Bit of Pocket Cash
April 29, 2007 Posted by Tyler CruzYesterday I finished putting ads across many of my sites for a new advertiser I signed up. He wanted to buy a few text links on Movie-Vault, but had inquired on purchasing for a “longer period of time”.
I had responded by directing him to the advertising page, as I had assumed that he didn’t read it, since we offer up to 12-months of ad time. He responded by saying he already visited that page, and wanted to puchase for two years!
Wow.. in all the hundreds of various advertisers I’ve worked with over the past few years, I never had an advertiser ask for two years! I’ve signed up scores of people who purchase for 1 year, but never two.
Anyhow, I immediately saw this as yet another opportunity, and a couple days later, his ads are now spread across 7 of my sites, including: Movie-Vault.com, PokerForums.org, CookingForums.net, MovieForums.org, MMAForums.net, PublisherForums.com, and TylerCruz.com.
The total? $4700. I obviously gave him extra discounts for such a purchase. His ads are pretty unobtrusive on most of my sites, as they are just textlinks, but he understands his goal is purely for SEO reasons. Anyhow, the transaction was definitely fair for both parties and we’re both happy. While two years is a very long time, you may be surprised how fast it can go. When I have to renew a contract with a past advertiser who purchased for 1 year, it always surprises me how fast the year went.
Also, the ads are spread across 7 sites, many of them which could use more advertising, such as my smaller forums mentioned above. Which of course, probably wouldn’t have been purchased if I didn’t have a bigger site to first lure in a potential advertiser. That’s one advantage to owning a little network of sites right there; advertising you may have normally not received.
Yes, I know $4,700 isn’t a lot of money, but it also shows how, while PokerForums is definitely my flagship, that it’s also not 100% of my revenue. If you take things such as this $4,700 and add it with other side things such as my Halflife.org sale at $2,250, you’re already at $7,000. Bits and pieces such as this add up, and allow me a bit of breathing room to put into new or existing projects.
Okay, enough rambling…
I took a little bit of a break yesterday, driving down to the tip of the island with my girlfriend for a couple hours to go to a Korean restaurant. Unfortunately the only korean restaurants on the island are in that one city, and I had a craving…
Oh, and I’ll try to give an update on my affiliate marketing adventures tomorrow. Apparantly AZoogleAds messed up which is partly why my conversion rate is so low. I’ll be getting compensated on Monday 😉
Take care of your money, and don’t forget that Google don’t like to much paid links.
Nice one tyler, it’s good to see that you’re making good money outside of pokerforums.
Two years is a long time – on reflection I think I would have charged more for this rather than offer a discount.
What if your site(s) become four times as successful over the period, you have new advertisers willing to pay through the nose, but your hands are tied into a long term contract?
It’s almost like an incentive for you not to work at making your sites more successful!
I agree with Martin. Pretty stupid move.
Stupid tends to follow Tyler.
Yup, it is a long time, and he got a good deal, but it’s also very worth it to me. Again, the ads aren’t all that prominant. The most prominant one is here on TylerCruz.com, and I should have priced that a bit higher, but you’re also forgetting that in return I’m receiving a lot of capital cash up front in return for (basically) a non-renewable resource for me.
If you take the equation that a site sells based on 12-months income, that means I could buy an existing site with the ad money, that is making $400 a month.
That’s an additional $9600 during those 24 months, and then $400 a month profit thereafter.
But if you guys think it’s stupid, that’s your prerogative.
@Rob – Nice informative responce there Rob, Don’t get jealous about Tyler’s success and be rude, Can you explain how exactly “Stupid tends to follow Tyler.” ??
I don’t see why anyone would decline the $4700. If the sites get popular you can always create more ad spots. A text link is also hardly any space at all.
Success?? Hahaha, you need to go out more
[…] Bit of Pocket CashYesterday I finished putting ads across many of my sites for a new advertiser I signed up. He wanted to buy a few text links on Movie-Vault, but had inquired on purchasing for a “longer period of time”. I had responded by directing him … […]
Stupid? Far from it. Money comes and goes, but good networking will stick around forever. So in two years if Tyler’s sites are 10x more popular, do you really think this guy is just going to up and leave after his contract expires? If you do, then stupid follows you. What more than likely will happen is that this customer will become a repeat purchaser. And everyone knows a repeat customer is much easier to work with than a new one.
Hi Tyler – I hope you didn’t think I was calling you stupid in my post! I know you often get a lot of unjustified negative comments on your blog – I was merely voicing my opinion, which I think was professional and constructive. Please don’t associate me with the ‘Tyler Bashers’!
Tyler bashers lmao thats a new one on me! Congrats on the sale 😉
You have to take on online marketing like eating and elephant one bit and a time but all of it ads up and before you know it the elephant is gone….
many people want wealth and riches immediately but you will find there are highs and lows but key is take and vantage of the highs and learn from your lows so you dont repeat them.
I think this could be considered an investment. Its like winning the lotto, all at once or in increments. Either one could yield better results than the other its more a matter of what you do with the money (how you invest it). It’ll be awesome to see what Tyler does.
@the stupid commenters. First rule any businessman must learn. You never turn down cash when someone is handing it to you up front. I think it’s a smart move. $4700 now can be grown into much more by investing it in more sites. It’s not like he can’t keep adding text links.
Here is what I’m really interested in though. I’m interested in your business process. You mention a 2 year contract. I’m interested in how formal this is and how you negotiate it. Is this a legal contract with lots of stipulations sent through the mail or what? Can you shed some light on the details of how you do these deals and the level of formality? I’m very interested in knowing.
“First rule any businessman must learn. You never turn down cash when someone is handing it to you up front.”
Actually, I’ve never once heard that as a ‘first rule’ let alone a rule at all. This sounds like someone who is a wanna-be successful business person throwing around some stupid quote masquerading as wisdom.
Cash up front is never, as a rule, better than a cash trails. It is all about being able to analyze time value of money along with other risks (default, etc) to guage what method of monetization is best.
Marc,
If you haven’t read my post on Private Ads: Building Strong Advertiser Relationships (https://www.tylercruz.com/private-ads-building-strong-advertiser-relationships/), that should answer most of your questions.
As far as formality, it depends on the advertiser. Usually when they work for an advertising agency or marketing company, it’s a bit more professional and straight forward and through e-mail.
Others, the majority, are very casual and nice, and we often do it on MSN or AIM. In this case I did it on MSN and it was very casual. I mean, he advertises gambling and adult so… 😉
As for as legal contracts, most want an IO, so I have ones made up from before which I modify for their specific needs. I have a letterhead and everything in it and my bank wire info and other payment details, etc.
Good move!
$4.7K up front is best!
Look, here are two good reasons why up front is best…
1.) the advertiser could be out of business in 12 months but Tylers still got the cash
2.) Tyler could double that money in two years
….and because potential advertisers see one customer buying ads for two years, they have the confidence to treat the network as a good long term bet, improving the reputation of the network and enabling the network to command higher advertising rates in the future
Good luck!
I’d remove the bit from this post about selling the links for SEO purposes that could not only hurt the buyer but you 😉
“Cash up front is never, as a rule, better than a cash trails.” Cash trails?? Is that a technical term that I should be aware of? No, as a rule, unequivocally, CASH UP FRONT is better. Uh, you should learn that in Accounting 101. Look it up. The real point is salesmanship. Close the deal. There’s always more inventory. Yes there is always more. If there isn’t then you have other lessons to learn.
@ Rob: Tyler makes a huge flow of money every month, I think he thought this through before making a decision. Tyler is a smart guy who knows what he’s doing.