From $XXX to $XX,XXX a Month. What Changed?

July 13, 2013 Posted by Tyler Cruz
Paid Advertisement

Warning: Epic long post ahead (over 3,000 words)!

A few days ago, a commenter named Deron left the following comment on one of my blog posts:

"Awesome. I’d be curious to see a post regarding how you used to be in awe of the $xxx,xxx gross guys – and what the biggest factors were for you to also get to that point (test test test, abandon fears, more networks, etc.)."

I thought I’d dedicated an entire blog post to answering that question.

First, I’d like to point out that I am STILL in awe of any affiliate marketer who pushes big numbers. In fact, I wish affiliate bloggers would post monthly income reports like many used to some 3-4 years ago.

Seeing screenshots of those numbers is what inspired me to get into affiliate marketing in the first place, and is the single most important reason why I never fully gave up (despite years of relative failure).

I am a very competitive person and I love a good challenge, and so once I saw that others were doing 6-figures a month with affiliate marketing, it never really left the back of my mind.

And this brings me to my first of 6 reasons for how I turned things around, after years of failure:

I Never Gave Up

Don’t worry, I’m not going to go after-school special on you, but the fact is that if I had given up, I’d never have hit my best month ever last month ($142K gross, $52K net).

Most affiliate marketers fail not necessarily because they’re doing things wrong, but simply because they gave up too early.

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Hello, Photoshop

There’s a lot of luck in affiliate marketing (more on that later), but you can reduce the luck factor by throwing more stuff out there.

As a result, you need to be patient in this game because not every campaign you launch will work. And new campaigns will very rarely work right off the bat – they require a lot of optimization.

I believe I launched my first campaign in 2007. I choose the credit card niche because it was the highest paying niche with multiple offers I could find at the time. It ended up being an extremely lousy choice of a niche to start out with for multiple reasons (back then, there were still a lot of ringtone offers, and dating offers were $20 payouts!).

I never came anywhere close to breaking even on that campaign, and I quickly dropped it.

My first long-term ongoing campaign was for a rebill offer (which I didn’t even know was a rebill at the time because I was pretty clueless) which I ran with very little knowledge of what I was doing. Although, I had actually built my own crappy multivariate split-testing landing page script by hand for it.

It ended up doing quite well… although thinking back to it now I sort of cringe because if that offer was available today, I’d be able to absolutely KILL it (I’m sure I could do mid 6-figures a month with it).

But that offer eventually went down and I took another break from affiliate marketing. After a while, I got back into the game and tried some new traffic sources and various offers, never getting anything profitable going.

Eventually, I got a long-term campaign going for a As Seen on TV type offer that I ran on PPC search (mainly AdWords). I worked very hard on that campaign for a long time, which ended up being extremely tedious. I forget, but I think I was doing around $10,000 gross a month on it, but only profiting around $500. It was definitely not worth the tedious effort I was putting into it.

Anyhow, my point is that for a good 4 years I kept trying to make it in affiliate marketing. I’d try it off and on in bursts, but never really got anything going. More or less, I broke even with it.

I only started to see real success with affiliate marketing in December 2011 – around 4 years after I first gave it a shot.

If you try at something, your chance of succeeding is determined largely by how much effort and determination you put into it. If you give up, your chances of succeeding are literally 0%.

Exploration

Getting back on track here (my previous section was longer than I had expected), another reason for how I went from "stagnant" to "successful" is because I started to explore.

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By this, I mean that I wandered off from what I had been doing before (primarily PPC search and using 3-4 affiliate networks), and started trying EVERYTHING. I signed up to every affiliate network I found and looked through all their offers to see if anything special or different piqued my interest, and tried offers in niches that I had never tried before.

But most important of all was that I started to try scores of new traffic sources. A lot of successful affiliate marketers have since told me that it is important to really limit what and where you run and focus on making that work and only then to expand. I understand and agree with the logic behind that, but for me, I only saw success once I did the exact opposite and strayed away from what I had been using.

