Affiliate Marketing
Introduction
In affiliate marketing, you are earning a commission (or referrals fee) for selling other people’s stuff. This can be anything from 5-60% of the purchase price.
As an affiliate, you have no inventory. The merchants are sending and shipping the product and you are simply referring people to buy their product and collecting the checks.
There are three basic ways of becoming an affiliate. The first way is to work directly with the company which offers the product. For example, if you go to Amazon.com and scroll down to the bottom of the page, you will see something called “Join Associates.” If you click that link you will be taken to a page describing how much they pay for referrals. Amazon pays 4% to 8.5% of the sale price depending on how many people you refer.
Let’s say you sign up for the Amazon Associates program. They will send you a link which contains your unique URL which you will use in all your promotional efforts, it will look something like http://www.amazon.com/cgi-bin/aff.pl?id=123. The =123 part allows you to receive credit for every time someone uses that link and ends up making a purchase with Amazon.
The second way of becoming an affiliate is to sign up with an affiliate program provider (APP). So now, instead of having to go search for affiliate programs on individual websites, you have one central website which you go to that makes it easy to see thousands of products which you can promote. These APP’s help you find products to promote and pay you the commissions for any referrals you generate.
The third way of making money from an affiiate program is to start your own! If you’ve written an ebook or have written your own software, you can start your own affiliate program. You’re basically getting people to “freelance” advertise for you. This can be extremely lucrative, and Kirk is currently starting his own affiliate program for the DemocraKey using iDevDirect software. You can set up your own affiliate system using their easy software.
There are two ways you get paid through affiliate programs:
Pay Per Sale – You receive a commission for each visitor you refer who ends up buying a product.
Pay Per Lead -You receive a commission for each visitor who fills out a lead form. (An example is an insurance company who pays you $40 for each person that you get to complete a questionaaire.)
Affiliate marketing works because there are thousands of companies who will handsomly pay you to promote their product or service. Most merchants will pay you a commission as a percentage of each sale, depending on the type of product and the company you are promoting. Another way you get paid is per lead. There are many companies that will pay you $30 or more for every lead that you generate for them. That means if you refer someone and they fill out a form, you get paid. It doesn’t matter if they didn’t actually buy the product. Getting paid per lead is a very attractive offer.
We recommend these APP’s:
The largest and most popular network for affiliates. They have several thousand big name company’s which you can promote. The biggest benefit to working with CJ is they show you statistics on how much money the average affiliate is making for each merchant. With that information, you are more likely to succeed by knowing which products are worthwhile to promote. They also have instant approval to most affiliate programs. The disadvantage is that they charge for affiliate data feeds.(Don’t worry if you aren’t familiar with data feeds). CJ offers direct deposit and payment by check. You also need to have $25 dollars in commissions before you get paid.
If you use Commission Junction, be sure to check out Commission Junction University.
Shareasale is a lot less popular than CJ, which could be a good thing for you. If there are a lot of affiliates promoting one company, the market can become quickly saturated. We suggest giving them a try and seeing how you like it. Like CJ, you need to apply to each company that you want to work with. The disadvantage to ShareaSale is that it tends to take a few days before your application gets approved to work with a company. They also offer payment by check or direct deposit. They offer free data feeds. Like CJ, they show you the 7-Day and 30-Day EPC (average earnings for every 100 people that the affiliate refers).
With Clickbank, you are promoting information products (mostly other people’s ebooks). The minimum payout is $10, but you must set this in your account preferences. They pay by check. The advantage to working with Clickbank is high commissions, generally 20%-60% of the ebook sale price. Many of the ebook’s sell for $20-$97, so you can make a substantial profit for each ebook you sell. Another advantage is the their statistics. Like CJ and Shareasale, they show you popular each product is on their network. But they go a step further and show you Gravity, which is the number of affiliates who earned a commission. Later on, we will go into more detail about how you can use the Clickbank statistics to find good ebooks to promote. The disadvantage is that most of the ebooks sold on Clickbank are poorly written and contain useless sales junk. Remember, it’s always a good idea to take the time to thoroughly research each product before you start your promotional efforts.
