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Affiliate Marketing Is A Scam...Or is it? Why 99% Of Affiliates Will Inevitably Fail (24)

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In this post you will understand How & Why you are failing getting profitable in affiliate marketing,
and what YOU can do today to invert the negative trend and raise to the top.

"When solving a problem, instead of reasoning from analogy, I always start from First Principles" - Elon R. Musk

Mr. Musk believes the universe is a rather simple place, governed by laws we can learn to understand.

He believes these universal laws not only apply to physics, but can be found in every aspects of our lives...
and now you're going to see an example of the low of INERTIA applied to your AM efforts:

How Inertia Is Killing Your Affiliate Marketing Efforts

When starting out as an affiliate you are competing with people with a TON of experience & many years in the industry.

Let’s analyze what these people have that you don’t as a newbie:

LAND - They are part of exclusive, super-affiliate-only Networks.

Now. the solution is not to get in there since the products usually have high payouts, therefore it’s going to be very hard for you to gather data on those, you will need a substantial amount of capital to make it.

LABOR - They have a team of specialised professionals that is creating new Angles, Landers & Banners Every Single Day, with the highest quality possible.


CAPITAL - Very simply they can bid higher then you, and can afford to do so because of point #1…commissions are higher so they can afford an higher bid, easy as cake.

DATA - They have BENCHMARKS of proven campaigns that have worked in the past, and know what to expect.

As a newbie starting out you don’t have any of these things.

These things are Hard to acquire and take time to be built.

Now answer this simple question:

Is it more likely that someone that earned $x,xxx a day for 5 years today is going to earn the same amount, or is it more likely that tomorrow YOU are going to hit your $x,xxx day?

This is a rather sad perspective to look at AM, but as always, there's HOPE!

So what in the world can YOU do to find success in affiliate marketing?

Let’s see what most newbies do when starting out(see if it looks something like you):

They join one of the biggest, newbie friendly affiliate networks out there…which are generally the largest with the lowest payouts.

They sign up for a Great Spytool and start ripping the creatives they think are “working best” (Generally not understanding banner burnout, especially in the adult industry)

They struggle and struggle to get green, read every possible thing on forum, feel stressed, spend a couple hundred dollars and then start getting discouraged...
They run a few other campaigns and then decide AM is a scam, and quit.


WHAT ARE THE PROS DOING


To find success in affiliate marketing you have to understand this:


“Whoever can spend the most to acquire a customer wins”


I am gonna repeat it


“Whoever can spend the most to acquire a customer wins”


This means, you will have to be able to SAVE MONEY along line the to become profitable.


HOW DO I DO IT? now asks the scared little affiliate


BY DOING THINGS MOST AFFILIATES EITHER


A) Don’t do
B) Don’t know how to do
C) Can’t do
D) Don’t know can be done


What do I Mean by that? I want to tell you a quick tale of an affiliate I’ve been spying during one of my male enhancements campaigns:


That guy was promoting the same product as me. But he seemed to be able to sustain the high bids prices while I was miserably failing trying to squeeze every last penny heavily split testing & optimising every single quality placement on every single quality network. Result? I quit…and he won.


But how was he able to do it?


He was hosting his offers on a full fledged BLOG where he was placing ads from Taboola & AdSense


This means that YES, he was paying for the clicks, but having the ads on the blog, he was also getting PAID for each impression he got on the articles, which were his pre-sell posts for the offers.


Who’s laughing now? Guess who spent a shitload of money and eventually had to surrender?


This is just one of the strategies that 've seen during my life as an affiliate marketer.


So what does this teach US? Affiliates that want to have success but can’t seem to be finding a way to get there?


“The cave you fear to enter holds the treasure you seek”


To make it as an affiliate marketer you have to build a competitive advantage.
This means that it’s not gonna be possible to make it by promoting offers that everybody is promoting, since your margins are gonna be so thin you will always be spending a LOT of time on optimization, JUST to be able to barely make it or in most cases break even.


The problem is:
• You are not the only one bidding on display ads networks.
• You are not the only one ripping creatives and landers.
• You are not the only one promoting the offers you are promoting.


