As promised, I finally have for you guys my affiliate marketing income report for the month of September.
Unfortunately, there is no good news to report. In fact, it is rather depressing, as all my campaigns basically crumble and I end up making virtually nothing.
Only a few months prior in June, I had brought in a whopping $52,447.17 in net profit. 12 weeks later, I’m down to basically nothing. This is just further proof of how volatile affiliate marketing (and making money online in general) can be.
It is devastating going through such a drop in income, but the one thing that makes it easier to cope with is the fact that all affiliates go through this at least once (but likelier multiple times).
I mean, just off the top of my head I can think of 2 prime examples: Charles Ngo and Richard Bonner. In Richard’s case, he got up to making $50,000 a month right before his campaigns died, JUST LIKE ME. He’s now made more money in the past few years than you could fathom.
I’m HOPING that I can bounce back from this and get things rolling again. My drop in income has not discouraged me, but has rather only fuelled me to get back to the numbers that I was producing, and even beyond.
Anyhow, here are my affiliate marketing numbers (not inclusive of my other revenue sources, thank God) for the month of September 2013:
September 2013 Affiliate Campaign Income:
The lowest gross monthly income my campaigns generated all year thus far…
And for the first time, I’ll include the breakdown of the multiple affiliate networks I used:
Affiliate Network Breakdown:
- Affiliate Network #1: $17,773.00
- Affiliate Network #2: $142.00
- Affiliate Network #3: $17,336.00
- Affiliate Network #4: $80.00
- Affiliate Network #5: $245.00
Traffic Source Breakdown:
- Traffic Source #1: $5,789.86
- Traffic Source #2: $0.64
- Traffic Source #3: $19,812.72
- Traffic Source #4: $9,505.66
Don’t ask me why I only spent 64 cents at one source…
I spent $35,000+ to make $467 profit. You can’t get slimmer margins than that, as that works out to a 1% ROI.
However, my goal wasn’t to maximize my profit of the small stuff I was currently running, but rather to find new profitable campaigns that I could scale and make big numbers with.
As a result, I spent just enough on looking for those big campaigns to where I’d still end up with a small bit of profit.
Year-To-Date Affiliate Marketing Results
September was by far the worst month for me this year (to date), basically bringing in nothing.
I am actually lucky that I managed to finish it in the green…
Here’s a monthly breakdown:
That 1% ROI sure sticks out like a sore thumb…
Net Profit Projections
The following linear projection is based off the past 9 months of data, and is projected for the next 5 months:
Since things have been on a downwards slope since June, the projection for February predicts that I’ll bring in around $4,500 net profit. With September being as bad as it was, I might just be happy with $4,500 a month…
Now let’s take a look at the running net profit total from my campaigns this year so far:
Since I only made $467 from my campaigns in September, I’m still at a total of $250K net profit from my campaigns this year so far.
In the graph above, the linear projection predicts that I’ll finish the year at a net profit of around $375,000, meaning that it believes that I’ll make an additional $125,000 net profit over the next few months. That’s rather optimistic!
These are just predictions though. My campaigns have really plummeted over the past few months, so we’ll have to see if the law of averages catches up.
Since this blog post is so late in being put together, I’m actually having a hard time remembering what all happened in September.
Mostly though, the poor results were reflective of the fact that a few of the main offers I had been running got dropped, leaving me basically back at square 1.
As mentioned earlier, I spent most of my profits on trying to get new profitable campaigns going – looking for things that I could scale and run long-term. That is why I was able to spend $35,000 and basically end up breaking even.
I also worked a lot on landing pages during the month, creating new and innovative landing page styles and split-testing them like a maniac.
I also experimented a fair bit with different campaign angles, but simply was unfortunately able to get anything good going.
October Plans and Predictions
Normally in this section I list the plans I have for the upcoming month as well as predict how I think the month will fare profit-wise. However, since October has already come and gone, I will be skipping this section in this report, since I already know how October went!
I won’t be posting the October report in my next post as I don’t really want to publish two income reports back to back, but I can assure you that it will be up soon (most likely the post after the next one).
