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Affiliate marketing success stories
A Chinese proverb says "By viewing the old, we learn the new." By examining those who have been successful in the affiliate marketing field, we can better find our own pathway towards affiliate marketing success.
Indeed, we may incorporate what we learn from others as we ignite our own creativity and resourcefulness.
This article presents six affiliate marketing success stories that should serve to motivate and enlighten the reader, particularly as he/she understands how each successful outcome was attained.
A question and answer interview with a prominent affiliate marketer, Shawn Collins, should further help newbies to better navigate the challenging affiliate marketing terrain.
A list of Do's and Don'ts of successful affiliates should also benefit the reader. The article is not a universal blueprint for affiliate marketing success but presents alternative tributaries leading to the final destination - success.
Businesses benefit from referrals
All businesses benefit, if not rely, on word of mouth advertising and a systematic method to generate referrals. Consider an owner of a gym, for example, who offers one month free to any member who refers a friend; two months may be provided gratis if two friends are referred and so on. In essence, this gym owner is not only helping to retain his/her current list of members by offering an incentive but adding to the customer base through the efforts of others.
Online business owners similarly attempt to increase their visibility and profit by enlisting others to offer lead generation, increased traffic and sales and, as such, reward those who do. Those who promote a merchant's website (known as affiliates or publishers) via the use of websites, blogs, emails, search listings, etc., reap the fruits of a revenue-sharing program provided by the merchant (also known as an advertiser).
Any visitor who visits the affiliate's website, for instance, can see the merchant's offering (labeled as an advertisement), click on it, and is redirected to the merchant's website via an internal link attached to the advertisement. If the visitor buys or performs any required action on the merchant's website, then a predetermined commission is paid to the affiliate by the merchant for referring the visitor to the merchant's website.
Some affiliate programs pay for the number of clicks, visits or leads generated. The calculation of the number of visits, clicks or leads is based on proprietary software of the merchants who track the status of their advertisements on the affiliate's website. This tracking enables them to determine the total commission payable to the affiliate.
Affiliate advertisement models
The various models adopted by popular affiliate programs are presented below:
- Pay-per-click (PPC) or Cost-per-click (CPC): Here, the affiliate earns a predetermined commission if any visitor clicks on the merchant's advertisement and is redirected to the merchant's website.
- Pay-per-impression (PPI) or Cost-per-thousand (CPM): Here, an impression means a single view of the advertisement. Hence, if the merchant's advertisement has been viewed, then the affiliate earns a predetermined commission, generally on a cost-per-thousand impressions basis.
- Pay-per-lead (PPL) or Cost-per-lead (CPL) or Cost-per-action/acquisition (CPA): Here, if any visitor from the affiliate's website follows the linked advertisement of the merchant to the merchant's website, and performs a required action like account creation, newsletter subscription, form filling, etc., then the affiliate earns a predetermined commission. Banks selling financial products (for example, loans, credit cards, mortgages), cell phone manufacturers and Internet service providers usually opt for this model of affiliate marketing.
- Pay-per-sale (PPS) or Cost-per-sale (CPS): Here, the merchant pays a predetermined percentage of the sale if any visitor referred from the affiliate's website makes a purchase on the merchant's website. This is the most common model and is widely followed by online retailers.
- Pay-per-call (abbreviation not yet formed): This is a new model and is still in its infancy stage. Here, the merchant pays a predetermined commission for each phone call that is received by the merchant from the visitor who has followed the merchant's linked advertisement placed on the affiliate's website. The latest call-tracking technology is used to determine the source and number of calls.
Today there are thousands of affiliate programs available. There are "affiliate program directories" that collect and supply affiliate programs. There are also affiliate networks like LinkShare and Commission Junction which connect the affiliate to hundreds of merchants offering such affiliate programs. There are Affiliate Program Managers (APM) and Outsourced Program Management (OPM) who link affiliates to different affiliate programs and also track their performance. These are third parties who act as intermediaries between the merchant and the affiliate.
