What’s Affiliate Marketing and CPA Marketing?

Affiliate marketing is a channel or method where advertisers (also known as merchants or product owners) recruit partners to help them:

• Generate prospective customers OR
• Pre-sell them on the idea of buying the product OR
• Getting involved in the sales process themselves

Depending on the advertiser you’re working with, you might be known as an affiliate/affiliate marketer/partner/associate/reseller.

You might be paid on:

• The number of prospects generated (lead generation) OR
• The value of products bought (revenue share/pay-per-sale) OR
• On an ongoing basis receiving regular payments as long as the customer continues the product/service. (continuity/rebilling/subscription)

CPA marketing or Cost-Per-Action marketing is primarily focused on the lead generation aspect of the business. You might receive a $30 payout on a $4.95 trial by the customer. The advertiser is able to recoup their commission payout to you by selling a premium product on the backend (as a product upgrade), or enrol the customer in a monthly subscription.

Hence, for many new affiliates, the CPA route might be easier to get started.

Payouts are typically related to the amount of effort needed to get the lead/prospect to take an action.

For submitting their email address or zip code, it might be $0.50 – $2. For activities requiring more effort, such as filling in a request form, or purchasing a trial pack or product, it could be upwards of $100.

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Evaluating Affiliate Networks

The majority of affiliate networks use DirectTrack, a software developed by Digital River. One issue with Direct Track (DT) is that some spyware detection/protection software identifies DT cookies as spyware and hence removes it. Because your commissions are tracked by the cookies embedded in a user’s browser, having the cookie removed means the action/sale can’t be tracked to you, and you won’t receive credit for the sale.

There’re currently more than 350 affiliate networks (about 5-10 major networks and about 300+ small outfits) in the industry.

There’re also a number of merchants (large and small) who offer their own in-house affiliate programs (such as Amazon and the eBay Partner Network), so affiliates will sign up directly with them.

For a list of affiliate networks I work with and recommend, you can check out the Affiliate Network Review resource page.

Getting Started As An Affiliate

Here’s the major problem for most new affiliates – getting too bogged down buying educational courses, reading blogs and forums and going to tradeshows, seminars, meetups – without ever actually making much progress in starting or putting enough time into their own campaigns.

Here’s a tip: Get started today.

If you’re new to the industry, you might try setting up a personal blog and apply to affiliate programs which are easier to get into (the Amazon Associates affiliate program is a pretty easy starting point – note: they have recently discontinued some forms of promotion, so be sure to read their terms and coniditions carefully).

Another tip: Sign up via an existing affiliate’s link then drop them an email

If the affiliate knows you, they can put in a word to their affiliate manager and this might increase your chances of getting accepted into the affiliate network (note: it may not always work).

If you’re like to go with this strategy, you can check out the Affiliate Network Review page and drop me a note via the Contact form, including your full name, email address used in the application, plus some information about yourself and your experience.

Credibility is a very important element if you want to go along this route, so it’s important to promote quality programs on the reference site you might be using. Including things like ponzi schemes or poor quality/scammy offers on your site will be a surefire way to get your application denied.

You can also follow up with a phone call to the affiliate network via their phone number which helps a great deal.

One great way to get started as an affiliate, especially if you’re based in Singapore is to participate in the WhoIsAndrewWee.com affiliate challenge (sponsored by Market Leverage), which is specifically focused on Singapore-based affiliates.

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In the next Affiliate Marketing Tips: Researching niches and evaluating affiliate offers

In 2007, he divested his retail businesses, taking the plunge into affiliate marketing.

Along with his experience in operating a business, he’s also skilled at copywriting and has done a number of offline promotion campaigns to generate leads for his affiliate marketing efforts.

I invited Josh on the Friday Podcast to talk about his strategies in building up his retail business which sold products on eBay, Liquidation.com, Overstock, Amazon, and even flea markets.

Having to deal with physical inventory has taught him the importance of managing his cashflow and he shares a number of these techinques during the podcast.

He also talks about the business management aspects of starting and growing your online business, together with the related topics of his copywriting influences and various offline promotion campaigns he’s worked on (which he affectionately calls “Chaos Marketing”).

Check out the Friday Podcast:

Links:

• Josh on Twitter
• Josh’s AffiliateFamous blog

Internet marketer Steve Schaffer who was also at the booth mentioned that Amazon’s lack of analytics was hampering the efforts of affiliates.

Amazon affiliates will realized that tracking is limited to a maximum of 200 tracking IDs (which need to be created through the affiliate panel), preventing the insertion of tracking IDs.