So how did October perform? Did I finally hit a red month this year? Did I manage to come back swinging and pull in huge numbers? You’ll just have to wait and see!
(Warning: Very image heavy. You may want to revisit this page on your computer if you’re viewing it from your phone.)
Where the hell have I been, you ask?
I’ve been here the whole time, but just haven’t posted in a while as I have been devoting my work hours to my affiliate marketing campaigns, since they took a nosedive and have been in critical status the past 2-3 months. I’ll report more on my affiliate marketing campaigns (including my monthly income reports – I haven’t forgotten!) in some upcoming blog posts.
The other reason I haven’t posted in a while is because I suddenly became very busy with house stuff, as about a month ago I FINALLY sold my condo and bought a house.
It’s amazing how much time it takes. There’s so much paperwork, e-mails, phone calls, and meetings involved, and I still have some more to go. I get possession on November 16th, so there’s still a few weeks to go. Please be patient if I am still slow getting up new blog posts. It’s a very busy time for me!
It took me 3 years to sell my condo, as the condo market here is insanely saturated, not to mention that the housing market in general here is already slow as hell. The funny thing is, while it took 3 years to sell my condo, it took only 3 days to find a house and make an offer on it.
I ended up taking a major loss on my condo. I bought at the worst possible time (2007, right before the big real estate crash), they then overbuilt condos here, and worst of all – they are now in the midst of building wet housing literally right beside my condo.
While I had to eat a major loss on the sale of my condo, I don’t regret accepting the lowball offer, as I was simply tired of waiting forever to sell my condo. One of the major reasons I wanted to sell my condo was so that I could get a house and get a DOG (one to start, anyway ). I could have waited for a better price, but that could easily have taken another 2-3 years. Sometimes you just have to take the loss and move on.
The New House
I bought this new house with my long-time girlfriend Lisa.
As I mentioned above, it took only 3 days for us to make an offer on a place once we started looking, as we had been actually looking DAILY online for about 3 years, ever since I put my condo on the market. As a result, we ended up knowing our local market inside and out.
There was one house at a higher price range with gorgeous ocean views and huge ceilings, but with affiliate marketing being such a roller coaster, we ended up deciding on a house that was much more practical financially. I’ll save the ocean-view mansion for the next house. It will help give me incentive to get to the next level in affiliate marketing.
The house was built in 2007 and is in amazing shape. The inspector was surprised at how good of a shape it was in. Being so new, it’s still under partial warranty.
On a side note, the inspector I hired actually ended up being an ex-employee of Neverblue. Small world, eh?
Here are some overall house details:
- 2,606 square feet
- 4 Bedrooms
- 3 Bathrooms
- Gas fireplace
- Gas hook-up for BBQ
- Fully fenced yard
- 2-car garage
- Media room
- Tiled and hardwood floors
- Walk-in closet
- 2-minute walking distance from the Parkway Trail, which is a 20KM paved trail. This is a bonus for me, as before I would have to drive to either drive to the trail or walk in my noisy neighbourhood
- 1-minute drive to badminton (not my favourite club though)
Below are 39 photos of the new house. Please note that these are taken from one of the online listings of the house, so none of the furniture is mine. In fact, my furniture will be far uglier and the house will look very empty for a while
I’m not sure we’ll keep a TV here. This is actually the upstairs "sitting room". There’s a separate media room, and there’ll be a TV in the master bedroom as well, so I don’t know if we really need that many TV’s…
Small "Dining Room" area…
The kitchen is actually a lot smaller than we would have liked, and is one of the downsides to the house, mainly because of the limited surface area. My condo’s current kitchen is actually bigger!
It does have glass sliding doors to the backyard though, which is nice. There’s a gas hook-up for a BBQ right outside too, so eating outside and barbequing will be very easy.
The kitchen is actually a decent size, it’s just that it has limited surface area. I am considering having an island put in, as I think it would make a lot of sense. The main downside being that you could probably not fit an eat-in kitchen table then…
That’s a pantry on the left, and a pocket door for the kitchen.
The master bedroom.
The back yard.
