Why wouldn't a traffic source jack my campaign?

[bcc423]

Like most successful long term affiliates I take my cash and invest it, same as you, into assets that will throw off cash for me in the future. I just chose to make those assets passive vs. active.

At first I wasn't following you, but when I got reading to the part above, I think you raised a point that hasn't been mentioned before in this thread. And I completely agree with it.

I guess this is what's fundamentally different between two approaches.

I choose to concentrate on building up my investments myself. And I choose to make it my primary objective. It seems like the most logical thing to do. Well, at least until I hit a ceiling there. But I don't see that happening any time soon.

Basically, I spend most of my time and money working on increasing the value of the investment. As opposed to making money with other (short lived) ventures and then channeling that money elsewhere.

I adopted this approach the minute I realized that I can sustain my lifestyle and the growth of the investment without outside cash. So increasing the rate of growth naturally became the most logical course of action.

At the same time, I completely understand the opposite approach that you described.

But we are talking about a different thing now

 

[Jumanok]

I'm with you 100% man!

Yep. Pretty much. But not save, instead I would say use the money to slowly change your entire business model.



It's true to some extent, but you can't really compare day-to-day hustles of an owner of some corner shop which the whole community uses and likes with hustles of a door-to-door salesman roaming the streets.

They both need to work for a living. And a good salesman can make more money in a shorter period of time, not to mention the fact that he can start with nothing and make some money.

But do you really want that kind of a hustle for the rest of your life? Or would you rather use that money to get away from such business and get something more stable?

Most big affiliates want to get into something more stable, and something they can build on. Because any little misalignment in the model causes catastrophic failure. What is the point in fighting fires everyday, so that 10 years later, you're doing the exact same thing. At the end of the day, most "bigger" affs want to become their own network, their own advertiser, or own publisher. The problem with being a real publisher is that there is no secret formula, either it works or it doesn't, and then it's back to ground zero. But the barrier to entry is much higher for sure.

It's busines 101 - you do something that no one else can do, and you do it the best you can. The aff game is fraught with people who do the exact same thing you do, if you cannot offer something of unique value aka. proprietary audience.

I like your insight, I've been debating this topic with my team for a long, long time, just to afraid to shift the focus from something that produces immediate returns.

I'm with you on this...

 

[bcc423]

I like your insight, I've been debating this topic with my team for a long, long time, just to afraid to shift the focus from something that produces immediate returns.

After smaxor's post, I think a more interesting question is not whether to make a switch in your business model or not. Nobody seems to be disagreeing with that.

The question is: why wouldn't you want to dedicate all your money and time to some long-term project provided it has reached a point of generating substantial income.

If you don't have such project yet, then it's understandable. Cash flow is cash flow.

But a few people mentioned that "they do both", and that's the part which puzzles me.

If you have some stable and long-term project, and if it reached a point of bringing enough cash now (aside from being a good investment for the future), why would you do anything else but try to increase its growth rate as fast as you can?

Let's say you have a certain sum that you can spend this week on anything related to your business.

You can do:
1) Run some quick campaign that might or might not bring immediate revenue and have positive ROI.
2) Spend it promoting your "main" long-term project.

Now, I guess most people would say that it makes more sense to make some "extra" money as quickly as you can. And then use that extra money to promote the main project.

But the only reason why your "main" project isn't bringing as much cash as some quick campaign is because you haven't promoted it hard enough in the past.

So by not dedicating all your available resources to that one main project, you are essentially keeping it in the "secondary" league or as a pet project. And it will stay there indefinitely.

I guess this is a way to formulate what I wanted to say.

What I'm doing now is I'm keeping all my existing (profitable) quickie projects for which I'm using my own cc processing. With those, I get funds deposited 3 business days after the sale. So it makes sense for me to continue promoting them. The turnaround time is really quick.

But anything that involves net-45 or net-60 terms seems to be a waste to me at this point. And with networks, you are pretty much stuck with having to wait for your revenue to be deposited into your account.

That wait time slows down the growth of your main project by limiting the funds you have available to promote it today, not some time in the future.

 

[Koschei]

The question is: why wouldn't you want to dedicate all your money and time to some long-term project provided it has reached a point of generating substantial income.

Because Kash is King. A "long-term investment" can easily go bust and you would not know it till time and money is spent. You have to make the judgement call on whether that project has matured enough that you are comfortable betting everything on it.

