Here's What You Need to Do in 2014 (17)
Hard to believe it's nearly Christmas, right?
Another year in the can, and affiliate marketing is still here.
I read this post yesterday - http://stmforum.com/forum/showthread...orking-in-2013 - and it got me thinking about the reasons for why affiliates are struggling to make money as easily as they used to.
The obvious answer would be competition.
And yet if you were to copy the competition exactly, you might still find yourself in the red. So, what gives?
Has 2013 squeezed the margin out of our favourite niches?
I don't buy that for the simple reason that affiliate ads are everywhere. Some affiliates must be making money, even if many are not.
So, here's what I think you should be focusing on in 2014.
Just one thing actually:
A Big Fat Competitive Advantage
This is advice you have heard before, no doubt.
"If you do the same as the crowd, you won't make any money. Do something different, something off the beaten track, and you're more likely to succeed."
While it's a nice theory, and one that I subscribe to, it's a poor explanation of what a competitive advantage actually is.
After all, some affiliates out there seem to be doing the same old shit on premium inventory, promoting the same old offers, and there's no sign of their margins running thin…
There are several types of competitive advantage, and in truth, you're probably going to need to implement more than one of them.
Let's run through them:
1. Inventory Control:
If you buy up all of a website's traffic instead of bidding for it on a self-serve platform, a sweeter margin is guaranteed. That's your reward for shouldering three main risks:
1. The risk of going balls-in and not being able to press pause if the campaign is not profitable.
2. The risk of a campaign dying mid-month.
3. The risk of untargeted traffic (a lot of direct buys will give you 40% of the country you want, and the rest is a mishmash of 30 other countries. Whether you turn that mishmash in to profit, or not, is part of your gamble.)
The Inventory Control advantage also comes up with the challenge of sourcing where to buy ads, valuing the space effectively, and then having the people skills to actually negotiate a good deal.
It's the best advantage you can have as an affiliate because it removes the competition and increases your margin. To make it work you need experience, good judgment and healthy cashflow.
This is an advantage to aspire to have, but rarely one you'll be able to enforce from Day 1.
2. Access to Higher Payouts
A lot of our daily campaign decisions are driven by how well our offer pays vs. how well the competition's offer pays.
If the offers are the same, he with the highest payout wins.
If the offers are different, you don't want to be the guy stuck promoting the wrong one.
That's insta-shovelling-shit-up-a-mountain.
You can gain a slight competitive advantage by running network exclusives.
If only one network has Offer X, and it's the best in the business, then a lot of affiliates are disadvantaged by not having access to it. So make sure you do.
Sign up with the networks that have exclusives in your niche of choice.
Spend at least a couple of hours every week wheeling and dealing on Facebook, seeing what's hot and where you can get it. This time always pays.
You can gain a much bigger competitive advantage by running offers directly with the merchant and claiming the network's margin for yourself.
2 things to be wary of:
1. Cashflow. Forget your weeklies; dealing with accounting departments is a massive chore. You can expect to be paid once per month.
2. Is your volume worth it?
Even running directly, you can sometimes get a better payout via a network because their established volume gets them a better deal than you, thus dissolving any competitive advantage you might have had. Making it a competitive disadvantage.
My view is that you should focus primarily on obtaining the best offer before you run anything direct.
3. Volume.
Volume is a competitive advantage for affiliates who are already successful, or those with budgets to outlast the competition by running on a lower margin and worrying about profitability later.
In short, volume gives you a better hand at the table.
Like Inventory Control, it's difficult to lay this down as your specialty until you're already doing a lot of other shit right.
4. Untapped Markets
I'm currently making around $2,000/day on a traffic source that, to my knowledge, nobody has ever mentioned on STM.
These are the simplest campaigns in the world, running in prime markets, at way over 100% ROI.
My competitive advantage is that I've been lucky enough for the platform to pass by under most people's radars.
How do you get this kind of advantage?
Well, it used to be commonplace because CPA was so far ahead of the marketing curve that every traffic source we touched was underpriced.
These days, you need to do research and get in to the habit of testing traffic without relying on 'feelers' from the community.
You know, 'feelers':
"If nobody is saying good things about it, it can't be making money."
When people start saying good things about it, that's generally when you need to start shovelling cash in your bag and eyeballing the exit because you ain't gonna be making the same money from it for much longer.
Untapped markets are typically:
- Under-utilized traffic sources
- International campaigns with lower costs
5. Pockets of Profit
If you are a newbie affiliate, it's very difficult to pinpoint a competitive advantage. But there is one…
I call them pockets of profit.
They are the micro-niches where you can laser target users with extremely low CPCs for high ROI. The downside is volume. i.e. There isn't any.
POF is a great example.
You can target the living shit out of that place right down to hair colour, height and sign-up date. Just because you can, doesn't mean many affiliates actually do.
And there's your advantage…
Invest your time in the campaigns considered too niche, too obscure.
These campaigns where you have massive control over every last variable demand massive investment of your energy and resources.
To really make this advantage pay, you have to come up with a system that maximises output without sacrificing the personal touch of your campaigns.
It's not easy to manage 2000 POF campaigns where only a small fraction are making money each day. How do you do that? I don't know.
But then it's not my competitive advantage.
That's the whole point.
If you want it to be yours, you better get busy finding a way.
6. Creative Excellence
A typical affiliate spends most of his day bogged down in creative processes and miscellaneous admin.