Back inside… this is another angle of the master bedroom again. I’ll definitely be mounting a TV there, and that’s a walk-in closet with pocket door.
One of the other bedrooms. Every single room apart from the bathrooms in the house is wired for telephone and Internet. The bedrooms aren’t that big though.
Bathroom #2. This one has a big, tall skylight.
The main floor. On the right are two French doors to my office!
The inside of my office.
Other side of my office. At the far end is a custom built-in granite desk.
I might have a wall mounted big screen TV on that other wall above where the black couch is, although I’m a bit concerned that it would affect my productivity, so probably not.
I think if I decorate the office just right though, that it could turn out pretty spiffy!
A fourth bedroom that we’ll likely turn into an exercise room:
This is the media room. It looks kind of small and dirty in the photo, but it’s actually quite large and nice (I don’t know why they didn’t feature it better in the real estate photos).
It’ll be nice to be able to play games like Rocksmith 2014 and not have to worry about the volume level for once!
Main level bathroom. All bathrooms have those curved shower rods… not a huge thing, but I’ve always wanted them!
And there you have it!
If you guys like, I can record a house video tour once I have the keys. Let me know if you’d be interested in that (or if the photos are enough). I did one when I purchased my condo back in 2007.
While Walter White was able to sustain a 99.1% chemically pure crystal methamphetamine, it is virtually impossible to generate affiliate leads that will result in 99.1% sales for the advertiser.
In this post, I will be talking exclusively about lead generation, not CPA offers that are based on CPS (cost-per-sale) where advertisers are basically guaranteed a profit every single time.
With lead generation (typically offers such as dating, gaming, toolbars, submits, etc. – basically anything that is free for the user), affiliates are simply providing leads to the advertiser that can potentially turn into paying customers. It is up to the advertiser to make the turnover.
As a result, lead generation can be a bit of a finicky realm to deal in, as you will constantly be concerned with lead quality. Or rather, the advertiser of the offer will be. This is one of the main reasons publishers get pulled from offers, if not the top reason.
Be Walter White
In Breaking Bad, Walter White used his chemistry background to enter the dark world of methamphetamine production and trafficking by improving the "quality" or purity of the "product".
It’s not the best comparison in the world, but lead generation is similar in that every affiliate will have a different quality for their leads. Advertisers with lead-paying offers will always look at your lead quality eventually and will act upon it as follows:
- Very low or continued low quality: ban you from the offer
- low quality: lower your payout and/or cap traffic
- medium quality: do nothing
- high quality: do nothing (this is when you can negotiate higher payouts)
- very high quality: typically ask for more volume (again, ask for higher payouts!)
So, what can you do if you have poor quality leads? Are you stuck with a lower payout?
No, you’re not. Not if you become the "Cook".
For example, let’s say your current lead quality looks like this:
In this example, let’s say you’re sending 3 different traffic sources to the same offer. All of your sources have different qualities of traffic. Your first traffic source is sending in 15% of the traffic and is of poor quality, your second traffic source is sending in the majority of volume at 80% and is of decent quality, and your third traffic source is sending in just 5% of the traffic to the offer, but is good quality.
With this mix, the advertiser will most likely determine that your quality is "okay", and leave you at the default payout. Let’s say that payout is $5.00.
Now, let’s say that you’re trying to increase your ROI by buying more of that cheaper traffic (the low quality stuff) and your overall quality on the offer starts to look more like this:
This would be considered low quality by the advertiser and you’d almost certainly see yourself either getting kicked from the offer or else getting a noticeable pay cut on the offer. If the first example paid out $5.00, then this example would probably pay out something more like $3.75 – a 25% drop.
Are You Ready to Cook?
The obvious answer to this issue is simple: improve your lead quality. With experience, you’ll know which sources of your traffic are low quality and which are high, and even on a targeting level.
For example, Facebook is generally very high quality while PPV is not. Ads with "free" in the ad copy or images usually lowers quality while including the price will improve it.
Obviously, this will mess with CTR and prices, and that is where you have to find the right balance and the right mix.