Last but not least. FAM is our favorite. They are a very small network which very few affiliates know about. They generally pay on a per lead basis, meaning, you only have to have someone fill out an application, they don’t actually have to purchase a product, before you receive your commission. Some of the payouts are as high as $60/Lead. FAM reports earnings per click, which is how much the average affiliate is making per click for each program. This is great for you. Further along, we will show you how to use this information to know how much you should bid per click in your Google Adwords campaign.
Their support system is excellent, often getting back to emails within a few hours.You can also call them and speak directly with the owners. The disadvantage to this network is that all their products are in the financial sector, which is one of the most competitive industries to promote.
Promoting Affiliate Programs
Promoting a Product
We suggest building a unique and interesting website developed around a particular product or category of products. For example, Kirk built the website travelingforever.com. He discusses traveling related topics and provides his users with helpful information (such as articles on how to safely use other people’s computers without getting your passwords stolen). On his page, he has several methods of making income. One is promoting a durable backpack that he likes while traveling. So if someone also wants to buy this backpack and clicks the link, he makes $30. He also runs AdSense ads. We will talk about these later, but I’m sure you’ve seen them on many websites where it says “Ads by Gooooogle.”For each person that clicks on the ad, Kirk makes about $.50 cents. Because of the way his site is set up, he’s able to let it run on autopilot while he travels.
Josh promotes a product called the Domain Research Tool. You can visit the merchant’s website here. Josh has bought the domain, IDNresearchtool.com. He advertises the website using Google Adwords. So if someone types in “domain tool”, his ad will appear on the right hand side of Google under “Sponsored Links.” Josh pays Google around $.30 cents for every time someone clicks on his ad. Notice that Josh has his affiliate link on the page, www.idnresearchtool.com/buy.html – If someone clicks this link, they go to the merchant website. If they decide to buy, Josh makes around $30 dollars.
These are just two examples of the many ways you can promote an affiliate product with a website. But how about if you have never built a website? Well, you can still promote your affiliate link by creating an ad on Google Adwords.
It’s possible to promote an affiliate program without even having a website. You can set up an account with Google Adwords that directs anyone who clicksyour ad to the merchant’s site. So for example, you join the PetSmart affiliate program. You set up an ad that says “Get custom pet food recommendations. Try PetSmart’s online food selector.”If someone clicks your ad, they are directed to Petsmart with your affiliate link. If they buy, you make 10% of the sales price.
Here’s the basic rundown of how to make money promoting products as an affiliate for Commission Junction without a website:
1.Sign up with Commission Junction.
We suggest you sign up for Commission Junction, if you haven’t done so already. They will ask you some basic information and how you want to get paid (by check, direct deposit, etc). Once completed, you should receive an email confirming your successful registration.
You want to choose a product which you feel comfortable promoting. The product should be aligned with your interests and be something that you are knoweldgeable about. So if you don’t know the first thing about credit cards, don’t promote them– even if they have a high payout.
2. Find and research a merchant that you want to promote.
Here is an example of how to obtain your affiliate link. Keep in mind that even before you get your affiliate link, you want to research the company and product carefully.
Now that you have your username and password, log into your CJ account.Browse around (click the ‘Get Links’ tab) a bit to get an idea of the interface and what products, categories, and company’s you can promote. For this example, click on the Travel -> Luggage link under the “Get Links” tab at the top. You should see a list of merchant’s in the category, one of them being ‘Alpha Omega Publications.’