What you do DIFFERENT from the next guy is what is going to render you able to find success.


You have to create and OWN something that is very hard to get…something that is difficult to replicate or imitate,
and this is NOT an Angle, nor a Banner Ad nor a Landing Page.


It can be a Team, it can be a truly smart and innovative strategy you will need to keep freaking SECRET,
(like the guy who has the blog…which IMHO is an hell of a genius….)
it can be you are in direct contact with product creators (like John Crestani with Nutryst)


The secret to understand is that you, as an affiliate or a media buyer, are at the bottom of the Food Chain.
You eat last. And for this reason, you also endure the largest liability.


To make it happen for yourself in the affiliate marketing industry you have to make conscious efforts to RISE to the TOP of the food chain, by becoming the leader of a media buying team, then a network owner that talks directly to companies, and finally becoming an investor who creates and launches new products.


The question now is: How do you start climbing this insanely pernicious looking ladder to the Olympus of the affiliate marketers?


This is what I want to find out, and this is what I’ll be doing from now on….


So grab your pop corn, add me on skype: live:alessio.cozzolino and as a friend on forum & let’s get going!


It’s going to be a fun ride!


P.S. Oh, of course the opinion of the super-affiliates on forum is LARGELY appreciated. So feel free to share your comments on the subject! I think everybody here will appreciate very much!


DISCLAIMER: This is by no means the truth, and I am no Cassandra, so don’t take my word & if you disagree on something, let’s have a debate! ;-)

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You had me at "the bottom of the Food Chain". It likes a wake-up call for not wasting time and stays sharp in this huge marathon. Hoping to hear more from other affiliates

P/S First Post , and First comment-er

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Interesting stuff to start a discussion. You can outrun competitors with being creative by the way, without having a big budget or bid higher! But if you rely on spying it will be very tough for sure. At the end it's about who has got the highest CTR deciding the best placements and lowest cpc cost.

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I agree with some parts, but also disagree with some

When I was starting, I was thinking this was the case ... while in reality, there are not some super secret networks that only the best get into... Yes, there are newbie friendly networks with low street payouts, but even the good ones are out there and accessible to any affiliate who knows what AM is about. Some are more strict than others, but I think the "secret-super-affiliate-high-payout-networks" is a myth from the most part.

This can help for sure ... but many of the bigger affiliates I know are either working on their own or with very small teams, or outsourcing some parts o the tasks. The idea that EVERY successful affiliate has a team is not real imo.

Valid point, those with bumped payouts have way better position.

I consider this to be my biggest advantage against the new guys ... knowing what to expect (roughly) is of massive help.

Great thread BTW, curious to see what others have to say

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You're over thinking this. I've been in the game for awhile, and expose myself to different areas of Internet Marketing. I have lost count how many times my beliefs have been shattered in terms of what's possible. That's why it's always good to go to different industry events.

I came back recently from an event where there was a Q&A with a Mommy blogger, who makes $1M a year and you wouldn't have been able to pick her from the crowd. I have never heard of her, and she wanted to get more advice on how to grow her business.

Actually, my first intro to Affiliate Marketing was through Pat Flynn who was banking $30k a month from his Bluehost commissions.

Many others who are making 7 figures a year have no idea about this industry. They would have no idea what this so called "food chain" is all about.

The end game should be owning your own offer. Whether that is ecom, nutra, clickbank, infoproduct, coaching, leadgen, etc.

If I was a noob, I would spend all my time mastering a big traffic source (eg. FB, Google, Email, Youtube). If you can run traffic, offers come to you! You can even take Youtube for example. Look at Jake/Logan Paul. These guys figured out something to get crazy amount of traffic.