Going back to the situations above, let’s say that you were making $1,000 a month profit with the average quality mix, and $200 a month profit with the low quality mix.
Let’s also assume that the reason you aren’t sending in more high quality traffic (the 5% in the examples) is because it is extremely expensive and you’re only making a 5-10% ROI on it, and that’s only possible on a low volume basis.
In many cases such as this, it is often beneficial to purposely take a loss on some campaigns by buying up more volume of the higher quality traffic, in order to improve your overall lead quality on the offer.
Read that again, because that’s a huge tip for you guys.
This is something I didn’t really realize until not all that long ago. All I looked at was what my bottom line was and how I could scale and improve ROI and profits.
But after getting pulled from so many offers due to low quality, I’ve had to look at things at a more granular level and understand what the root of the problem was and how I could fix it.
The solution was to improve my quality by intentionally taking losses on the higher quality traffic sources, in order to improve my quality as a whole.
Therefore, let’s say you changed your quality to the following:
This would definitely be considered good to very good quality, and the advertiser would be very happy with it. You’d be able to run the offer uncapped for sure and would almost certainly be able to get a nice bump on the offer.
With this quality in our examples, your payout could be $6.00 – a 20% increase over the "medium" quality example.
But more importantly, in my opinion, is that you wouldn’t have to worry about being dropped from the offer. The advertiser would be happy with your quality and you could work on scaling it (as long as you keep the quality in line!).
Now, it’s not quite as easy as simply buying up more of that higher quality traffic, because as stated earlier, it’s more expensive and you’re actually taking a loss on it!
This is where you’ll need to do some number crunching and analysis on your campaigns in order to figure out how you can create the "perfect mix" that will allow you to provide high enough quality while at the same time allowing you to scale things up and profit.
Fortunately, with the 20% bump that put your payout at $6.00, this will help to compensate for some of that more expensive traffic. In this scenario, let’s say you’re now making $1,200 a month on the offer.
While not a big improvement over the $1,000/month you were making at "medium" lead quality, it’s still an improvement, PLUS you’re now sending in high lead quality which will allow you to run this offer for as long as it’s available.
There are many other benefits to providing high quality leads as well. For example, many times advertisers only have a certain stock or advertising budget available, and will have a monthly quota that they give each network.
You can bet your ass that your affiliate manager will delegate most of that cap to you since they know you will make the advertiser happy. Remember, the affiliate networks want high quality too because they’ll lose big if the advertiser decides to pack up and leave.
How Do You Know the Quality of the Traffic Source?
Taste it. What does a good chef do when they cook? They taste their food.
There are various ways to determine the quality of each "ingredient", and it’s a necessity that you run the traffic and test (taste) it first.
One way is to create multiple accounts at your affiliate network (most networks don’t have a problem with this if you’re a reputable publisher) and run each traffic source separately to the offer, and then request a quality check on them from the advertiser after a couple weeks or so.
Another way would be to have the advertiser and your affiliate manager look at your SubID’s, if you’re willing to have them look at that, and determine things that way (although that isn’t always possible).
You could also send the traffic at different times. For example, you might send traffic from Network A for 1 week, then traffic from another for another week, etc.
Another method is to run the offer on multiple networks – just be sure that the path is the same and the advertiser is the same!
In the end, as I said before, you’ll know from experience which of your sources are high quality and which are low.
Be the Cook
Improve your lead quality to an offer by creating the perfect recipe of various traffic sources and campaigns. Remember, it can often lead to higher profits in the end by taking some losses via "investing" in higher quality traffic.
The more volume you do and as you continue to scale, the more that "mixing" or "cooking" in lead generation matters.
You don’t need to put in 100% high quality traffic – after all, that will likely not be profitable for you, but be sure to mix enough in to where the advertiser is happy with the overall quality.
First, the mandatory apology:
The only post I wrote in August was actually my affiliate marketing income report for July. Despite my lack of posting, I’ve definitely been working. In fact, I can’t remember the last time I took an entire day off from not working at all. Hell, yesterday was my birthday and I still put in some hours of work in.