At the time of writing, this merchant shows a 3-Month EPC of $44.00. Remember, EPC is how much the average affiliate has made on the last 100 clicks he has sent to the merchant’s website. For example, if “Bob the Affiliate” bought a website and put the affliate link on his website, the 7-Day EPC will take all of Bob’s total earnings for this program over the past 7 days and divide it by the total number of clicks his link received. It will then take this number and average it with all other affiliates on the network to give us the 7-Day EPC. This is an important concept to understand because this is the most valuable information in choosing which merchant to promote, although it certainly shouldn’t be the only criteria when looking for a merchant. If a merchant has a low EPC, that generally means it will be more difficult for you to turn clicks into conversions, which could mean bad news if you are promoting through a pay per click program and paying per click, as we show you how to do in this example.
If you see a program has 3-Month EPC of $40.00, first divide this number by 100 to get .40 cents. This is your break-even point. Keep this figure in mind when we set our maximum cost per click using Google Adwords. For now, all you need to know is that if you spend more than .40 cents per click driving traffic to the merchant’s website, you will lose money.
Now that you are familiar with EPC, let’s find a merchant to promote.
Here are some tips:
- Select links with High 3-Month EPC’s.
Basically, low EPC = bad.
- Select affiliate programs with high network earning
Network earnings is the green bar that shows how much the program
has paid out to the entire CJ network.It’s a scale of zero to five bars. If the
green bar is full it means the affiliate program converts well. Look for ones with
high network earnings.
- Does the merchant have a well-known brand?
If a company has already spent millions on branding itself, it makes it a lot
easier for us to promote.
- What are the seasonal trends?
Make sure you are smart about which program you choose to promote. Don’t
promote winter apparel during the summer months.
- Read between the lines
Don’t just rely blindly on the stats, since some of them can be misleading.
Read between the lines and you’ll find a better conversion rate.
- Check out the destination page
Look at how the page is formatted? Does the merchant present the information clearly? How easy is it to understand? Would you buy their product? Do they have anything that can get in the way of the sale? Do they have a special
offer? Do they offer free shipping? Remember, you are working for the
company and their ability to convert visitors to buyers is one of the keys to your
success.
We suggest staying away from any program with less than a $30.00 EPC. Clicking on the link for LuggageGuy brings up a pop-up window showing the details of the program. Scroll down to the bottom of this window and click “Apply to Program. “You should now see a message saying you’ve been accepted into the program. (Keep in mind that some merchant’s will decline you if you have no history. Other’s may take several days before you are approved.)
3. Join the affiliate program and get the link with your affiliate code embedded in it.
Now click on the ‘View Links’ link for LuggageGuy. Click on ‘text link’ and then click on ‘Get HTML’.
You should see a link. Good job, now let’s see the various ways you can use this link in your promotional efforts.
4. Make a list of keywords that people are most likely using to find the merchants
product.
There are a number of ways to find keywords. I like to use Adwords Analyzer, but there are many free alternatives that offer keyword building. I highly recommend the SEO Book’s Keyword Research Tool since it provides the most resources and greatest flexibility.
Let’s do a search for “cruise”
Another valuable keyword builder is the Adwords Keyword Tool.
With the Adwords Keyword Tool we can see what keywords Google feels are the
most relevent. Typing “Cruise” generates a large list of potential keywords we should consider when adding to our campaign.
5. Sign up for a Google Adwords account.
Once your affiliate link, the next stage is to start driving traffic to your site. There are a number of ways to go about this. In my opinion, the single best way to quickly turn a profit on your new website is to use pay per click programs to send cheap traffic to your website. What pay-per-click marketing does is allow you to spend $5 dollars and instantly have your advertisement appear to 100 million people with razor targeting. Only people searching for what you sell will see your ad. As soon as you set up your ad, it will be up and running on the google network. You pick the keywords which your ad will appear for and maximum bid you are willing to spend. You only pay when they click.
The method we propose in this chapter allows you to generate profits without even having a website. The basic idea is to This has the obvious advantage of saving you time and is good for those of you who are not comfortable with setting up your own website.