Success stories abound
Numerous success stories have materialized by participating in affiliate programs. Here's a brief study of several success stories:
Affiliate program success story #1: Jason Calacanis - A Google AdSense Affiliate
Jason Calacanis is the owner of Weblogs, Inc., which is a conglomerate of about 100 independent bloggers. The blogs are based on several topics like consumer technology (www.engadget.com), luxury goods (www.luxist.com), automobiles (www.autoblog.com), etc. Industry experts and enthusiasts author all the blogs ensuring that the presented content is exemplary. Authors consistently provide new material, pinging Weblogs.com when they update their blogs. Jason gives a stipend to all the bloggers along with a portion of the AdSense earnings with respect to their blogs. Collectively, over 60 million pageviews a month are accumulated by the blogs of Weblogs, Inc.
Jason signed up for AdSense in September 2004 and in about six months time, the AdSense revenues grew from $200 to more than $1,000 to $3,000 a day. This was achieved by successfully using AdSense channels and the link unit ad format where a list of ads are displayed, pointing to corresponding areas of the site.
Jason advises, "Set goals for yourselves around traffic, number of ads shown, ads per page, number of clicks and as you optimize AdSense, the revenue will follow." He has written his success story because his testing was systematic and meticulous; he experimented and tried one or two new things at a time, always aware of the changes that were fueling the site's continued growth.
Affiliate program success story #2: Chris B. - An eBay Affiliate
In May 2003, Chris B. joined the eBay Affiliate Program. He adopted the "natural search" model of eBay, wherein he created websites dedicated to particular products such as the Puma trucker hat, and established a good ranking for his sites in natural search engines like Google, Yahoo!, MSN, etc.
Visitors who clicked the natural links from those search engines were directed to his site, featuring the related items available on eBay with photos, prices, and listing ending times. From there, the visitors clicked on any product that aroused their curiosity. Thus, they were directed to the eBay site where they could register, bid, and/or buy that product. This way Chris referred traffic to the eBay website and earned eBay commissions.
He makes his living out of these commissions. Chris succeeded because he found out niche products with little competition so that his websites could have a good ranking in the natural search engines. He also made his websites in such a way that they could attract visitors to click on the products displayed and thereby go to the eBay website. In addition, he made a good decision to become an affiliate of an established and prominent company - eBay, and thereby ensured that his websites had a diverse range of products to highlight, leading to a "parent site" with a high degree of recognition.
Affiliate program success story #3: Pedro Sostre - A Commission Junction Affiliate
Pedro Sostre is a brand consultant helping companies to establish and maintain an online presence. He has vast experience working with many companies, including large entities such as CBS Sportsline, the NFL, Motorola, BMW Motorcycles, and Reebok. In 2000, he launched his company, Sostre & Associates, which manages 25 active websites.
He has integrated the earnings per 100 clicks (EPC) model of advertisement from Commission Junction in all his websites – an important statistic that correlates actual sales to clicks/traffic. Knowing the "conversion rate" ensures that Pedro promotes products and services that are in demand, and suggests when to change promotion strategies to increase EPC.
His websites target specialty markets such as travel, cosmetics, audio books, book clubs, and financial services. His websites in this way drive traffic to the numerous advertisers of Commission Junction, and Pedro earns commission as a result. He makes his living based on the commissions generated by his websites.
Pedro says the secret of his success is based on three keys, namely, providing value to customers, collaborating with advertisers, and taking advantage of Commission Junction's sophisticated reporting capabilities.
He says, "Your site needs to be attractive and valuable to existing and potential customers. Make sure they have a good experience once they are there." Kerri Pollard, director of publisher development for Commission Junction, declares, “Great publishers like Pedro make our network the best in the industry. We wish every publisher would follow his practices as they are truly great examples of how to run a top-notch program.”