PPC affiliates or other affiliates which dynanimically insert tracking data within the Sub ID field will find their marketing efforts seriously hampered by this.

The feedback from Zahid was that “affiliates have not requested this”.

What?

I’m not sure if Amazon is seriously listening to this, but I don’t think they are actively soliciting affiliate feedback to enhance their systems. The end result is that a growth in affiliate revenue will benefit the company.

Routinely conducting affiliate polls or focused interviews would seem to be the basis for a quality improvement program. And if it is in place, it certainly needs to be overhauled.

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Another insight: There are no plans for an increase to the 24 hour duration of affiliate tracking cookies. And if it gives you any consolation, eBay’s 7-day cookie was cited as a comparable benchmark.

So, if you’re conducting any element of follow up marketing, via email or other means, there is a chance you’ll not be renumerated for your efforts.

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If you’re already an Amazon affiliate, this will not really be news to you.

With affiliates contributing 25% towards Amazon’s sales, I’d consider it a viable sales channel and would think that they would put more into the equation to make it an attractive program for affiliates.

Asked: “Did you really make (former Chrysler CEO and Ford President) Lee Iacocca cry?”

The Donald answered: “No, he made himself cry.”

Another question:

Amazon.com: Was there ever a time when you didnâ€t think big enough?

Trump: I don’t think so. I always had big plans, even when I was very young. I would build skyscrapers with my building blocks.

And finally:

Amazon.com: You’re critical of the “give me” attitude that you see in many young people today. What do you look for in a young person you are bringing into your business?

Trump: They have to be eager to learn and willing to work hard. I work hard and I expect the people around me to have a strong work ethic. I need people who can be part of a team and yet be able to think independently. That’s one of the qualities I look for on The Apprentice–they have to be capable of both dimensions.

This is part of Donald’s book “Think Big: Make It Happen In Business And Life”. A new reprint edition came out a couple of weeks ago.

Though some may consider Donald an egotistical, self-serving businessman, there’s no doubt that he doesn’t pull the punches, especially as he’s venting his disagreements with Martha Stewart and Rosie O’Donnell.

He goes on to say how he’s “been able to date (screw)” beautiful women.

I had a great time going through his previous books “How To Get Rich” and am working through “How To Think Like A Billionaire”. He certainly isn’t known as The Donald, or by his last name, Trump, for nothing.

“Think Big: Make It Happen In Business And Life” has been rated on of his best books and I’m looking forward to checking it out.

While Amazon’s prices are some of the best around, having the books shipped around the world incurs significantly higher shipping charges that I’d rather spend on more books. I’m building up my booklist that I’ll be filling on my next trip to the US (likely in January for the Affiliate Summit).

Some of the other items on my shopping list include:

* Dan Kennedy’s Ruthless Management Of People And Profits

Dan Kennedy’s Marketing To The Affluent

Both of Dan’s new books which were published earlier this year have received high praise from my inner circle. A member commented that implementing a couple of techniques from “Marketing to the Affluent” has given a boost to his company’s sales.

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I also noticed that Amazon is doing a promotion on Amazon Prime till the end of October.

This service allows you to get items shipped to you within 2 days for free, or for 1-day shipping at $3.99 per item.

If you are continually investing in your education by buying books often, the Amazon Prime trial (Where you enjoy the benefits of Amazon Prime for free for a month) more than pays for itself.

Askville is a site where users can ask questions and get answers.

It’s a little different from similar sites out there with a “ranking” (level?) system for users, and there’s an opportunity to earn “gold”. Additionally there’s shopping engine features built in with product recommendation.

Do contributors earn commissions or “gold” if readers buy the recommended product?

I’ll need to delve deeper into the site to get the answers.

But since late last year, internet users have been asking, “Is Amazon’s Askville just another Yahoo! Answers”?

Yahoo! Answers is also a community centered around user generated questions and answers, and participants get to vote for the best answer. Being an earlier product, it doesn’t appear that Yahoo is geared towards promoting products, or generating commissions.

They have a comprehensive and somewhat complex Points System.

Although I think the rationale behind needing points to ask a question, and then answering questions to earning points to ask more questions can become a little self-serving, even though it has the motive of creating a type of points-based information economy.

Yahoo! Answers is perhaps best known for the fact that Dr Stephen Hawking (author of “A Brief History of Time”) posted his question “How Can The Human Race Survive The Next Hundred Years?”

The question has since evolved into having it’s own Yahoo! group as well as Yahoo! Answers admin verifying the identity of Dr Hawking.

I guess it’s easy to forget that search engines are perhaps the ultimate “Question and Answer” databases. You enter your question into the query field and get back relevant results.