By using new traffic sources including everything under the sun from large PPC traffic networks such as Facebook down to direct site placements, I got a much better overhead view of affiliate marketing as a whole. I got to see the bigger picture of it all, and it let me compare how different traffic sources and offers differed from each other.

For example, one of the many small things I realized was that I could run and split-test things so much faster at other traffic sources simply because ads were approved either instantly or at least a lot faster compared to the 2-4 days it would take with my Google AdWords ads.

This isn’t to say that Google AdWords search is bad, because there are still a lot of guys banking with it, but the point is that I found other sources that were better suited to my personal preferences. I like to run and test stuff with near-instant results. The faster I can get data (both approval + traffic volume), the faster I can split-test and optimize.

If I hadn’t explored and strayed away from my original "comfort zone", I never would have found the success I have had with these other traffic sources such as Facebook.

Split-Testing

Ah, split-testing. The go-to phrase that all affiliate marketing bloggers readily point to for any tip or strategy.

But there’s a reason for this: it works.

Affiliate marketing is all about testing. That’s all it is. Yeah, sure, there’s creativity, analysis, money management and all that crap, but really the main thing is testing.

I knew this already from the very beginning. Before I even made my first campaign some 5-6 years ago now, I knew that I would have to test many ads and targeting and optimize things before I would find success.

But what I didn’t exactly realize at the time was just how much testing is really required.

There was a new guy who popped into the affiliate chatroom (check it out if you haven’t already!) yesterday who was asking for some help with his campaigns.

I asked him how many ads he had tested and this was his response (excuse my "chatroom" spelling/grammar):

<@tylercruz> how many
<duke_> 5
<@tylercruz> :)
<@tylercruz> Try 50 per angle
<@tylercruz> then run 3 new angles per day
<@tylercruz> eventually ull find somethign tha tworks
<ungodly> lol if you have the budget to accomodate it of course

While ungodly’s comment at the end is definitely true, the point I’m trying to make is that I used to be just like duke_ too. I’d test just a few different ads in a campaign. Little did I really understand just how big a difference finding that one "golden" ad can be.

For example, I used to run a campaign on this one traffic source which used just pure banners as the ad (no added textual or heading component to it). For some weird reason, I found it ‘fun’ to test as many banners as I could for it to try to beat my previous best CTR.

After testing 15-20 or so, I found a real good banner which outperformed all my other ones, and ended up being very profitable for me. The CTR of it was around 2.5-3x higher than the average banner. None of the other banners was profitable, and only this one particular banner made the campaign work.

Remember, this was approximately the 20th or so banner I had tried. If I had only ended up testing 19 and gave up, I never would have made that campaign turn profitable.

But it goes further.

Eventually, that campaign died due to competition, and I left it for a while. When I got around to working on it again (maybe 6-months later or so), I got back to testing new banners for it again. I tested 5 more. 10 more. and got up to my 39th banner. None of the new 19 banners performed better than banner #20.

But that didn’t stop me. I was stubborn and just kept testing new banners on this campaign, even though nothing looked like it would beat #20. Then, around banner #42, I finally found a new winner! It beat banner #20 and its CTR was somewhere around 3.5x better than the average banner. The campaign was once again profitable.

Fast forward to today, and I’ve found even better banners, which have CTR’s of around 5-6x better than the average banner.

Using Facebook’s average of 0.04 CTR as an example of the average CTR, that means that my "evolved" ad after many iterations of split-testing would be around 0.22% CTR on Facebook.

When I found banner #42 (not even the better ones I found later), I realized just how important split-testing was, and just how big of an impact one ad can make on a campaign.

Going through that experience really helped cement the knowledge that campaigns can turn from red to black with just 1 small change, and the only way to discover that is to keep testing away.

So to summarize this section – I already knew from the very beginning that testing was important. I just didn’t realize how much testing was really required.