With our method, you can set up a pay per click campaign on Google Adwords or Yahoo Search Marketing and use your affiliate tracking string as the destination URL.
If someone clicks on your ad, they are taken directly to the website of the product you are promoting. Now, it’s just a numbers game. Since you are being charged for each person that clicks your ad, you must make sure that you aren’t spending too much and also make sure you are turning a profit.
Have you ever noticed those links on the right side of Google after you do a search? Those ads are responsible for Google’s $6 billion dollars in revenue this year. The website owner pays Google every time someone clicks on their ad. You can sign up for Google Adwords and instantly see your ad on that right side. Those advertisers are paying every time someone clicks on their ad. The Google Network reaches around 80% of all internet users. That’s a lot of potential customers! Adwords has been around for a long time and has become very competitive in certain markets.
There are around a dozen pay per click search engines out there right now. When you first start, I strongly recommend you stick with Adwords and Yahoo Search Marketing (YSM). In this guide, we will show you how to set up an Adwords campaign and we recommend you also learn about the YSM platform after you’ve become familiar with Adwords.
You can read more at the Adwords learning center: https://adwords.google.com/support/?hl=en_US
Now that we have our merchant account and we have an idea of what keywords we will be using, let’s create a Google Adwords account to set up our ads. You can create a Google adwords account by clicking here:
Since you will be charged each time someone clicks on your ad, you will need to provide Google with a credit card during the signup process.
6.Create several catchy and unique ads which promote the merchant’s product.
When creating your ad, keep in mind that Adwords ranks the position of your ad on the screen based on your Maximum Bid Price (the most you tell Adwords you want to spend for each click on your ad) and something called a Quality Score. The Quality Score is a combination of different factors which takes into consideration the Click Through Rate (the percentage of people who click on your ad compared to the total number of people who see your ad.)
If your click through rate is high, such as 4%, then you will actually have to pay less for each click then someone who has a low click through rate. In this way, Google shows the most relevent ads (the most clicked on ads) in a higher position on the screen and rewards advertisors (you) for making good ads.
When creating your ad, you want to make it stand out from the crowd. For most keywords, you will be competing against a dozen other advertisers who are also trying to get the attention of the searcher.
Remember, you only have 35 characters including spaces for the Title, 25 characters for Description 1, and 25 characters for Descriptions 2!
Here are some guidelines:
Create Hope -
Carnival Cruise Lines
21 Fun Ships To the World’s
Premier Vacation Destinations
Cause a Sense of Urgency -
Carnival Cruise Tickets
Discount on all last minute
cruise tickets until 8/5/05!
Appear as an Authority -
Carnival Cruise Deals
Select a ship and itinerary and let
our expert agents compete over you.
Appear Unbiased -
Carnival Cruises
Looking for canirval Cruises?
Find 100’s of Discount Cruises Now!
Create Fear -
Warning About Cruises
Don’t go on that cruise until you
get this Free Cruise Information!
Offer a Discount -
Carnival Cruises 75% Off
Save up to 75% on Carnival Cruises.
Best Price & Service Guarantee!
7.Enter your affiliate link as the destination website URL in the Google Ad.
8.Set your maximum bid price per click and enter your keywords for that ad.
In our example, the 3-Month EPC on CJ.com for Carribean Cruises was $129. We divide this number by 100 to get $1.29. This is our break-even point. If our maximum exceed this, we will lose money.However, if we are able to purchase clicks at at .50 cents, that means that we will be making .79 cents on average for every click we send to the merchant. Multiply this by the potential thousands of number of clicks, and you will begin to see how we make money using this method.
Remember, as a traffic middleman, you are trying to bid as low as possible, but still bid enough to have your ad rank in the top 10. If your bid is too low, Adwords may disable your ad.
9.Create additional ads and keywords if necessary.
10. Sit back and relax!(Well, briefly..)
Your ads should immediately appear on the Google ad network.
-
Evan