Affiliate program success story #4: hollywoodvideo.com - An Amazon Associate
Amazon.com calls its affiliates, its "associates". It has over 1,000,000 members and thus can offer a range of advertisers from personal blogs to massive sites of Fortune 500 companies. Hollywoodvideo.com is a content site and is enjoying success serving as an Amazon associate. The site is primarily comprised of an exhaustive list of movies and the visitor is encouraged to learn more about these films through their sister site, reel.com. Visitors can then purchase the flicks, starting with a click of a link to Amazon.com. (Visitors can also buy videos directly on the hollywoodvideo.com site by clicking a relevant link, leading to the same destination: Amazon.com.)
The site's success may be attributable to the following reasons: It features the latest movies, the movies to come soon, top 10 movies, and even enables visitors to create a movie wish list of their own. Users are offered games, gift cards, and a store locator where they can buy or rent videos of their choice. The updated site content, providing a personal touch by the creation of a wish list and personalized movie recommendations, ensures repeated visits, thereby retaining old visitors as well as attracting new visitors. The more visitors, the more clicks leading to Amazon.com, and the greater the number of affiliate sales.
Affiliate program success story #5: Robert Marcus - A LinkShare Affiliate
Robert Marcus likes to listen to music while jogging and so he came up with an idea of a website that would have extensive links to songs which joggers could listen from their iPods while jogging. He created the site JogTunes.com for music-paced running in 2005, and featured links to LinkShare merchant, Apple iTunes. The site became an instant hit and Robert attributes much of his success to LinkShare. As he says, "Thanks to LinkShare, music-paced running is an idea that is off and running."
The strategy that worked for Robert was that he identified a need of joggers. Indeed, if the music matched the pace of jogging, then jogging would become a more enjoyable, if not a more sustainable, activity. He fulfilled this need by providing joggers with music as per their choice, via links to one of the most reliable iPod compatible song providers, Apple iTunes. Furthermore, to ensure that his links would be correctly tracked and his payment would be received, he became an affiliate of an established and reputable affiliate network, LinkShare.
Affiliate program success story #6: Shawn Collins - Affiliate Marketing Expert
The following interview with Shawn Collins, a prominent expert in the affiliate marketing field, should prove instructive to the reader. Shawn has enjoyed a meteoric rise in the field and now runs his own affiliate program management and consulting firm. As this interview is inherently limited in scope, one is encouraged to read more about Shawn's experiences in the field and the advice he dispenses through his books, conferences, blog, articles, reports, and weekly radio show. The reader can also meet Shawn at the Affiliate Summit, a "can't miss" conference for those interested in excelling in the competitive world of affiliate marketing.
Shawn, please describe your initial experiences with affiliate marketing.
It was back in 1997. I had a dial-up account on AOL, a 14.4 modem and a desire to make more money. At the time, I didn't know a thing about creating websites, marketing, etc. But I went through a tutorial at AOL on writing HTML and picked up the basics. Then, I created a hideous, single page site about New York City and put up some Amazon links. I never earned a cent on that site.
What growing pains did you endure at first? What were the biggest obstacles and challenges from that period of time?
Back then, there was a monopoly on registering domains, and it cost $35 a year. At the time, that was a bit prohibitive for me (I didn't realize what a good investment a short name would be). That was a trend – an unwillingness to invest in my affiliate efforts. I was going the free route with tools, hosting, etc. That definitely delayed my progress.
What was your first "Ah-ha" moment? How did you incorporate the lesson learned into your affiliate marketing business?
The first time I got my reporting via email from Amazon with information on commission earned. Back then, there was no option to login to an interface – just a periodic email with affiliate stats. When I realized it was real that I could earn money this way, I was excited and motivated. This persuaded me that I was wasting my time working in magazine publishing – it was time for me to get into a line of work that was stimulating and rewarding.