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Some of your points are true for some affiliates, some are not for some affiliates but most important is that there is nothing that is in 100% accordance for all affiliates.
I started affiliate marketing in 2005 only few months after I had my first PC and my first internet connection.
I knew next to nothing about PCs in general, about internet, HTML, JS, lander, offers, webhosting, advertising or anything else related to this.
I just wanted to make money online so I started testing few things.
For several years I did my stuff without even using a tracker, I didn´t know what CPA networks or so are.
I hate publicity and being in spotlight so I never attended to any marketing events, the only one I attended was a small seminar from Sexmoney 2009 in Cologne.
When I signed up for my first internet marketing forum and saw what else is possible I already made €xxx.xxx with absolutely no knowledge about what the hell I am doing.
So you see, it´s possible to succeed without anything of the above.
Sure, in 2005 it probably was way easier than today, maybe not.
Maybe it was just my younger mind that got me testing lots of crazy stuff, maybe younger people nowadays would also succeed that way when they just get creative.

Today the competition is so much higher but the possibilities are also much more.
It´s blessing or course equally.
Blessing because you have good trackers, many advertising platforms for all kinds of traffic, big networks with lots of offers, spy services to check what´s running hot.
Curse because many people only rely on the things mentioned, rely only on spy services and aff manager recommendations for example.
Means higher competition, people follow recommendations like sheep and many more people do the same stuff.
If more people would think on their own, try weird stuff, try to get something very own running then they still can have much success from the very beginning.
But most people won´t even do it because it´s too easy nowadays to get started.
Affiliate marketing blogs everywhere, affiliate marketing forums everywhere, CPA networks with newsletters, trafficsources recommend trackers, trackers recommend CPA networks, CPA networks recommend trafficsources.
People get spoonfed to get started, get plastered with high numbers, big converters, network EPCs and whatever.
But hospitality doesn´t pay bills.
In the end everyone is only interested in making money, it doesn´t matter if the money comes from 1 high traffic super affiliate or from 1000 newbies.
When newbies start researching they can get AM stuff everywhere, people who were few years ago (allegedly) $xxx.xxx/month super afiliates themselves now make more money setting up a blog and selling their "knowledge".
You won´t believe how many of them are rather poor affiliates but have a "good" reputation so that newbies would buy everything from them (as long as it´s expensive enough to sound credible).
The easy way is to sell shovels to gold diggers, the hard way is to stay a money making affiliate for many years and adapt the landscape.
People need to think for themselves to make stuff working, not only rely on blogs, forums (and forum staff), affiliate managers, Adplexity or whatever.
Internet gets bigger and bigger and possibilities to exploit the growth will always be there.
So yes, connections, data/benchmarks, moneyflow and so on absolutely can help.
But way more important is a good mind.
Sure you can also just run what already is successful and have good success with it but in the end cleverness will always beat assiduity.
The best competitive advantage you can have is your brain, all other things are nice additions.

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That is the only quote you need. As Affiliate Marketers, Business Owners, Entrepreneurs - we are problem solvers. Everything else is mental masturbation.

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is it me or is the quality of the topics on the forum going down a lot recently???

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Maybe the biggest lesson in AM after 3 years for me is that most people try to give the impression they know more than they actually do.

It's very rare to see an affiliate say "I don't know" in public about anything related to affiliate marketing. Most exaggerate the very points you brought up as extremely big advantages. They can be useful but aren't responsible for anything near 99% of reasons for failing.

The biggest advantage most have is they take risks. Sometimes very dumb risks that get them on the wrong side of the law. Taking the right kind of risks is what makes the best affiliates imo. Same category is seizing opportunities without hesitation.

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I've been waiting to see this discussion unfold. There are some great points in this thread, both by the OP and in the replies.

To add to the discussion, here are my 2 cents:

There's nothing wrong with being at the bottom of the food chain. Each level serves a purpose.

I'm not wanting to discourage anyone to move "up the food chain", but usually, the further you move up, the more entry to barrier there would be.

It may be that a bigger investment is needed upfront (money and/or time), or special relationships, or more creativity - and you've listed some of them. Some people don't have any of that (at least not yet).

And then there are people that just LIKE to launch affiliate campaigns as a lone wolf, instead of dealing with the headache of managing a team, or a network, or creating a blog or product/service and having to deal with customer service or comments from readers etc. They just like the instant-gratification - grab an offer, fix up some landers and let her rip.