Test. Test. Test. Then test some more.

Negotiation & Communication

About a week ago, I tweeted the following message:

"Oftentimes it feels as though affiliate marketing is 20% split-testing and optimization, and 80% negotiation and networking…"

So what do I mean by that exactly?

Well, let’s take the following example:

You see the exact same offer at two networks. It is the exact same offer with the exact same path, payout, and advertiser.

It’s a dating lead-based offer paying out $5, and you’ve already run it at Network A for a month, generating a total of $2,500 (500 conversions). You ended up breaking even on it (you spent $2,500 worth of traffic).

You spent a lot of time analyzing and split-testing it, and have optimized the campaign as best you could. Further improvement and optimization seems unlikely.

Believe it or not, but many affiliates would give up on the campaign right then and there.

To me, this scenario is definitely a profitable one, despite the campaign breaking even.

The first thing I would do if this were my campaign is contact my affiliate manager and ask for a bump on it. Let’s say she responds with "Sorry, but we’re already at slim margins as it is, we can’t go any higher".

Since I already ran 500 conversions to the offer, I would ask for the advertiser to do a quality check and re-evaluate if they could get me a higher rate. I’d also be sure to mention that I could continue to send them at least 500 leads a month, and likely a lot more with a pay increase.

Unless you’re sending really low quality traffic, most of the time the advertiser will be happy to give you a bump. As long as it backs out for them, it only makes sense for them to keep you on board as essentially every conversion makes both them and you (and the network) money.

The bigger the volume you can deliver, the more negotiating weight you have. This is especially true for the traffic quality (unless it’s a CPS offer).

Anyhow, let’s say that in this scenario, that the advertiser comes back and says yes to the bump, and the network hooks you up with a $5.50 CPA – a 10% increase. Right off the bat, you’ll have changed your $2,500 break-even campaign from $0 net profit a month, to $250 net profit a month.

You didn’t change your ads, you didn’t change your targeting – you didn’t even touch your campaign. All you did was negotiate a higher payout with the advertiser and network.

But let’s take this further.

As mentioned at the beginning, the same offer is at network B at the "street payout" of $5. You’re now currently getting $5.50 which is better than that, but why stop there?

Different networks take different margins, and for all you know, Network A may have been brokering the offer and wasn’t actually direct with the advertiser. You could approach Network B and say that you can deliver 500+ leads a month to this offer, but you’re currently getting $5.50 CPA on it and would need to have that beaten.

Depending on their situation, Network B may love to have more traffic on that offer and be more than happy to give you $6. If you get set up at $6, you’d now have taken your break-even campaign from $0 net to $500 net a month simply by shopping around and negotiating.

Now this is just one basic example and I know that some people think that this is "being greedy" and isn’t being loyal to the networks. Affiliate networks are out there to make money though, and so am I. Affiliate networks aren’t exactly charities.

Here’s my point – there is a lot to affiliate marketing outside of the actual campaigns. Negotiating and networking can be extremely helpful.

I talk to my affiliate manager EVERY DAY. I harass him constantly to get the latest information on the offers I run, find out what new offers are coming out, constantly ask for pay increases, request for new landing pages to be made or changes to an offer’s terms, etc.

I also contact my traffic sources – although not quite everyday. It is arguably more beneficial, in fact, to communicate with your traffic sources than it is with your affiliate network.

Constant communication with my affiliate networks and traffic sources really helped me to turn profitable.

Improved Tracking / Analysis

The penultimate reason for my jump in affiliate marketing success is due to improved tracking.

Now, before I begin, I want to first say that I love Wes and Nana from Prosper202 (which is why I still list them on my Recommended Resources page). They are good guys, and they opened up the world of detailed and complex tracking to affiliate marketers when they came up with Tracking202 and Prosper202 – both which have always been 100% free with no strings attached.