With my limited affiliate marketing experience, I managed to get a job with a start-up in 1997 called Medsite.com, and I bluffed my way into running the affiliate program there. I’ve enjoyed my work ever since.
Without mentioning names, have you joined affiliate programs that did not keep their promises and/or provide appropriate compensation? What measures did you take when confronted with this situation and what advice can you give others to avoid this circumstance?
Lots of affiliate programs lie in their recruiting efforts – they talk about how easy it is to earn commission from them. That's simply not true – it's not easy. I just don't pay attention to most recruiting efforts from affiliate programs. I would encourage affiliates to ignore proclamations of easy earnings and high EPCs – the most important thing is to test everything yourself and promote what works for you.
How has affiliate marketing changed in the last seven years? What strategies would you implement now that you would not or could not do years ago?
The industry has matured greatly. Seven years ago, many affiliate marketers were content sites which relied on 468x60 banners. The analytics were primitive and fewer companies offered affiliate programs.
Now, the industry is so diversified. Essentially, any way to market online is being leveraged by affiliates… including comparison shopping, domaining, video, SEO, e-mail, social networks, PPC, rewards programs, etc.
If I could turn back time, I would have started up multiple niche community sites back then for popular topics. By now, if nurtured they would have grown nicely and become lucrative affiliate sites.
If one is gifted marketing an affiliate product or service, is it likely that this individual can effectively market his/her own products or services? Should people look into developing their own items while marketing or instead of marketing others' products/services?
I'd say anything that is already selling online can be effectively marketed through an affiliate program. Selling your own products or services can certainly provide more rewards in the best case scenario, but then you've got a lot more risk, too.
If somebody has the infrastructure and know-how to sell a certain product or service, I'd say to go for it. But don't take uncalculated risks.
What are crucial mistakes that newbies tend to commit?
Lack of investment and understanding. It's really difficult to succeed in affiliate marketing if you are unwilling to spend the time and money required to develop a long-term strategy. And affiliate marketing is most certainly not a quick endeavor – it takes patience to endure and succeed.
What are some of the creative (perhaps seldom used) strategies to employ in the affiliate marketing field?
Simply going beyond the banner. There are a lot of exciting opportunities out there with Web 2.0. It's just a matter of figuring out a unique angle.
How long does it realistically take to build a full-time income with affiliate marketing, assuming "full-time commitment"?
I don't think you can qualify and quantify passion. And to me, passion is an essential ingredient in affiliate marketing success. Also, there are so many variables, like the size of a given vertical, the margins involved, competition, etc.
Is it easier to build income from this type of marketing now or was it easier years ago? (Please consider competition, Internet usage, advent of Adwords and Pay Per Click, etc.)
It was never easy. There was certainly less competition in the past, but also less in the way of options of advertisers to choose and methods to promote them. Plus, there is the continuing growth of ecommerce. I think the opportunities for success are just as healthy now as they were years ago.
While I know that you do not recommend any particular affiliate marketing programs, in your estimation, what are the "hottest fields?"
The "hottest fields" are a slippery slope. They change over time. I think the hottest field for any given person should be the area that interests them most. You can certainly go out there as a mercenary and promote the most lucrative thing at the moment, like ringtones or debt consolidation, but I suggest going with a long-term plan in an area that interests you.
Is there any affiliate marketing software that is a "must" when one pursues an affiliate marketing venture?
This really depends on the type of affiliate. There are software programs that help optimize affiliate efforts for different affiliates. For instance, if you're working with data feeds, you should check out WebMerge.
What are your views concerning affiliate marketing networks such as LinkShare and Commission Junction?
I think they're the backbone of the industry. The affiliate networks account for the majority of large affiliate programs, and they also provide a level of convenience in that you can consolidate a lot of your activity under a few logins.
I would like to see them work together to establish standards. For instance, there is a lack of standards in data feeds, which is a challenge for the folks using them.