For as long as there are STILL a ton of other affiliates following the run-CPA-offers-using-ripped-landers model, there will be money to be made by following this model. You don't need to be the top guy being able to afford the top bid. You just need to be willing to test enough offers and landing pages to NOT be the one at the bottom.

My point is that 1)there's nothing wrong with wanting to remain an affiliate, and that 2)being an affiliate at the bottom of the food chain doesn't mean there aren't profits to be made.

But I get your point: Affiliates should look at the whole picture to identify additional opportunities to make a high-profit-margin, more-sustainable business. And I agree that as more and more newbies are trying to get into the field, the CPA-offers+ripped-landers model is working less well.

Although to me, the reality is not as bleak as it sounds in your starting post, your post does brings up some great points. Thanks for sharing your thoughts!



Amy

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Haha I actually find this topic refreshing. It’s nice to hear different perspectives.

Not sure if I agree with all the points mentioned, but props for the fresh point of view!

One of my first uh ha moments as an affiliate marketing newbie was figuring out that I shouldn’t run away from competition.

In fact, I should hit it straight on. Competition showed me where the money was. Once you know where the money is then you can just focus on optimizing and building your edge to beat out the rest.

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I arrived in 2013 in adult affiliate marketing without any knowledge in dev / graphics and computer science in general = I worked in a call center for banks, everyone told me that the market was dead and that the beginners had no chance. "Adapt or Die" was the mantra


The first year my revenue was 10-20k per month on tumblr and twitter, the next year the scaling on Facebook and other sources of a campaign exceeded the million dollar of profits. To use the expression, as "lone wolf".


5 years later I have difficulties finding new goals, my income is comfortable and I earned more money than I imagined. The challenges and the big numbers are for beginners, those who have nothing to lose and everything to create.


It's extremely difficult to build a team of media buyers for scale. In the last 5 years 90% of my profits are the result of my work, 10% with teams/under-treatment.

My conclusion = Money is an energy, experiences are the real fortune.

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I find your experience really valuable.

Twitter and Tumblr are clearly non-conventional traffic sources,
at least I've never heard anyone that has been doing that / never red about it in major forums & blogs.
(maybe it's just me though...feel free to correct me, I want this conversation to be beneficial for it's readers)

This shows me it's very important to think outside of the box and DIFFERENTIATE if you want to be successful.

I've been reading a couple premium blogposts from finch lately, and found a very interesting concept that I think goes along with what we're saying here, regarding competition.

In order to win against the affiliates that have been occupying the space for years he says you have three alternatives:

• Out-communicate your competition:

1) Negotiating better payouts on your offers
2) Lowering the price of your ads by going direct with the publisher buying in bulk
3) Gaining access to exclusive offers not available elsewhere


• Out-hustle

i.e. Bothering to do things that super-affiliates competing with you don't generally deem necessary because they can afford to pay more for the traffic given they have better payouts.

In your case it was researching & exploiting a non-conventional traffic source.


• Innovate

This can be like the guy that came up with the rules landing page in adult dating, or that found out that if you drive traffic to advertorial pre-sell pages you boost your conversions.


By the way I agree on the fact that massive action is the way to go, because sometimes you just get lucky & are the right man in the right place...Woody Allen says "80% of success is...showing up!".

Thanks guys for the great replies so far

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Interesting discussion, after reading your take on the topic I can say I do not fully agree but always open to others perspectives.

My thoughts in a short version, everyone has the potential to be successful - however - only those who truly define a goal and have the dedication to see it through actually become successful.

I've realized over the years that just about anything you choose to do, can be done successfully - both in your personal and business life. Sure, some business models have more potential or are easier to get into - but that is relative to the person and his/her experience and skills. A little of it has to do with those that are willing to take some risk as manu_adefy was saying above but it's not solely about the risk, you can be successful without taking much risk, there are different approaches some are more safe and others risky.

You just have to be diligent and in some way find yourself a small edge. Just today, one of my masterminds groups shared this link > https://www.ceros.com/originals/bootleg-billionaires/ - their entire strategy was to take successful American business models > reverse engineer and replicate the model into a localized country market > and in some cases they sold these replicated businesses to the original company they initially reverse engineered.

