Career Day – What is affiliate marketing

So  friend of mine who is a high school teacher asked me to come out to his school for career day and give a presentation on what I do.  As I was preparing I figured this would be as good a chance as any to explain what I do to those who don’t know.  A very common question I get from friends  is ” Now what is it you do exactly?”.  Even after explaining they still rarely seem to understand so hopefully I will be able to lay it out here in a way that they can understand.  For those of you out there in the affiliate marketing community this will probably seem old hat to you but if nothing else hopefully I can give you an understanding of what I do.

First of all let me explain how I got started:  Back in 1998 I was working as a delivery driver for Office Depot about 8 hours a day and working at UPS sorting packages for about 4 hours a day. I enjoyed both jobs but neither of them were viable career choices.  My dad had recently started doing some low level SEO stuff for some clients and he ended up partnering up with another SEO company in North Carolina.  He started getting too many clients for him to handle so he asked my brother and I if we wanted to join him so we both quit our jobs and started working with him.  We would mostly work with $1000-5000 contracts and the clients would give us the keywords they wanted to be ranked for.  Back then it was almost all about keyword density so we would throw up some crappy doorway pages loaded with keywords and the sites would be listed in the search engines.  Pretty easy stuff.

After a couple years of that the search engines started getting more sophisticated so we would learn what they wanted and give it to them. For the most part our clients were happy with what we did and their businesses grew because of that.  During this time I learned about affiliate marketing but never tried it out until one of our clients (he booked Orlando and Disney hotels) decided he didn’t want to use us anymore.  So I had a bunch of domains and pages that were getting traffic for people searching for Disney hotels so I changed out the links to the clients site with affiliate links from Lodging.com.  I continued to work with those sites and also built some new sites dealing with Disney tickets and partnered up with a company that sold those.  Then we realized that clients suck.  We were getting more and more clients and we realized that we were spending all our time making these people rich instead of making ourselves rich.  So over the process of a couple years we fired all our clients I moved full time into affiliate marketing.

What is affiliate marketing?  There are many definitions out there but the standard one I always revert to when people ask what I do: “I drive traffic to merchants and get paid a percentage of the sales that result from that traffic”.  Obviously that definition doesn’t cover all the bases but it is a pretty good overall explaination. 

The obvious question is “How do you do that?” and that is where it gets tricky so let me simplify as much as I can.  Basically there are two main areas I work in:

1.  Natural search – I find a niche I want to work in, find a merchant to partner up with (sometimes I find the merchant first), build a site, and get traffic to that site. The site features products and information on that niche. When a customer does a search on Google or Yahoo or MSN hopefully my site comes up near the top of the listings. The customer goes to my site, finds the product they want, then click through to the merchant. When a sale occurs I get a percentage of the sale price, usually around 10-20%. 

2. Paid search or PPC – For paid search I pay for the traffic coming to my site or I pay for the traffic and send it straight to the merchant. These ads I buy are the ones you see on the right hand side of the page on Google or Yahoo.  I pay Google or Yahoo for each visitor that clicks on my ad. The key is to make sure I make more money that I spend. Example: If I make $20 per sale and 5% of the visitors I buy end up making a purchase that would tell me that each visitor is worth $1 to me.  So I need to make sure I spend less than $1 to get that visitor.

Currently I have somewhere between 50 and 100 sites I work on in a variety of niches.  Some of them are very profitable, some might make $10 a month, some make nothing.  But for many of them once they are set up I never really need to touch them again. Yeah, I could probably take them and spend more time on them and make more money than I do but I am all about taking the easy way out on stuff like this.  If it takes me an hour to set up a site and it will make $10 or $50 or even $100 a month after a few months that turns into a very good return for that hour I spent on the site.  Some sites take much more than an hour, some take less.  It just depends on the niche, the amount of competition, what kind of site I build, etc.

Here are a few of the questions I will be answering for the Career Day presentation:

1.  What do you do on a typical day in your job?  – This greatly varies. Some days I will work 10 hours, some days 1 hour.  I do a lot of research, lots of checking stats, lots of reading and learning, and some time spent on actual, real productive work.  If I had to nail it down I would guess I spend around 2-3 hours a day doing real work, i.e. building sites, setting up PPC campaigns. But without the research and stats and stuff like that I wouldn’t be able to do the productive stuff.

2.  What parts of this job do you like the best?  – 2 main things here:  First of all the freedom. I can work as hard as I want but if I want to I can also slack off for a few days. I have a nearly endless variety of sites I can build, many different ways to promote those sites, and so many options I will never run out of work.  For the most part there is always work that can be done but rarely any that needs to be done.  Secondly is the people.  This industry is full of many great people I have met over the years that I now consider my friends. Of course there are some jerks out there but for the most part this is one of the most open groups of people I have come across. There are great people doing great things in this industry and many of them serve as a great inspiration to me workwise.

3.  What kind of qualifications are needed for this type of work?  – Again this can vary greatly.  I have no formal training and learned most of this as I went. But if you are a good programmer you have a leg up.  If you have some marketing training you have a leg up.  If you are good people person you have a leg up.  More important than formal training is having the right mindset.  You need to be a self starter and be able to work on your own, you need to be able to spot trends and adapt, you need to be willing to try new things, you need to not be afraid of failing (you will probably fail about 50-80% of the time), and you need to have a good mind for business overall. There are more characteristics that are helpful but those are some of the more important ones in my mind.

4.  How much money can you make with this job? – You can go anywhere from losing money to making millions a month.  I have seen people on both sides of the spectrum here. And since this industry is so broad and there are so many different ways to make money it is hard to pin down what someone should expect. But if you are committed, a hard worker, have some luck, and have a good mind for this business it isn’t all that difficult to make a full time income.

5.  What advice would you give to a person planning to enter this type of work?  – Don’t quit your day job.  Many people try affiliate marketing every year and I would guess the majority of them don’t succeed for a variety of reasons.  But start small.  Take an hour or two a day and start learning, building websites, researching, and see if you can generate some income.  If you work a hour a day and can make $100 a month within the first couple months maybe there is a future for you here.  From there you can build it up to the point where you can quit your day job and do this full time. 

Dang, I write long posts.  I will have to work on that in the future.  Hopefully you learned something through all this.  In the future I am sure I will expand on some of the stuff here and go a bit more in depth but that should give you an overview.  Any questions?  Leave a comment and ask away.