I originally started out on Tracking202, and have also tried Prosper202 and even the lesser known Tracking202 Pro (when that was available). For free, they are awesome, and many (perhaps even most) super affiliates still use them today.

But for me personally, my world changed once I switched to CPVLab.

Now, for lame reasons, I still have yet to publish a dedicated review of CPVLab, but you can definitely bet that you’ll see one from me eventually.

In my eyes, there are 3 main differences between Prosper202 and CPVLab. First, it’s not free. It’s priced at a one-time cost of $297, with optional upgrade costs of 1-year access to the latest versions at $147 a year.

Secondly, CPVLab is far faster than Prosper202. Running them on the same server, the speed comparison between the two is not even comparable – and this is based from before I was doing a ton of traffic.

Lastly, CPVLab is beautifully sleek and simplistic. It is minimalistic in design while managing to offer even more features than Prosper202. I can analyze campaigns within seconds (thanks again to the speed mentioned above) and know exactly what I need to do to optimize, and setting up campaigns or making adjustments to existing ones is laughingly simple.

Truth be told, back when I was using Prosper202, I actually ended up avoiding using tracking at all simply because it was such a pain to use. It took me forever to analyze data, and setting up campaigns with it took far too long.

Because of this, I never split-test landing pages or did things such as analyze day/week-parting simply because I wasn’t even tracking these things!

Once I used CPVLab and saw just how fast and simple it was, I was no longer afraid to set up and use tracking anymore. I split-test things left and right, analyzed the data, optimized, and was quickly on my way to making some nice money.

Will buying and using CPVLab turn you into an overnight success? I don’t know, but it nearly did for me. At least, it sure made everything a hell of a lot easier.

Luck

Lastly, there’s luck.

Nobody wants to talk about it, but the fact is that there’s definitely an element of luck in this industry. Sure, some people will talk about how it’s all skill and hard work, but that’s not exactly the case.

For example, 2 advertisers could submit the exact same ad to Facebook, only to have 1 advertiser have his ad approved while the other get it denied. One ad approver may have found the ad fine while another one found it to be against their TOS. The other advertiser may have ended up turning that campaign profitable as a result of that 1 ad approval, and pushed him into that direction further, finding a winning campaign, while the other advertiser was pushed away. That’s luck.

There are many cases where luck enters the equation, and I’m sure that luck helped play a role in my case as well. In what exact situations, I cannot say, but I am writing about it here because I think it’s important to acknowledge the fact that luck does play a role.

Now, this isn’t to say that affiliate marketing is one big luckfest and that’d you’d be better off buying a lottery ticket because that isn’t what I’m saying at all.

The more work you put into your campaigns, the greater the chance that you’ll find success. In a way, you make your own luck.

Ray Kroc (McDonald’s founder) may have said it best when he said:

"Luck is a dividend of sweat. The more you sweat, the luckier you get."

Conclusion

So there you have it. The 6 main reasons behind what changed my path in affiliate marketing around: I Never Gave Up, Exploration, Split-Testing, Negotiation & Communication, Improved Tracking / Analysis, and Luck.

For those of you still struggling, hopefully you can take at least 1 of the things I wrote about in this post and apply them to your own campaigns.

Good luck!

If you enjoyed this post, please consider leaving a comment below, subscribing to my RSS feed, or following me on Twitter.
Posted: July 13th, 2013 under Affiliate Marketing  

26 Responses to “From $XXX to $XX,XXX a Month. What Changed?”

  1. Dave Starr says:

    Great stuff, Tyler. It’s all laid out before us now, who will do the rreading, take the risk and most importantly actually do the work?

  2. Darek says:

    That’s one of your best articles Tyler ;)

    Motivational and well explained story. Since you mostly talked about your campaigns and that, I wonder how well does search engine traffic works for your businesses?

  3. Chris says:

    Very good Tyler! MHT’d for the archive :)

  4. Ungodly says:

    Oh snap, I’m famous! Nice post Tyler, what it all boils down to is going out there and failing your ass off repeatedly. In hindsight you will learn what not to do and what you will need to change on the next go round.

