When attempting to make money online, people weigh the pros and cons of using affiliate marketing or selling advertisements. I personally don’t sell advertisements and instead prefer to affiliate market. I’ll explain what affiliate marketing is, how affiliate marketing is different from advertising, and explain my own affiliate marketing policies.
Here’s a brief outline of making money online. There are various levels or tiers.
1. God level. You build your brand high enough that people want you on the Board of Directors of their pre-IPO company (think Uber). This is what James Altucher does. He doesn’t make any money from his books. People read his blog and then want him on their Board. They pay him in shares.
Someone who writes like me cannot play this game. The click bait sites would have a field day with any company that put me on the Board. I therefore have to play the game on a different tier.
It doesn’t mean I can’t play the game at a high level, but I have to be realistic. I’ll never make “James Altucher money” online. And it’s not sour grapes to say I am cool with that. By writing what I do, I know what is being given up and what is being kept – my soul.
2. You sell your own products and even create your own online bookstore. This is what I am working on. I will have my own eBooks. I am also working on a nootropic. If we can sell the product at an affordable price (hard to say, as we are in dream land now, putting in everything we would personally want to use), then I’ll do a whole series on How to Build Your Business from the Ground Up.
3. Advertising and affiliate marketing. I currently earn all of my revenue on D&P and Fit Juice (earnings report for Fit Juice) through affiliate marketing – primarily through Amazon. This is what I will talk about today.
(Fit Juice’s YTD earnings.)
What is affiliate marketing and how does it differ from advertising?
Affiliate marketing v. advertising.
Affiliate marketing is simple to understand. An affiliate marketer, like a salesman, real estate agent, or trial lawyer is compensated based on the outcome he obtains. If you link to a product containing an affiliate link, you receive a commission for each sale. If you don’t close the deal, you don’t get paid.
Advertising is a bit trickier. Advertisers pay you whether or not you make a sale., although they won’t continue advertising with you if their ROI is poor.
Advertising and CPM.
Advertises pay based on a formula of cost per impression – referred to as CPI or CPM. An impression is a single page view on your website. With CPM or CPI, you are paid a fixed amount for each 1,000 page views the advertisement receives.
One way to juice CPM is to create slide shows. Each slide in a slide show counts as a separate page view. Hence the rise of click bait websites, listicles, and slide shows.
Depending on the type of website you run, CPM could be anything from pennies to several dollars. Your CPM will vary based on your readership demographic. Most advertisers consider the male 18-34 demographic to be the most desirable demographic to advertise to.
D&P readers include the highly desirable male 18-34 demographic. An advertising agency would usually bundle D&P up with several other men’s interest websites and sell us to a company as a package.
They would then charge the company $4 CPM for really nasty takeover type ads and a lower CPM for less intrusive ads. In other words, if I had 100,000 page views a month, I’d be able to charge advertisers $400 to run a monthly ad. (I wouldn’t get the full $4/CPM. I am simply illustrating how this works.) You can charge different advertisers different rates based on the size and placement of ads.
Given D&P’s traffic, I could make at least a couple of grand a month in advertisements. I choose not to sell advertisements.
How can you find advertisers?
If you have a big website, they will find you. If you don’t have a big website, put out a call to advertisers. See what they offer and decide if the cost-benefit analysis works.
You can also choose to enable the monetization element of the Disqus comments widget. I have monetization turned off.
If you scroll down to sites that have the widget turned on, you’ll see links to crappy, click bait photos and testosterone boosters.
Why I prefer affiliate marketing to advertisements.
I think advertisements look ratty.
Advertisements also cause you to compromise your message. Other websites allow their comments to become garbage in order to have page views. I ban serial commenters because I don’t need or want their page views.
I can run an exposé on anyone or anything, as no one owns me.
That doesn’t mean everyone who sells ads is a sellout. I know some men who keep their integrity while selling ads.
That said, it’s easier to run a tight ship when you don’t have any outside forces influencing you. “Lead us not into temptation.”
What are some affiliate marketing companies?
Click Bank, Commission Junction, Link Share, Share A Sale, Amazon, and iHerb are all big players in the affiliate marketing business.
How do I sign up to be an affiliate?
It’s pretty simple. You go to one of those companies and you enter your information, create an account, and you’re set up.
You get paid monthly, or based on the site’s policy. Some websites like Commission Junction won’t release your full commissions right away, as they have to account for the fact that some people might return the product.
They base this on an average refund rate. If the product has a 10% return rate, then the company will hold 10% of your earnings for 60 days (the usual money-back guarantee time).
Can you get rich affiliate marketing?
Yes, that is how most of the big guys on the Internet made their money. As with any other business, the vast majority of people will never get rich writing for a living or writing online.
What is my personal policy on affiliate marketing vs. advertising?
How do you select products to affiliate market?
People pitch me their products all of the time. I don’t look for products to affiliate market. My formula for selecting products to affiliate market is simple.
Step 1. Did I buy a product?
Step 2. Is this product something I would recommend to a friend?
Step 3. Does the person or company have an affiliate marketing program?
Step 4. Is this an easy affiliate program to sign up for?
Here’s an example: I have used PrivateMD Labs for a long time. Once I started writing about TRT and posting my blood work, I thought, “I wonder if they have an affiliate program.”
I emailed them. They were responsive. I signed up to be an affiliate.
On the other hand, I recently learned about Call Recorder for Skype from my friend Peter. I recommended it to Chris during our joint podcast about life in your twenties. He bought it. Call Recorder has an affiliate program, but it’s only a 15% payout and I’d have to sign up with Share A Sale or someone. That’s too much hassle to earn 15% on $29.99.
I switched from Host Gator to Pagely. I have been thrilled with my experience with Pagely. They gave me an affiliate link somewhere. I need to track it down.
Sometimes I don’t affiliate market products.
Victor Pride has become a major force in affiliate marketing, making his affiliates thousands of dollars.
Amazon vs iHerb affiliate program.
I order my supplements from Amazon or iHerb. Amazon has an easy affiliate marketing program to join, called Amazon associates. I therefore use Amazon.com’s associate program.
iHerb has a smooth affiliate program. When you make your first order, iHerb gives you a coupon code. You share this coupon code (EKO606) with your friends, and then you get 4% of whatever your friends buy for one year.
If your friends share the coupon code iHerb sends them, then your friend gets 4% of whatever his friends order, and you receive 3% of whatever your friend’s friends order. Pretty cool, huh?
I did a post on the iHerb coupon code and made around $100 a month from it. Nothing to write home about, but it’s easy enough that it’s essentially free money.
Some people are making real money on the iHerb coupon code, as they promote it on YouTube, put up banners on their websites, etc.
Why I don’t affiliate market too heavily.
My main focus in on building my own products that you men will be able to affiliate market for yourselves.
That said, affiliate marketing pays the hard costs associated with running D&P (hosting fees, SoundCloud storage, hardware for the podcast, podcast transcriptions, graphic design work, blog template updates, etc.).
How can I know you’re not biased when you affiliate market a product?
I haven’t even bothered setting up my Amazon.com affiliate account for Great Britain and Australia, even though I get large amounts of traffic from those countries.
That said, I know and live my values and don’t “protest too much.” If you don’t trust me, that’s your own personal choice. It’s a big world and there are a lot of websites to read. You’re welcome to find a website you find credible.