But a few people mentioned that "they do both", and that's the part which puzzles me.

If you have some stable and long-term project, and if it reached a point of bringing enough cash now (aside from being a good investment for the future), why would you do anything else but try to increase its growth rate as fast as you can?

It does not have to be "either or". Why do you think larger companies have different divisions in different businesses? It is all about diversifying cash flow, reducing exposure to risks and shared learning and staffing across businesses. You just have to manage your business like General Electric, allocating management time and capital to the right businesses, with the optimal return on investment capital and strategic potential. Now, last time I checked affiliate campaigns can provide excellent returns, so this seems like a no-brainer line of business to keep.

Now, I guess most people would say that it makes more sense to make some "extra" money as quickly as you can. And then use that extra money to promote the main project.

But the only reason why your "main" project isn't bringing as much cash as some quick campaign is because you haven't promoted it hard enough in the past.

So by not dedicating all your available resources to that one main project, you are essentially keeping it in the "secondary" league or as a pet project. And it will stay there indefinitely.

You are right that you can maximize the chances of the "main" project if you focus on it 100%, though I am not sure to what extent. Do you get dramatically better returns (in terms profitability) by bidding to be #1 or #2 in PPC? Not necessarily and the difference with a big long term investment you will not know if the exclusive focus pays off until a lot of time has passed.

You should consider that by putting ALL your eggs in the one basket of one project, you are making all-or-nothing bet. Go for it if you are comfortable, but it is helpful to realize that a lot of success factors are out of your control. If you never had a personal experience of losing all your eggs in a single basket (I surely have had it!), you probably would never appreciate the benefits of diversification. There is nothing wrong with either approach, it is simply a different bet for a different risk profile.

What I'm doing now is I'm keeping all my existing (profitable) quickie projects for which I'm using my own cc processing. With those, I get funds deposited 3 business days after the sale. So it makes sense for me to continue promoting them. The turnaround time is really quick.

But anything that involves net-45 or net-60 terms seems to be a waste to me at this point. And with networks, you are pretty much stuck with having to wait for your revenue to be deposited into your account.

That wait time slows down the growth of your main project by limiting the funds you have available to promote it today, not some time in the future.

That's an excellent point on the benefits of being a merchant vs. an affiliate. But weekly payouts for affiliates are becoming quite standard today, so (aside from the risk of not getting paid) the cashflow impact does not seem to be as significant. But surely if you are promoting net-60 you are asking for trouble.

I do not think we actually disagree on much, aside from different risk profiles and views on diversification... I just think that keeping "extra" profitable affiliate projects could make sense if you are able to put in place the systems and staff to manage them.

 

[seolinker]

AM is 1000% better than most small business cause of low risks, almost immediate switching to other traffic/platform and keeping going, etc. If you have some network/offline business/BIG thing it's wayyy much more risk without knowing positive return.

bcc423 probably only speaking from experience of stealing commisions via adsense ads

 

[smaxor]

Why not dedicate time to a long term project? ADD

Honestly I have a few long term web projects and the slow movingness of them makes me want to shoot myself. SEO is a great example you can do very well with whitehat seo but honestly just kill me. I love the thrill of the hunt, coming up with new ideas, testing new stuff. That's why I love this business.

Things aren't always about money. Granted money is the reward but it more comes down to what you enjoy and keeps you excited to get up everyday. That I can take 2 new campaigns and put them up and see if they work it's almost like the thrill of gambling everyday.

I think both strategies have their place they just don't need to be one in the same either is an option. Build a slow moving long term site building user bases up slowly and then having a salable asset. Or hustle, then invest that money into long terms assets that throw off cash and are salable as well.

I think it totally has to do with personality type. I could stop doing what I'm doing and investments are in such a way I wouldn't have to work. My lifestyle is simple and easily covered by asset investment income.

But believe it or not I love what I do! The ups and downs, the hustle it's all exciting, thrilling and really keeps me stoked

P.S. There's a lot of great insight in this thread, best one I've read in a while. Spriited, logical debate I love it. YAY!

 

[trakstar]

Bottom of the food chain Affiliate Marketer making at the very least $500/day>>>>>Bottom of the food chain Magazine Salesman making at the most $500/ week.

 

[bcc423]

It is all about diversifying cash flow, reducing exposure to risks and shared learning and staffing across businesses.