It does help to have a more human friendly interface like Microsoft Live’s Ms Dewey website:

MsDewey is a smart alecky, flash-based search engine, developed by Microsoft.

It features an animated avatar “Ms Dewey” (played by Indian-Dutch actress Javina Gavankar)

I believe it’s intended more as a technology showcase, or a viral marketing device, more than a serious search engine contender.

BUT,  unless you’ve been in the industry for some time, you might not recall the AskJeeves search engine, where you were “served” by a butler named “Jeeves” (named after a character in P.G. Wodehouse’s novels).

It’s now become Ask.com:

Which has seen the butler Jeeves dropped from it.

In case you missed it, here’s another look at Jeeves:

Industry observers might be wondering if Amazon’s Askville will have much of an impact in the question and answer market.

Although that’s an important question, I think affiliate marketers will be more concerned about how exactly to monetize effectively off these services.

Yes, you’ve seen instances of affiliate link dropping on these services, but I think that approach goes completely against the “user contributed content” and community nature of these sites.

My team and I have been developing a number of interesting strategies which might help you boost your earnings and we’ll be covering that in a future post.

Stay tuned.

Besides your finances, the other major constraint for any Internet marketer is time – there’re only 24 hours in a day.

And Amazon’s new outsourced service boasts a few interesting innovations…

Amazon’s Turk moniker comes from the “Turk” chess playing machine which toured 18th Century Europe, seemingly beating chess players. It was later revealed that a human player hide within the contraption. (Maybe a clever “ghost in the machine” or Ex Deus Machina jibe might be apt…).

So how does the Mechanical Turk differ from the other freelancer services like elance, rentacoder, workaholics et al.

The rates seem pretty cheap. Each HIT (or Human Intelligence Task) has a time rating and a cost rating.

I’ve seen tasks get farmed out for $0.01 for an hours work.

Take a look:

$0.09 for an hour’s work entering UPC (universal product code) information from food cans in your kitchen.

I guess it might not be too shabby for someone staying at home or in a less developed country where the median monthly income is about $100.

So the base rates are pretty low (although as the service gets popular you could expect it to get higher).

The other innovative feature is an API (application programming interface) which allows you to batch submit jobs to Mechanical Turk.

If you’re compiling keywords for a PPC compaign, you can automate quite a bit of work.

If you’re a direct mail marketer, you can get quite a bit of work done too.

I’m not sure how telco connections would be like, but I’m thinking you could buy your outsourcer skype credit and get them to do some phone work for you too.

Given Amazon’s data mining technology given it’s vast book and other product inventory, tracking and analytics on the outsourcers. It’s mentioned that “Requesters (the person giving the job) can specify that people who work on their HITs must first complete a qualification test, giving Requesters the opportunity to vet the skill level of the people working on their HITs beforehand.”

The freelancers are aged 18 or older and must have an Internet connection (I guess some of them might be on dial-up….)

How much does the service cost?

From their FAQ, Amazon “collects a fee of 10 percent on top of what Requesters pay to have tasks completed. For example, if a HIT pays $0.20, Amazon Mechanical Turk collects $0.02. The minimum commission charged is $0.005 per HIT. ”

I would not suggest that any Internet marketer start doing HITs, your time is better spent doing something else. The list of tasks outlined is quite insightful…

How do I use the Mechanical Turk?

You need a US billing address and bank account. Or if you’re an individual, a US driver’s license (incidentally I earned my US driver’s license in about 7 days, so take a 2 week holiday if you don’t live in the US or register a US corp…)

Is it any good? Mechanical Turk is a subsidiary of Amazon and the Turks are being used on projects like Amazon’s A9 search engine.

I would think the Turks should be good for article submissions, directory submissions, possibly content rewriting and a lot of the ‘grinding’ type tasks.

For more information, visit the Amazon Mechanical Turk website.

Rather than recycle subjective opinions from blogs and forums, I went to Nasdaq.com and pulled eBay’s financial stats.

San Jose-based eBay has certainly come a long way from its beginnings as a sole proprietorship in 1995.

In case you think it’s only holds sway as the dominant player in the auction space, think again. The addition of electronic payment provider PayPal and Internet telephony VOIP (voice over internet protocol) provider Skype, means that it is a force to be reckoned with in the e-payment and communications arena too.

The financials show that the 30% year-on-year growth to sales of $5.96 billion in sales last years and a $1.125 billion net profit, mean that it’s position as a digital exchange for products and services is pretty much cemented.