Were they copy cats? maybe. But they figured out a way to rip a proven business model > create just a small added value by localizing it > get acquired by the behemoths who they origianlly copied > only to repeat the process over and over - their "edge' is the very business model they have decided to pursue - replicating current businesses with country localization.

99% of people fail at something because they never truly committed to it from the beginning.


Cheers


Andrew

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Yes it was totally my thought, I started without any knowledge and I preferred to "grow" in areas less "tormented".
I don't remember the quote I'm thinking about, but here is the Romanian version:

"It's better to be the first in your village than the last one in town"

I could explain it like this: It is better to be a king in the realm of the blind, than a blind man in the kingdom of kings (seems a mix of several expressions ahah)

You can find a lot of topics that discuss Tumblr and Twitter in 2013 on forums like bhw or gfy, it was very interesting for me because you can find several axes of growth at the time:

1) Automation, a colleague was very competent to develop bots on Twitter and Tumblr, these social networks were very free at the time.

2) Building a brand to create influence, cumulating automation and real influence on these members can generate an impressive virality

3) Convert experienced visitors, it's a real challenge to convert the audience of these 2 social networks. It's very interesting to start.

For example, Tumblr already sanctioned banners or popups but mobile redirections didn't seem to be detected. Twitter at the time = everything was authorised
Now it's completely saturated but if people start to give up, perhaps it's time for some beginners to go.

Maybe I will create a topic about my experience on these social networks

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A blind man in the kingdom of kings? huh?

I think you mean it is better to be a big fish in a small pond instead of a small fish in a big pond, or maybe you mean that in the land of the blind, the one eyed man is the king?

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That's the one that conveys the most similar meaning to the Romanian saying.

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My sentence was completely fancy but on Twitter / Tumblr your big conccurents are not necessarily affiliates / marketers. This is the point I wanted to highlight

Becoming a king among the blind can make sense when you are a beginner, the important thing is not necessarily going directly to the "big sharks" in an industry I think.

Sorry for my bad English, I'm taking classes actually to have a little more fluency

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To clarify my thoughts I think that the best way for a beginner is to use the valuable information delivered on forums like STM to adapt it to an industry/niche/vertical that knows little or nothing about affiliate marketing.


That's what I did and I think that's very useful about motivation, value and self-confidence.

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Au royaume des aveugles, les borgnes sont rois!

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You might enjoy this talk by the late caurmen, in case you haven't seen it already:

How Affiliate Marketing Skills Let You Hack Any Industry in the World

https://www.youtube.com/watch?v=Cuu4p9ILBXU

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Great, manu_adelfy thank you very much for sharing it!

For those of you who that like to read, here's a summary of the video:

It was very interesting and hope you learn something from this experience like I did.

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I found this little video really interesting also, when talking about the EDGE that you need to be the best:




"Figure out the ways to give the ad server what it wants, so you can get what you want"

This guy moved to Tel Aviv to be close to Taboola, Google and Facebook offices and get a Rep there...just saying

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Interesting post, I can tell you that there aren't that many mega affiliates who you describe with teams, and who can bid higher than you and this mumbo jumbo. Only way you can bid higher than everyone else is if you own the offer, or you funnel out data and re-sell it.. in other words you are somehow backend monetizing.

What worked best in my experience is doing what others don't do. For example, in the USA fragmenting by county instead of going broad USA wide or by state.

Also, there's a ton of shit offers out there, and the offer is ultimately what matters. If the offer rules, it will convert on a shitty creative/lander if you push enough traffic to it.

You can split test till the end of your life and it won't make a shit offer turn into a unicorn.

In every single case when we saw success, in the initial tests we saw something there already - which after optimizing moved us out of the hole, or helped pack on profits.


One more thing, for Banners&Landers we acquire a lot of customers by bidding on your typical keywords on google like landing page designer, etc. We can afford those insane prices often in the $xx per click range because we know what our Lifetime Customer Value is, so it makes sense to acquire customers for certain price because we know past data backs it up.

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