My Affiliate Marketing Experiment – Part 1

Spending a lot of time online I run across the term “Affiliate Marketing” all the time. I even go to an “internet marketing” event once a month here in Austin to meet other entrepreneurs, but always found some of the people doing affiliate marketing a little perplexing (and sort of shady).

When prying into what they do, they never gave me CLEAR answers. They would always say things like, “I do lead generation” or “performance marketing” or “sell an online product” and other buzzwords I didn’t fully understand. I’d ask, “Ok, give me an example of a product you generate leads for” and they’d state a general industry at most (such as insurance, health or real estate). Some of the people said they do “PPC arbitrage” and that they “promote products” but wouldn’t go much further into detail about their business.

I was never satisfied with these responses and just presumed these people were really shady (which some of them are).

So here I am trying to find out what these people do and they keep skirting around the actual details…WHAT THE HELL?

I can tell them I own a rave store and sell light up stuff online. It’s a pretty straightforward, and they can even see the website for themselves. Why were these people acting so shady? They were obviously hiding something or lying about something.

Many of the people I met in the affiliate marketing world seemed to sell herbal pills online or get rich quick schemes for the masses. Most of the products they were promoting seemed relatively useless once purchased, and most had “interesting” billing plans.

In my mind, I saw “affiliate marketing” as referring to a website that promises to get you rich quick…something like this kind of crap:

get-rich-quick-website
(You should be PUNCHED if you even TRY to click that image).

I’ve read many bloggers like John Chow and other guys who make their living from blogging and they frequently talk about affiliate marketing. I kept wondering what exactly it was, especially since they correlate so much of their income to it…..so I decided to do some research and find out.

The first thing I did was research the term “Affiliate Marketing” and printed out all the articles I could find. I read them all and took notes on a plane ride somewhere. I read the Wikipedia article and a bunch of other search results, and the most basic idea behind Affiliate Marketing is:

  1. Someone is selling a product.
  2. You help promote that product.
  3. When someone buys a product through your recommendation, you get paid a percentage of the sale.

SIMPLE.

I thought about this for a second and realized there are many successful companies that heavily use affiliate marketing in a non-shady way. These include Amazon, eBay and so many others. Amway and other companies also use an affiliate structure. Even car dealerships to a small extent seemed like “affiliates” of their larger companies.

The easiest example I can give of a super-simple affiliate marketing experiment is my books reviews page. If you click one of those book links and buy from Amazon, I get a small portion of the sale. Amazon is willing to do this because I helped drive a sale to their site through my review. If it weren’t for me, they probably wouldn’t have made that sale.

So THAT was affiliate marketing??

Not completely.

A lot of people I met talked about buying ads to promote their affiliate products….this was part of the term “Pay-Per-Click Arbitrage” I heard so much about. Some of the more intelligent people in the internet marketing group I attend made a lot of their money this way. I found out what some of these people do is:

  • Signup for an affiliate program for a product.
  • Buy ads on Google, Yahoo, banner ads etc promoting these products.
  • Clicks get sent directly to the product page or their own webpage promoting the product.
  • Whenever a sale is made from that action, they get a percentage of the sale.

This is a frequently touted method of getting rich quick by many crappy eBooks out there. In essence it makes sense. For Example:

  • If you buy paid clicks from Google costing $0.10/click…..
  • You send all that traffic to a webpage that offers an affiliate product/service/signup…whatever.
  • That service pays you $2 per transaction that succeeds.
  • If 1 out of every ten people completes that offer, that costs you $1.00 at Google.
  • So for every dollar you spend, you make two dollars.
  • So long as your spending is less than your earnings, you’re making money.

The math behind this actually works, and some people legitimately make a lot of money doing this….and that’s why people buying get-rich-quick schemes believe in these methods.

I thought this affiliate marketing world was a good model at its essence, so why was everyone I met in this world always so shady? If these people were making money doing arbitrage, why didn’t they share details?

Just like the bottled water idea or homeless experiment, I decided to find out by simply trying it out…. To be continued.

Neville Medhora blogs at NevBlog.com and is the founder of House Of Rave.


65 thoughts on “My Affiliate Marketing Experiment – Part 1”

  1. jtGraphic says:

    Can’t wait to see the follow up post. I’ve read about your experiments before. Always great stuff.

    1. Neville says:

      Thanks JT,

      They’re always fun to do and the blog keeps my accountable for them.

      Currently I’m doing a “Getting a Six Pack” experiment where I’m getting a six-pack stomach in one month.