Especially when you look back and see two major initiatives in 2004:

• The $153 million purchase of Germany’s Mobile.de, the biggest auto classifieds Web site, which brought eBayers a choice of 800,000 used vehicles
• New York States choice to auction surplus items on eBay, rather than conduct its own auctions.

These and more recent intiatives have helped build up eBay’s standing.

In a recent IDC (International Data Corp) report “The State of the Consumer Digital Marketplace (Mar 2007)”, the “most important Internet companies” were analyzed, and the listing included:

• Amazon.com Inc
• eBay Inc
• Google Inc
• Time Warner Inc.’s AOL
• Yahoo! Inc
• Microsoft Inc.’s Online Services Business (OSB), the former MSN
• News Corp.’s Fox Interactive Media (MySpace)

What turned the tide for me was hearing from eBay specialist Adam Ginsburg during Matt Bacak’s Marketing Madness in Atlanta.

Adam’s sold $20 million worth of pianos on eBay, and has gone on to buy and sell houses and properties on eBay.

Information marketers stand to gain leverage from listing and marketing their products on eBay, simply because it’ll continue to be an undeniable presence on the digital landscape. It could very well become the next search engine, offering goods and information for sale.

While there are a number of Internet Marketers on eBay at the moment, it hasn’t accumilated the awareness and mass of a Stompernet or CMS Infusion product launch yet.

The marketing techniques used on eBay seem fairly basic.

This only means that visionary Internet Marketers, the eBay playing field is largely untapped and could prove to be very lucrative.

Is it really as good as it seems?

I was looking for materials to build a business and to run a success auction.

A search for eBay training products shows more products dealing with dropshipping or “How I became an eBay powerseller in XYZ days” (powerseller being the designation for a high volume seller).

I wasn’t able to find a specific product to recommend, but Amazon has a good selection of eBay resources.

Alternatively, I found this offer to get an eBay Auction Success Kit free (you have to pay a nominal postage and handling fee). [Note: limited to US residents only]

So what’s happened since the launch?

In Jan, when WebProNews announced the Amapedia launch, early feedback was along the lines of:

The site looks pretty raw currently and has little info in it – it is after all brand new.

And now nearly half a year later, I find 15 product reviews on the site, none of which are particularly inspiring. Worst still, some product discussions haven’t had an update in 55 days.

Ghost town?

For sure.

Critics will question, Is it even a worthwhile exercise for the mammoth online retailer?

Let’s look at the demand for Wikipedias, or user-contributed content sites:

So there is high demand for online information reference sites.

And the chances are, once you’ve discovered wikipedia, you’re likely to bookmark or keep it in mind, and head over there to bone up on unfamiliar topics.

I’ve gone over there a number of times in the course of my blogging and site development efforts to fact check or build up my background knowledge.

So where has the story gone wrong for poor Amapedia?

The site design certainly looks polished and is consistent with Amazon’s branding and consistent sitewide design.

I do find the user interface a little clunky though.

The Wikipedia I’m used to is fairly text-heavy and has little in the way of design gimmicks.

It’s utlitarian in the way of “enter key phrase in search box, hit enter”. I don’t use burn any neurons trying to find categories or figure out how to search for stuff in Amapedia’s case.

But I think the biggest obstacle is a lack of buzz for Amapedia’s efforts.

History has shown that websites with really horrible interfaces, and poor design can survive, provided there is something compelling.

I have been on more than a few forums and social community sites where the design and interface has been nothing short of dreadful, but I’ve stuck around because the people were interesting.

Text Link Ads not too long ago, enlisted the likes of Neil Patel and Cameron Olthuis to spice up the Link Building Blog and have generated a community of readers and buzz.

Can Amazon do the same too?

They’ve already dumped the idea of plogs (a kind of product blog) in February. So what next?

Maybe Amapedia could hire the likes of celebrity gossip maven Perez Hilton or the folks at gadget blog Gizmodo to contribute interesting content to shake things up. Give Amapedia some personality.

But I think the biggest lure Amazon could go with is with their most valuable asset: Amazon credit vouchers.

If you remember back far enough, Amazon used to give away $10 credit vouchers like water when they first launched.

It certainly worked very well and I’ve racked up a couple of thousand dollars worth of purchases from Amazon over the last couple of years.

A lot of it had to do with the initial exposure and liking for Amazon’s interface and more so their customer service (I typically received an answer within 24 hours, and sometimes as short as 6 hours).

Awarding quality Amapedia content contributors is a less expensive route than taking on hired guns for content creation. More so, incentivizing Amapedia contributors builds site stickiness and organic growth will occur.

If something is going to happen, it needs to take place soon, because the web is already evolving at a rapid place, and the marketplace is unforgiving of slow pokes.