert and I don't know it all. This is my experience and opinion; your mileage may differ. If that's the case, you are welcome to add intel.
Definition
Affiliate Marketing is selling and marketing other people’s products. After join an Affiliate program, you get a unique link to the product. This link is directly tied to you, so you get provision for every sale.
There are multiple ways to do Affiliate Marketing
1. Direct Linking. It is obsolete and does not generate leads, but it’s still a useful tool for getting first experience.
2. Landing Pages with Opt in/Squeeze page. By collecting the E-Mail addresses, you are generating leads.
3. Niche site. Product reviews and tests to niches with specific key words.
4. Blogging. Publishing articles about a specific topic and occasionally promoting a product.
There are more Affiliate Networks out there:
Peerfly Affiliate Network
CJ Affiliate Network
Warrior Forum
Amazon Associates
I will focus on ClickBank and Amazon in this datasheet as I am most familiar with them. If you have experience with the others, feel free to add information.
Tools
In my opinion, these tools are necessary to be really successful in the long run. You don’t need them if you start out, or you can use the free trial. Keep in mind that it can become quite costly.
You don’t need to have all the tools, some are basically doing the same or something similar (GetResponse vs Aweber vs ClickFunnel).
AWeber, MailChimp, Constant Contact etc,
E-Mail Marketing platform for sending sequences or broadcasts.
Cbengine
Offers good insight into what’s going on behind the ClickBank Marketplace. Makes searching for parameters and metrics easier.
GetResponse
It's an Auto Responder with the feature of building a Squeeze Page / Landing Page.
Click Magic
Invaluable tool to track what keywords are getting sales / or opt-ins into Mailing lists.
ClickFunnel
It’s a monster of a tool, allowing you to create complete sales funnels for literally everything. Quite expensive.
ClickBank Builder
Allows you to build and host squeeze and landing pages without needing a domain. Costs a lot.
Clickbank instruction
Pick a Product you know and like.
Avg $/Sale. How much money you will make when you make a sell.
Popularity. How many sales the product has and how much money its making. It's not a bad metric, but it's less important than Gravity.
Gravity. It's the most important value for Affiliates. If an Affiliate makes at least one sale, it goes up by one. Gravity ultimately shows how well a product actually is selling.
1) Always pick Gravity bigger than or equal 1, if you are not feeling like gambling.
2) There are different philosophies on how high Gravity usually should be. Some say the higher the better, but in my opinion, it just creates more competition for keywords. Try picking products with max 60-100 gravity in that case. Try to find the sweet spot and works for you – capturing leads always works regardless of Gravity.
Average Rebill Total. If there is a subscription with recurring costs. $$$
Do I have to know the product? Well, if you want to have the moral authority to recommend it, yes. Ask for a free affiliate copy. Dont misuse the return policy, you will get flagged.
Some Vendors offer pretty good affiliate tools, like prepared copies. Use them.
Direct Linking & Search Engine Advertising
With Direct Linking, you directly drive traffic to the product. You should not do this and you will see why. But here is how it generally works.
You buy Ads for specific keywords. Google Adwords are potentially the most lucrative, but Bing Ads are cheaper and you get enough click throughs. Bing Ads and Google Adwords work basically the same way.
It's a complex tool and if you wan't to get into that you have to do some digging on your own. But having an idea how it works is a useful skill. Remember: You won’t do Direct Linking and you soon will know why. It's just useful to know how it works.
Usually I would say it's a good starting point to get some money flowing. But here's the problem:
1) You don't generate leads. Bad!
2) It simply doesn't work, because GoogleAdwords and BingAds suspend you
My account on Bing got banned without further comment, so I can't say what I did wrong. Had some trouble getting back my money. I suspect they don't allow direct linking to other people's funnels. And you need to have a Privacy Policy. Other than that, beats me.
At least on GoogleAdwords, my campaigns were suspended for just that reason. Google doesn't allow you to direct traffic to other people's sales funnels. You got to have your own thing in between! Which completely renders direct linking obsolete and brings us to building your own branding. There's no other way around it!
And here you start to see the issue with AM: Rules change all the time and screw up everything you have going. You are completely dependent on what others do and how your infrastructure changes. Also, make sure to study the Ads policy so you don't get suspended. I personally found it fun to tweak all the values without much investment. Just to see how the markets work. And knowing how to use AdWords is a good skill to have if you want to promote your business, service or product.
Affiliate Marketing with Squeeze Page / Landing Page
You don't just drive traffic to the product landing page. It's considered bad practice. You will lose potential customers forever and miss out on long term income opportunities.
Imagine if you could get the E-Mail addresses of those potential customers. They have demonstrated an interest in a specific area – let's say paleo, for example. So, from now on you collect the E-Mail Addresses and you can pitch to them later – they are leads.
You need a Squeeze Page an (or opt-in page) to generate leads. It's called like that because you squeeze it in between the source of traffic and the product you are promoting. You don't need to consider Gravity anymore, you can still generate leads in a niche.
You offer free, high quality value by E-Mail and occasionally you ask for action (Affiliate Link, Product link).
How many subscribers you need to make good profits will be discussed later.
With a Website and with Amazon Associates
Amazon Associates is an affiliate program by Amazon. You get a provision of 10%, depending on the product. One possibility and example is building a small web page with reviews and tests of products.
Usually, such a website is low (lower) maintenance, after you get it running. You need a Domain (can’t be a trademark obviously), a Hosting service and WordPress.