      Not financial related at all….but summer IS coming soon 🙂

      1. Steven says:

        To answer your question Nev, as to why these people don’t want to divulge information, it’s because they see everyone else who knows what they are doing as competition.

        It’s like the secret sauce to your signature dish at a restaurant. You’d never want to give away your secret ingredient just as you never want to give away exact details of your affiliate marketing campaign.

        If someone knew exactly what you did and how you made money, affiliates often believe, for right or wrong, that these people will copy them and become competition.

        For example, on Google, if someone else bids on the same keywords as you that you know is working, the price of the keywords go up from $0.10 to say $0.20. In your example, you wouldn’t be profiting anymore. Some are shady, some aren’t. But at the end of the day, there are only so much details you can divulge without giving away the intricate details.

        1. Competition is the number 1 threat to aff marketers…well, that and changes to the google algo of course 🙂

          2 major types of aff marketing include the use of PPC and SEO…looking forward to seeing what the 2nd part to this post will be like…

      2. Haha that’s awesome Nev, I guess a lot of people are gearing up for the six-pack-experiment just take a look at how all the gyms are packed right now!

  2. Great no-holds-barred post, Neville. I look forward to reading more of your stuff, and am going to go pay your blog a visit straightaway! Cheers!

  3. Andrew says:

    I thought that “Pay-Per-Click Arbitrage” was where you send cheap traffic to a MFA (Made for Adsense) site. So clicks on the Adsense are worth more than the cost of the traffic.

    1. Neville says:

      I suppose there are many types of PPC Arbitrage. Like I stated in this experiment, I was a total n00b to affiliate marketing…so I apologize if I confused some of the lingo.

    2. They’re all PPC arbitrage. You can basically arbitrage between any advertising or marketing network as long as you’re paying less then what you’re earning it’s arbitrage.

  4. elie palima says:

    The “turbo cash Generator” is one obvious Rip-off.. LOL

    anyway, I’ll be looking forward for Part 2 neville. =)

    1. Neville says:

      Some of those websites look so unbelievably scammy it’s insane!

      I think that’s what kept me away from ANY sort of affiliate marketing for the longest time.

      1. yeah, but when put in front of the right person who is looking for that exact product or “promise,” then things don’t look like a scam…this is where affs can cross that line of ethics to make the sell…i.e. loan modifications, pay-day-advance, some rebills, etc…

  5. Thanks for shairng your insights but aren’t you over loooking it a bit?

  6. Robinoz says:

    I sell several ebooks online. You can find them here: http://www.dwave.com.au/$9-Reports.html there’s nothing shady or secret about that.

    I also consult in business communication. I offer to fix up poorly written Internet sites, capability statements etc and earn money doing it. I also sell a number of Clickbank products and Fab Books which you can read about here: http://www.dwave.com.au/publications.html all affiliate marketing. We aren’t all shady crooks.

    1. Neville says:

      Obviously not ALL of you are shady…it’s simply what stuck out in my mind when you mention “affiliate marketing”.

  7. Javalate says:

    Interesting, I would like to read more about it. Affiliate marketing is a promising way to get money online, but actually I found that most of them just sell something useless.

  8. I think the answer to your question “why didn’t they share the details” is simple. Competition.

    Those who are making a nice income in the affiliate marketing industry want to keep it that way. You’ll often find that they’re in more obscure and less competitive industries due to the higher ROI possibilities.

    Why then, would they want reduce their slice of the cake by giving some random guy the details on how they go about it?

    A general oversight fine, exact details such as offers, ad channels, bids etc, no thanks.

    Perhaps I read a little too much into your question, but it seems like you were expecting to receive information on the aforementioned data.

    1. Neville says:

      True….but I didn’t know this at the time. Pretty much anyone outside the Aff Marketing world can give you pretty detailed info on what they do…but some of the people I spoke with were REALLY closed lipped.

      I find that out later in the experiment.

  9. I love posts like this. Informational and inspirational!

    1. Neville says:

      PA,

      Hopefully you learn something from it. I performed this “experiment” for myself, but definitely thought someone could learn something.

      By the last part you should see the full cycle of what I did that actually turned a decent profit.

      1. most people lose money before they make anything…it’ll be interesting to see how you did…

  10. Sean says:

    Nice post. Basically the whole “Affiliate Marketing” ordeal boils down to a single thing, selling people stuff and you getting a commission. That’s it. There are plenty of *cough* methods, even using Facebook via cloaking links (using URL shortners, even your own WordPress blog and getting one of the bazillion link cloakers out there, etc). You can make 1,001 videos of whatever your product is, make sure they are somewhat different so it doesn’t look like spam, and start shooting those all over the net on sites like Youtube and other’s like it, sending out bulk emails to 100,000 people while at the same time cloaking the link so people don’t know it’s an affiliate link until it’s too late (if they even realize at all). Sites like Amazon are good for that. Why? Because a lot of people shop online there. Even if they click your cloaked link a day ago, and the next day they go to Amazon for something completely different, the affiliate tracking cookie is still nicely tucked away on their machine, you’ll still get a commission.