As you’ll read about shortly, August was my worst month this year… by far. As a result, I was focused more on trying to keep a profit going on my campaigns and performing triage than I was on publishing new blog posts.
So, that explains my lack of posting.
Here then, are my affiliate marketing numbers (not inclusive of my other revenue sources) for the month of August 2013:
August 2013 Affiliate Campaign Income:
Ugh. From $142,606.00 in June to $64,950.00 in July to $38,702.00 in August. What’s next? $2,500 in September?
Traffic Source Breakdown:
- Traffic Source #1: $6,007.63
- Traffic Source #2: $2.60
- Traffic Source #3: $9,735.47
- Traffic Source #4: $14,381.32
At least my expenses were the lowest I spent all year…
I can’t tell you had embarrassed I am to have to post these numbers, after having so many better months this year.
But the whole point of these income reports is to share my results with you, whether that be good or bad. Affiliate marketing is a roller coaster ride as you can see, and I can’t expect the ride to keep climbing without ever seeing some drops.
In fact, there’s actually some good news to come out of this. More on that later on.
My ROI dropped dramatically in August as well, from 70% the previous month to a measly 28%.
Year-To-Date Affiliate Marketing Results
Despite seeing concerning drops the past 2 months, 2013 has still been a great year for me overall so far. In fact, it’ll be pretty hard for it to to lose that standing… the only way I see that happening is if I start pulling in some red months.
Here’s a monthly breakdown:
Man… August is such a blemish in my otherwise nice looking table.
It’s funny… because I had thought July was a horrendous month, but now it looks like so much compared to last month.
Net Profit Projections
The following linear projection is based off the past 8 months of data, and is projected for the next 4 months:
For the first time, the linear projection is on a DECLINE. That’s no good. Anyhow, rough projections show that December 2013 may bring in $25,000 profit.
Now let’s take a look at the running net profit total from my campaigns this year so far:
So this year so far, I’ve made $250K from my campaigns, and this time the projection is set for the end of the year. The linear projection predicts that I’ll finish the year at a net profit of just over $400,000. I hope it’s right!
These are just predictions though. My campaigns have really plummeted over the past couple of months, so we’ll have to see if the law of averages catches up.
Geez… where to start?
I think I’ll do this recap in point form to this time:
- Got mostly caught up with e-mail (currently down to 70)
- The vast majority of my campaigns died due to increased competition, offers going down, etc.
- Had my new programmer make me some basic custom software that gives me a huge leg up on some specific types of campaigns I run. Already paid for itself and will pay off many dividends in the future
- Managed to get some brand new profitable campaigns going. They don’t make much, but it is so important to be able to do this…
- Worked hard on some new landing page ideas, which definitely paid off
- Spent a fair bit trying to get new campaigns going. Been struggling in this regard, but did manage to get a couple new offers going at small profits.
- Had some server issues which caused some downtime and losses on my campaigns
The good news is that despite virtually all of my existing campaigns having died, that I still managed to get some brand new profitable campaigns going and end the month in a profit of $8,500+.
For September, I have 3 things on my mind. In order of priority:
Finish Catching up to E-mail
I currently only have 70 e-mails left to tackle. However, most of the ones left are fairly "involved" so they will take a lot more time and effort to deal with.
Once I finish my e-mail, I’ll have a "clear head" and will be able to focus 100% on doing my taxes.
With August being such as bad month for me, I really need to step up and work my ass off to try to get my campaign numbers up again. This is definitely easier said than done, but I do want to return to my 5-figure profit months.
I also want to modernize and sell some more of my websites, but I don’t think I’ll have time in September, so that will probably have to wait until October.
September Campaign Income Predictions
To be honest, I don’t think that September will be a good month. If I had to guess, I’d predict around $5,000 profit, and I wouldn’t be surprised if it was more like $1,000 profit.
Part of this is because I will need to spend a lot to try to find new profitable campaigns.
We’ll just have to wait and see. Check back on October 1st to see the results!
Now – how did August treat you for your affiliate marketing campaigns? Share your results in the comments below – I’m genuinely interested in seeing how things are going for others.