Can any absolute statements be made regarding the most lucrative type of affiliate marketing payment system (e.g pay per sale, pay per click, etc.)?
In general, CPA seems to be more profitable, especially offers for products and services that are not physical items.
What influence, if any, will blogs make on the affiliate marketing landscape?
I think some are influential in the way networks, merchants and affiliates operate. For instance, Jangro.com is considered to have had an impact in the decision by Commission Junction to change their plans on the Link Management Initiative (LMI).
What are, statistically, the best avenues to market an affiliate program?
It depends on the vertical. Email and PPC work well for some CPA offers, while an established web presence can be more important for selling goods on a revenue share.
Do you see any future trends in the affiliate marketing field?
Smaller affiliate programs. Affiliate managers are focusing on working more closely with fewer affiliates. Also, I think we'll see an increasing number of affiliates embrace the opportunities out there with Web 2.0 and innovate with the new tools that roll out.
Please share your current projects in affiliate marketing, including discussion on your Affiliate Summit.
My main focus is Affiliate Summit, the largest affiliate marketing conference. Our last show had over 2,000 this past January in Las Vegas. We also have events scheduled in Miami (July 8-10) and London (September 28) this year.
Additionally, I provide affiliate management and consulting services as Shawn Collins Consulting, and I publish an annual report on affiliate marketing benchmarks called AffStat.
I also have a blog at http://blog.affiliatetip.com where I post daily about issues in affiliate marketing. And I'm the co-host with Lisa Picarille, Editor-in-Chief at Revenue Magazine, for the weekly show, Affiliate Thing, on WebmasterRadio.FM.
What do you attribute your affiliate marketing success to (e.g., building content, writing articles, following footsteps of a mentor, forum participation, etc.)? Please include any last words of advice for one who aspires to succeed/excel in the affiliate marketing field.
It's all about dedication, tenacity, and relationships. I don't look at my affiliate marketing activity as a job, but rather a fun, profitable hobby. Over the decade I've been involved in the industry, there are way too many factors to list that have contributed to my success. But I'd say the most important of all is to constantly endeavor to learn from others.
Conclusion - Do's and Don'ts of successful affiliates
Analyzing the success stories, we may conclude the following do's and don'ts of being a successful affiliate:
- Build a useful website. Visitors must gain some benefit by visiting your site.
- Retain visitors through personalizations. Provide something personal so that visitors can come again.
- Sign up with a known and established affiliate program. They have their tracking systems updated and so you can be rest assured that you will get your payments.
- Market your affiliate program so that you can increase the number of visitors who see your affiliate offering.
- Optimize your website so that you get a high ranking in natural search engines.
- Know your competition. You have to provide something better than them.
- Choose the advertisement model that is in line with your overall business model.
- Launch your site for some time, before joining any program. Good affiliate programs may like to see your site and study the traffic before enrolling you.
- Look for outside help. You may employ skilled people.
- Use blogs and RSS feeds for promotion.
- Remain active in your industry. You must know the latest trends and needs of visitors.
- Join just any affiliate program. Many affiliate programs are outright frauds.
- Ignore your competition. They are the best evaluators of your products/services.
- Get obsolete. Update your content regularly.
- Rely only on banner ads. Experiment with all types of advertisements.
- Waste time. Be the first to capture any new opportunity.
- Encourage spamming. You will get blacklisted.
With successful identification of customer needs, providing a way to fulfill those needs, and collaborating with established affiliate programs, it is possible to create your own affiliate success story. You just need to manifest a methodical, patient approach and perform lots of hard work. But raising an affiliate program cash cow is certainly worth the effort!
Andy Lax is an account manager at IntelliCollect – http://www.intelli-collect.com – a merchant account company that provides merchants with credit card processing and electronic check processing capability. This credit card processing company also offers an affiliate program – http://www.intelli-collect.com/affiliates.html
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Your host, Allan Gardyne, has been earning a good living from affiliate programs since 1998.