I agree that diversification is a must, as long as you can afford to do it properly.
I'm sure you'll agree that it's better to do one thing well than to spread yourself thin across many different projects. But if you do have the resources to pursue multiple ventures, then the question is: when branching out, would you start quickie affiliate campaigns or other "long-term" projects?

Let's say you have a site that became the authority in its niche. And you hit the ceiling as far as growth rate. In other words, you are at a point where advertising more aggressively than you are doing now becomes prohibitively expensive and not cost effective at all. Word-of-mouth as at its peak and it's growing quite nicely, but increasing the growth rate is no longer a viable objective.

So now you want to start something else.

Would you start, say, a teeth whitening/e-cigs/payday loan campaign or would you start a new site in a mainstream niche with the long-term goal of making it "the go to" place for anyone in that niche?

In my case, I'm estimating it would take me about 2 years for my main project to become the leader in its niche. (I started it in 2004, then added another spin in 2006, and really started pushing it in 2009). But once that happens, I just don't see myself diversifying into a "run your car on water" type of thing.

(I used to drop $800-1200/day on ppc promoting that stuff, until the day G decided it was a scam and fucked over a lot of people. Same with acai guys fucking it up for everyone in the diet niche by adopting the "one rule" headline.) So I'm not against doing affiliate stuff.

I just don't see myself branching out into any risky but profitable venture once I can really afford to branch out. If I diversify, it will be only to start a similar project in another niche or to start a different kind of activity in the same niche by using my established authority.

Why not dedicate time to a long term project? ADD ... I love the thrill of the hunt, coming up with new ideas, testing new stuff. That's why I love this business.

I guess if you can afford it, then why not A good thrill that's actually profitable is a pretty cool thing to pursue.
But I'm definitely not there yet

If I have a spare dime, I would rather get just one more click to my main site.

 

[justo_tx]

Would you start, say, a teeth whitening/e-cigs/payday loan campaign or would you start a new site in a mainstream niche with the long-term goal of making it "the go to" place for anyone in that niche?

In my case, I'm estimating it would take me about 2 years for my main project to become the leader in its niche.

When deciding to dedicate the time and effort it takes to dominate and become an authority for a given niche do you worry about a site like mahalo, that is already an authority, scraping your content and dominating a niche via your effort? I like the thought of a long term play more than a quick shot but reading just the other day about mahalo pulling shit like that (see link below) keeps me debating whether I can trust that effort alone will eventually pay off or if it's more profitable to keep duking it out in PPC where despite any negatives going for it you either fail fast or succeed fast.

Black Hat SEO Case Study: How Mahalo Makes Black Look White! | SEO Book.com

 

[amanda11]

Cool story bros.

 

[matt3]

Wow, I'm surprised by this thread here!

 

[Rooby]

Yeah, it's hard to invest the future in only one idea when you have so many. It's not enough to simply "try new things", because you can try tons of things all the time and if you don't stick with anything, you'll have tried everything and still be no closer to discovering what works.

 

[bcc423]

When deciding to dedicate the time and effort it takes to dominate and become an authority for a given niche do you worry about a site like mahalo, that is already an authority, scraping your content and dominating a niche via your effort?

Not long ago, my thinking shifted from "content" to "people". And I have to tell you, it immediately made a lot of things clearer and easier for me.

My users meet up off-line, they share pics of their newborns, they buy and sell stuff from each other, they check up on each other when ill, and so on.

For fuck's sake, they even make e-books which I sell to other users and pay authors commission. (It took me a while to introduce that concept and get people used to the idea.)

And when I run a promo for some offer, I get e-mail like "I'm sorry, but I can't buy it now. Money is too tight at the moment. But I'll definitely order it on XX, as soon as my next paycheck arrives."

They refer to themselves as extended family. A lot of them "complain" that they spend way too much time on my site and it interferes with their daily lives.

A couple of users even wrote poems dedicated to the "brand".

Recently, there was a hot topic of conversation about some people losing internet connection because they got too much snow, and were "cut off" from the site for several days.

I seriously doubt any scraper can take that away from me.

If you position yourself as purely a source for information or a place to buy stuff, then you don't really have an audience. You have a traffic level. And that can change any day.

But when you really start working on building up an audience (in the fullest sense), then you are much more bulletproof against any competitor who is looking for a quick and easy way.