    Don’t give a half-assed attempt, go balls out with the most relentless assault you can muster.

  5. Sam Dhawan says:

    Thnx Tyler.. I always a pleasure to read the informative info you shared with your readers :) Appreciated for your time!

  6. RAP Steve says:

    What is the best resource, course, etc. for a newbie to learn affiliate marketing? I’m looking for a way to learn from other’s experiences so I only have to fail half my ass off instead of the whole thing ;-)

  7. Lucas says:

    Great Post Tyler!!!

    Is very inspirator.

    Regards!

  8. Riza says:

    I guess it isn’t about giving up too early for a lot of these failed marketers. Probably they just don’t have the financial status to stay on board, or they’re just being practical on not losing everything before giving it up.

    Whatever happened to everybody though, is another story. Yours is highly inspiring and like you, I still appreciate reading articles that boast 6 -figure income.

    Thanks for this educative post!

    Riza, Kingged.com contributor
    http://www.kingged.com/from-xxx-to-xxxxx-a-month-what-changed/

  9. UshaJi says:

    I agree a person who always explore new ideas and show’s full dedication and commitment in his work always succeed in life like.

  10. I do think newbies should master one traffic source and target one market/vertical so they don’t get overwhelmed.

    Focus on benefits not features

    CASHVERTISING – Drew Eric Whitman. I’ve said this here before, its a must read x100 times..

    I highly recommend CPVlab also.

  11. Money is attracted to speed. TEST LIKE HELL

  12. Deron says:

    Great read, thanks for the insight!

  13. Sean says:

    Rather than a focus on earnings, i’d be curious to see what your approach to creating content is…

    For example, do you pick a product and write unique reviews on it and try to gather as much info about it in the one place and do comparisons with competitor products etc..

    Or do you simply buy a domain, stick a landing page on it and hard sell the product, then direct traffic to that page?

    It would seem to me xx,xxx isn’t possible / sustainable unless you’re creating genuine value on the content front…

    • Tyler Cruz says:

      I don’t even use landing pages half the time – I just direct link.

      • Sean says:

        By direct link, you mean cloak an affiliate url?

        It’s my understanding that with the likes of Peerfly, default affiliate links are blocked, so the only possible way around it is to cloak the url…

        Which then means you run the risk of violating Facebook terms & having your account banned.. or maybe i’m missing something..

        • Tyler Cruz says:

          Direct link means I’m not using a landing page. I’ve never cloaked in my life.

          • Sean says:

            Got it & i don’t doubt you, i just seen that iframe redirects and what not are a popular method of ‘getting around’ facebook ad interns… even advocated by some affiliate networks!

  14. Kyle says:

    Tyler…who does your banners?? Outsource?

    This is one of my biggest hurdles as it takes MANY graphics / landing pages / banners in this industry and I am not a designer and I am hard pressed
    to find good designers that are QUICK and reasonable priced!

    Any suggestions?

    • Tyler Cruz says:

      I do all my own banners. I’ll either make mine from scratch, source them from the web and modify, gather as many actual offer banners as I can, and/or modify them.

      For certain sources such as Facebook, it’s mostly a matter of sourcing since the images are so small…

  15. joeynegros says:

    Tyler, you mention above that you’ve never cloaked – ever.

    I fond this a little hard to pallet. Your using CPVlab, which allows you to test landers and direct link – right?

    So for example, you are advertising http://www.fun.com

    CPVlab gives you a URL like:
    http://www.tylercruz.com/xxxxxxx=cid=2 and this is the URL you use in FB, cant you just change the URLS on the back end of CPVlabs – in essense cloak :) or redirect.

    anyway – great post. but why dont you cloak?

  16. Sadek says:

    Quiet interesting case study. Truly a person with great ability.

PeerFly

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