    I think a lot of people, like 97.81% of them who say they are affiliate marketers and that they are saying all of this fancy affiliate mumbo jumbo don’t do anything unique, and don’t even make the money they say they are making. Someone isn’t going to read up and take interest in someone saying that they are making only $23.07 per month on average, because it’s just too little to brag about. So a person tacks on a few zero’s, and turns the little amount of $23.07 into $23,070. People are much more likely to be awe struck by that number, over the little itty bitty number before it.

    Ok, I’ll stop, I tend to ramble.. and it doesn’t help that I type over 100 wpm hahaha.

    1. Neville says:

      I type WAY less than 100 WPM, so I’ll just tell you this:
      Towards the end of the experiment I find out WHY people are so shady (in fact a few people below hit it right on the head)!

    2. Totally agree about the earning figures!

  11. People are secrative/shady for one of three reasons:
    1) They aren’t actually doing it, so they don’t know wtf they are talking about.
    2) They are promoting shady products, are in fact shady, and don’t want you to know what scumbags they are.
    3) They are making it happen, and they don’t to let others in on how they are making their money (add more competition and thus reduce profit.)

    1. Neville says:

      This is nearly precisely why people were being so shady.

      In the next few posts you see I actually make nearly $1,000….why would I tell anyone EXACTLY what I’m doing!?

  12. Thanks for sharing this. Can’t wait for Part 2 !!

    1. Neville says:

      Part 2 comes when John feels like it, glad you’ve enjoyed so far 🙂

      1. as it should be…it is JohnChow.com 😀 lol

  13. Howard says:

    What a crap post. Most successful people will not tell you what methods they are currently doing because retard noobs like yourself will go off and try and emulate it but it a completely wrong fashion and much it up. So no it is not shady, they probably can spot the noob tattoo on your forehead and are being polite rather than telling you to piss off. You definition of PPC Arbitrage is the funniest thing I have read all day. No wonder these guys don’t tell you crap. You probably go to this monthly roundup and start talking about things you know nothing about and look like a fool.

    1. I completely agree. John take this off! hahahah….

      no but seriously, who ever wrote this obviously is a complete n00b to online marketing and affiliate selling.. You truly believe people tell you exactly how they make money? bahaha that is a good one. I’m 100% certain that John himself has a bunch of affiliate secrets etc, that he doesnt want people to know and to implement, but he is kind enough to give us maybe the jist of it or at least a couple pointers unlike some people…

      1. Come on guys give this guy some credit 🙂

        Yes John is definitely one of the so called “shady” ones, as far as I know John doesn’t really every share any tips/secrets on his blog, all we get is general guidelines but that’s basically it. And that’s how it should be, I do not expect John to come out and publish any of his secret money systems.

    2. Neville says:

      CONGRATS!! You’re the first negative commenter on here!

      I always appreciate useless feedback from anonymous wusses people…keep it coming, and thanks for stopping by!

      1. Neville says:

        I guess you n00b comment was right…I botched my subtle jab at you by not ending the strike.

        1. Howard says:

          Yea im sure you are making a killing in the Rave niche. I’ll just sit back in anonymity and make money while you waste yours on hair bleaching products and try and cash in on glow sticks and house music. and wonder why no one takes you seriously. Such a shame you got the opportunity to post on Johns blog and you have nothing of value to monetize it besides some Adsense on your lame blog.

          1. Neville says:

            You’re so cute when you get all feisty!

          2. hahah so true, sorry neville… all you had on your site were some gay pics of you showing off your fat pack and a couple adsense ads….

          3. Neville says:

            Yea, but according to the Internets, my site is 4X more popular than yours.

          4. Howard says:

            I don’t even know what that means. “According to the Internets” who are these interents that you speak of. Obviously from your so called experiment you know about as much as a 5 year old when it comes to affiliate marketing or maybe more along the lines of an 80 year old as they too often refer to the “Internets.” Rahter than get all defensive and slam everyone for criticizing your crap story, nut up, shut your mouth and take it as constructive criticism.

          5. Neville says:

            I’d actually prefer to egg you on to build up more comments and attention for this post.