The goal is to find a good market, which can be summarized in a short keyword. What’s a good market? Well, I’m glad you ask!
- The niche should not be to small and not to big (Check name with AdWords Keyword-Planer)
- Your competition is low, e.g. there are not lot of websites around doing the exactly same
- People want to buy something in that market and are not looking for free stuff
- You can actually write stuff about it
- Amazon offers products when you type in your keyword
Example:
http://thebestespressomachines.org/
I don’t know what the legal situation is in other countries, but in Germany a lot of “test” pages have been warned (which is one step before getting sued), as they don’t really test but just drive traffic to their affiliates. This is a perfect example of changing rules in the Affiliate Marketing business and how it can affect your income.
Feasibility
How many Subscribers do I need? What are the conversion rates?
Usually, aim to get 1 sale for 100 visitors. If you are not getting sales after your 300-400th visitor, ditch the product/landing page. That's just my rule of thumb when looking at the analytics. Everything else is not that easy.
(
http://www.wordstream.com/blog/ws/2014/0...rsion-rate)
The stats are as follows: You have E-Mail Open Rates of 20-25%. You have a Click Through Rates of 2-3%.
Now let’s do the math. Imagine you want to reliably get 10 sales every day. Lets assume you are awesome and in the top 25%. You get a conversion rate of 5%. You need 200 high quality visitors.
Let's assume your Click Through Rate is about 2-3%. You need 6000-7000 people clicking on the link in your E-Mail.
Which are 20-25% of the overall recipients. You need a list of ~30000 high quality subscribers.
30k is A LOT. And this assumes that you are in the top 25% (in the Top10% you need half as many subscribers). If you are average, you need 60k+ subscribers. If you have conversion rates of 1% like 25%... 150k+ subscribers.
What are 10 sales? I've checked some high gravity products and they usually range between 10-30$ (some outliers). So, you will get 3000-9000$ each month – if you have daily E-Mail sequences. Getting to that number of subscribers is one thing. Writing enough converting E-Mails with perfect copy writing to fill the E-Mail sequence/broadcasts every day for a long, long time is another. Keep in mind that you can only pitch every 3-4 mails without appearing spammy. 10 sales a week is more sustainable, but won't enable you to become financially independent. You get the idea.
Keep in mind that with increasing subscribers the cost of your Mailing list increases drastically.
And that's the thing with Affiliate Marketing no one is going to tell you. You can decide for yourself if getting tens of thousands of subscribers and supplementing them with a lot of E-Mails is realistic.
Example of what can be expected
What counts as both realistic and successful, in my opinion?
This. You will notice that:
1) It's not a lot.
2) It fluctuates.
In my opinion, this will put you ahead of 98% of your Affiliate competitors. For someone from the third world it's a lot. But for you it's first and foremost a lot of daily tweaking, paying Ads, paying for Hosting and tools with a potentially low RoI.
I personally found it fun to do split tests,
copywriting and experiment with keywords. For a while. It feels a bit like gambling. Keep in mind that most people don't even get that far.
Learning from Top Affiliate Marketers
These are the mere basics. If you are starting out, you are not going to know what to do. Either you spend months and years experimenting, or you pay for a program or mastermind. Usually, good advice is hidden behind a paywall – other Affiliate Marketers offer their products on how to do Affiliate Marketing. It's a feasible business model - for them. I was thinking about doing my own course on how to do Affiliate Marketing, too. Because it's such a lucrative market.
Don't fall into the trap of Survivorship bias. This means you should not listen exclusively to guys who „made it “. By this I mean high revenue marketers, who could live from their income. Yes, I've seen some impressive revenue. We are talking about 1000$ a day. But here's the thing:
– Those Marketers have been doing it for years. This means they got started when it was easier to become established. In addition to being established, they have a lot of experience about what works and what not.
– They dominate a lot of niches. They dominate keywords and can afford to buy Ads with good keywords. Also, they rank high in Search Engines.
– They have massive E-Mail lists with high quality subscribers. Their broadcasts and E-Mail sequences are on point. Their
copywriting is flawless. Chances are you don't even know some of those words when you start out.
Conclusion, Thoughts and Recommendations
I don't say it can't be done. I just say doing something else, investing in something else might be simply a better choice. For example, your own high value information product, service, etc. that you can market yourself. Or let others do the marketing.
By the way, I don't think I will contribute to the saturation of the market by making this guide public (like I said, most of it is behind a pay wall. Maybe some people will even be pissed about it). Quite the opposite. By being upfront about the odds and telling „all those secrets “, Affiliate Marketing will stop looking like a „get rich quick” scheme and attract less people. So, paradoxically, it may become more feasible again at some point.
If you want some coffee money, sure, you can get into it. But you need to be ambitious and can't do it in a half assed way. A lot of people seem to think that's it’s this passive income-ish stuff you can do on the fly. Nope. You should work on it every day and build dozens of campaigns. Step by Step. And you need to put in money to drive traffic, generate leads and pay for tools. Even then there's no guarantee that you will break even. You have seen the math we did regarding the conversion rate!
So, you still want to do it? My advice is common sense: Start with one small thing. 2h a day, every day. Don't put too much money into it at first. Play around a bit, see how it works out. And build it from there. Personally, I put AM on hold for now and focus on other projects, but might come back if I have some time. Currently I'm experimenting with Social Media Marketing and building my own brand.