Say you spend 3 hours per day optimising banners and landing pages - are you gaining a competitive advantage?
I hate to say this, but probably not.
For creative excellence to be your advantage, you really need to be smashing it out of the park. And that is difficult to manage without getting noticed quickly by the gajillion of scouts breathing hot envious air up your arsehole.
Most affiliates have their heads screwed on just enough to be able to slap together an effective banner and LP. And if they can't, they have the means to steal one of yours.
The time you spend rigorously split testing Headline A vs Headline B is a massive opportunity cost if you haven't nailed down the other more important parts of the chain - like finding the best offer.
99% of the time: the crowd beats you.
Any advantage you create with a good banner, a good LP, a good method or so on… will quickly become the crowd's preferred method too.
Let's be real. This industry is inbred.
If you want your creative output to be the standard that keeps you above the competition, you need to find a way to protect it (by cloaking), or to keep innovating before the competition catches up.
All in all, it's more profitable to imitate the crowd and focus on other advantages that can't be copy and pasted, like...
Continued in Next Post
Continued:
7. Structural Organisation
Fuck me, this month has been one of the craziest of my career. And that's because I've marked my company's infrastructure as the area where I want to establish a competitive advantage.
Reorganizing from the bottom-up involves dismantling a lot of bad habits, but it's a worthwhile investment because the average affiliate - your competition - is a disorganised little bitch, and that can be his downfall.
Good organisation allows you to move seamlessly from market to market, traffic source to traffic source. You want to be lean and mean.
This encompasses a lot of planning, beyond the scope of a single post.
Things like:
- Outsourcing creative production
- Organizing your creatives so you don't spend 4 hours re-producing the same banner, or the same image, over and over again (I've started filing every single LP and banner on my hard drive. Country coded and labelled for size.)
- Storing your data and drawing insights for future campaigns
- Ensuring your financial setup is sound (optimising transaction charges, foreign currency fees, VAT registration, reward points and etc)
- Having a process to manage your active campaigns
- Having a process to draw meaning from the dud campaigns.
If your competitive advantage is that your company operates like a well-oiled production machine, the structure will manifest in to better decision-making.
8. Technology and Tools
You already have a competitive advantage given that you're reading STM rather than the Warrior Forum right now.
Many affiliates, bless their shagged irredeemable souls, do not have the same luxury.
There are two types of affiliate tools: tools that save you time, and tools that give you ideas.
Both are useful, and both can establish a competitive advantage.
Then we've got technology.
Things like tracking software, server setups, CDNs, and so on…
You can see a thread I posted recently asking for the most efficient server setup: http://stmforum.com/forum/showthread...-Restructuring!)
Depending on the type of traffic you're buying, a good server/stats combo can make the difference between profit or loss, success or failure, sanity or the barbaric loss of next door's kitten (who I really liked).
If you're putting a load on your server with pop or plug traffic, your technology needs to be the best or you simply won't be able to compete.
9. Traffic Efficiency
Can you do MORE with your traffic than the competition?
Think pop-unders on page exits, opt-ins on landing pages, dual selling offers, user retargeting, co-branded LPs entwined with your own assets (my fav).
Most affiliates wouldn't know efficiency if it slapped them in the GoDaddies.
They set up landing pages hoping that 1 in 100 users will convert, without giving a damn about the 99 who don't. It's huge traffic wastage.
Can you find a way to convert 2 out of 100? Or squeak extra value by monetizing users who wouldn't otherwise convert?
IMPORTANT:
A lot of the progress you make… you won't even notice until you've made it.
You could be working on establishing the competitive advantages above and seeing zero signs of progress. It's demoralising, until something clicks.
Momentum is a big thing in this industry.
If you make the right moves, you'll be much more likely to grasp and scale success when it finally arrives.
A lot of affiliates don't rely on competitive advantages.
They rely on chance.
You can't scale chance.
I'm starting to like the English again....
One of the best posts on STM in a long while....thy hat is off to ye sir Finch....excellent postage...
Superb post, man. Really excellent stuff.
Brilliant insight here Finch!
Great post man!
I have been thinking about this stuff a lot lately , you just laid it out in plain english. Thanks!
Amazing and Inspiring Stuff, thanks for the reminder!
Excellent post. Thanks man.
Epic post!
Finch dropping knowledge bombs again. 5 stars!
Great post!
Being a web designer I put a lot of time into my landers and I've been wondering how to protect my landers or make them last longer. Could you explain more by what you mean by protecting/cloaking in the quote below?
Originally Posted by Finch
I've never been one to cloak my landing pages so I'm no expert in the field, but I know there are affs out there that will redirect traffic that comes from unexpected referrers or countries. Others will take the attritional route of scrambling their code, or littering it with scripts, to make the page as difficult to jack as possible.
Ultimately though, if your page is accessible to potential leads, then it's also accessible to your competition.
An awesome landing page is definitely a competitive advantage, but it's a short term advantage and it's not scalable.
The second you take it mass-market, that baby is no longer yours.
Which is why I recommend finding competitive advantages that are more difficult to replicate...
Impressive post. Written with great clarity and focus.
I must start taking those smart supplements. Aniracetam or Piracetam? 
Very interesting read.
Great Post! Thank you!
So good !!!!
Thank you so much for the awesome post. Such an important insight! 
Good post i guess i have a long way to go... thank you for the inside
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