            Plus the whole POINT of the experiment was to LEARN about the AM world…..so obviously I would sound like a 5 year old who knows nothing….because I didn’t.

            Keep commenting buddy!

          6. Your site can be as popular as Google for all I care… However, you are not making even half as much money as I am online. Your site is 6 years old, I mean cmon, it should have a good amount of organic traffic by now… lmao, i just started my blog and got it to 140,000 rank on alex in just a month! lol

  14. interesting post looking forward to the continuation… hehe

    1. Neville says:

      You’ll see the 2nd part whenever John posts it, glad you enjoyed so far!

  15. Nev, well first of all good job on the post and on your experiment and I’m sure there are a lot of people interested in the part(s) of your report.

    We all experience the shady/secrecy all these affiliate marketers have, and to be honest I find it perfectly normal. I would very much rather listen to a real affiliate marketer just to get a fraction of a hint that could send me in the right direction then a “so called” affiliate marketer that is spewing out method after method after method on how to get traffic/conversions/leads and what not..

    Why? Because no affiliate marketer in his right mind would give out any of this information, not for any price.

    There is one exception though, and this is where it all boils down to, when a real affiliate marketer comes up with some ingenious way to get traffic/conversions/leads he/she will secretly such the system down until it no longer works then sell the system to the masses (us) to suck some more out of the system.

    You cannot EVER use someone else’s system to make money, because by the time it gets to you it’s useless.

    Yes the owner of the system would have all the screenshots and earning proof that he can place on his sales page to convince you all to buy the “dead system” but they would have been from years past then.

    So unless you can come up with your own system you can never make decent money with Affiliate Marketing.

    Waiting for your next post Nev 😉

    1. Neville says:

      I find this our later in the experiment. I know there are good products out there (I’ve bought a few), but the bad ones are what used to stick out in my mind when the term “Affiliate Marketing” came up.

  16. S Ahsan says:

    thats a good read.. Thanks for taking the time to write and share :)..

    PS: negative feedbacks bring in a lot more publicity 😉

    1. Neville says:

      Thanks for the compliments!

      I’m quite familiar with douchebag commenters on my own site…I like egging them on, it helps distract them from their overly small penises.

  17. grate post by you keep posting
    sargodha board

    1. Neville says:

      I will keep posting the GRATE content!

  18. Vendingmatic says:

    As a long time reader of Nev Blog going back to 2006 you are missing out if you do not follow his blog. Nev has tried many different make money online and off line tactics and never fails to teach his readers something new. I was a bit shocked that Nev had never tried affiliate marketing. His affiliate marketing blog posts are very detail and you should read all the posts. For sure Nev is one of the best bloggers out there and few people know about his site.

    1. Neville says:

      Well, why thank you ::takes a bow::

  19. moneybrown says:

    this site is cool.. i need to start coming to these types of sites more often of money tips and how to run a blog

  20. Get Ex Back says:

    Great insight John .. Looking forward to Part 2.

    Evelina

  21. I hope the part 2 will up soon.

    1. Neville says:

      Part 2 and 3 are written, but will be posted whenever John feels like it 🙂

  22. Michelle says:

    Surprisingly, not many blogs keep me reading until the end of the post, but I can’t wait for part two here. I think you made some excellent points, and although we are in the “affiliate marketing” industry, I’d love to know your thoughts from an outsider view. I can very much see how it can come off as confusing.

    Looking forward to the next part (and reading your own blog as well)!

    -Michelle Pappas, Marketing Manager, Tatto Media

    1. Neville says:

      Even though I run an ecommerce business and have done several internet-based businesses, I always thought Affiliate Marketing was hella scammy….which some of it is.

      Unfortunately the bad stuff stuck out in my mind the most, so that’s where my opinion was formed.

      Part 2 & 3 will be up soon!

  23. hahahahaha…I just read some more of these comments and they’re funny but true…I love the Interwebz!!!

    1. Neville says:

      I love all these internet tubes too!

  24. Mathew Day says:

    Good post so far, you really are pretty blunt with your views. Looking forward to your followup post.

    1. Neville says:

      Thanks Mathew!

      John has gone ahead and posted part 2 of the experiment here:
      http://www.johnchow.com/my-affiliate-marketing-experiment-%e2%80%93-part-2/

  25. There are indeed alot of shady people and misinformation in the affiliate marketing biz….but half the fun is sorting through it all like a puzzle…..

  26. Free Picks says:

    Its mean it was a good experiment on Marketing,

  27. There are almost too many of these groups on Austin 🙂 Looking forward to Part II

    Bryan

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