It takes a shitload of effort to build something like that, but once you gain traction, you really begin to see the potential. And as far as stability, this model is probably is stable as any business ever gets.

I don't care how much money each new person brings me today. What I care about the most is making sure new people in my audience become "addicted" to the site -- not because of the content or offers, but because of other people that comprise my audience.

Of course, this model seems like a really long shot, but that's the beauty of it. It raises the perceived entry barrier so high that few people would even attempt to do something like that.

And the best part is, people who undertake projects like that usually suck at marketing. And people who know how to market usually don't even consider projects like that as anything serious.

 

[Koschei]

And people who know how to market usually don't even consider projects like that as anything serious.

And why don't they consider such projects as anything serious?

Running a community site is all warm and fuzzy and all touchy and feely (been there done that), but the bottom line comes down to numbers. Is it growing fast enough, is it monetizing high enough, is your retention and engagement up to the snuff and is it paying your bills and returning on your investment.

Obviously I do not know what your site is, have not seen your numbers, but time and again I have seen cases when community site owners fall in love with the idea and forget to check if the business model adds up. In any case, sounds like you are having fun doing what you are doing, so more power to you!

It takes a shitload of effort to build something like that, but once you gain traction, you really begin to see the potential. And as far as stability, this model is probably is stable as any business ever gets.

It is stable only if it is making enough money.

The competition issues apply to communities just like they apply to SEO and PPC. Whatever happened to Friendster and MySpace? Community sites spring up like mushrooms after rain and any retard can set up a Facebook Page or Ning Network. Users love you today and get bored with you tomorrow - there are always fun new sites to check out. If you really, really, really care about your niche, sure go for it and you would have a shot at developing true loyalty. But if this is a niche of any significance, fully expect players like Mahalo come after you soon enough with industrial-strength touchy-feely.

To me community is just a cult bolted onto an SEO site. It is nice, but just one way to make (or lose) monies online.

 

[bcc423]

Is it growing fast enough, is it monetizing high enough, is your retention and engagement up to the snuff and is it paying your bills and returning on your investment.... and forget to check if the business model adds up.

I completely agree with that. It all only makes sense if the business is growing and producing revenue. Otherwise, it's just a hobby.

I got into that niche by accident, so I don't have any feelings for the niche itself. So my judgment is not clouded, but I do agree with your hint at it.

As for growth rate, here are the latest stats since 2006. I stripped the absolute numbers since it's not relevant to the discussion, but it should illustrate the point about this being a long-term project and the relative growth over time. If anything, it might help others who are thinking about doing something similar to see what to expect in the initial years.

That's a number of distinct participating users per day, split into top 1% (most active) and "the rest". The revenue grows proportionately with user activity.

It really took a lot of time and money to get it to this point. And I expect it will take even more to continue the growth.

The competition issues apply to communities just like they apply to SEO and PPC.

I disagree here.

Whatever happened to Friendster and MySpace?

One thing that didn't happen is they didn't lose 90% of their market share in one week like the "run you car on water" deals. They didn't fade away into the underground like Adwords/Adsense arbitrage over a course of just few months. They didn't go out as rebills because of an FTC ruling.

It's highly unlikely that an established audience would collapse as quickly as an affiliate campaign. The growth might end, new competitors might start picking up your share, but it won't happen overnight. So if in the worse case, there should be some time to sell it off while it has 80-90%+ of its value.

With affiliate deals, you need to expect the turmoil on daily basis.

Here is an example. I'm not going to re-post the whole thing here.
It was basically a drop shipping site (not that much different from being an affiliate).

http://www.wickedfire.com/hosting-domains/81452-what-would-fair-price-my-site.html#post740479

But if this is a niche of any significance, fully expect players like Mahalo come after you soon enough with industrial-strength touchy-feely.

Well, I don't know how you define the significance of the niche. (aside from going by gross revenue of the industry) But this niche has several *.about.com subdomains dedicated to it (with a bunch of other sites). Has several dozens long-established printed publications. Has trade shows happening around the country about twice a month sponsored by fortune 500's. Has cruises dedicated to it. It might not be huge, but it's not tiny or obscure.

And even if (when) some large player decided to get into it, they won't be able to completely destroy this project without me having enough time to react. Shit, I might even sell it to some larger player later on and let them battle it out.

 

[Webwonder]

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