How Do I Make Money Online Part I: Affiliate Marketing

Welcome to part one of my new ten part series on Making Money Online!

“How do I make money online” is probably asked the most frequently asked question I receive from friends, family and acquaintances! Because of this I was originally going to write these posts for a new FAQ section that I planned to launch. I figured I'd write the answer once and direct people to the FAQ:) The only problem was that as I began writing it grew far too large for a simple FAQ entry. So I decided to make it a series of articles instead!

So how DO you make money online? The answer is easy to explain, but not that easy to duplicate. The simple truth is that there is no “easy” way to instantly make a livable income online. I define “livable” income as enough income to cover all your monthly living expenses, 2 vacations a year, have 6 months in “emergency” savings (there's no unemployment when your working for yourself) and enough to cover healthcare costs for you and your family/dependents.

The Goal

The goal of this series is to illustrate the most mainstream & popular ways that people make money online. It's not a cheat sheet thats going give you an “instant” method to “get rich quick” or cover your bills and expenses. Research, hands-on experience, and execution is what will really make you successful. Use this post as a guide to get you pointed in the right direction, so you can start planning out which method (or methods) are best for you!

Making Money Online with Affiliate Marketing

Affiliate Marketing is by far one of the most popular methods of making money online. It's also the way that most free content sites are able to earn a living. The role of an Affiliate marketer (aka Publisher) is to refer a leads or sales to a merchants in exchange for a commission. The commission can be a percentage of the sale, or a flat fee depending on the terms of the affiliate agreement. The most mainstream example of affiliate marketing is when you visit a blog and see Google Ads.

Let me be the first to tell you if you didn't already know - Google Ads are not the best way for a beginning affiliate to make an income. It's very hard to earn any “real” money, and you don't have total control over what is being promoted. The problem is that most people new to affiliate marketing aren't aware of the many alternative Affiliate networks that exist. An affiliate network is basically the middle man that manages Affiliate relationships for their vendors (aka advertisers or merchants) and provides support, handles payouts and delivers creatives (ad code, images, etc) to Publishers (you are the publisher).

Affiliate Networks

Affiliate Networks such as Commission Junction aka CJ, Neverblue and Pepperjam host a variety of offers from a wide assortment of vendors. The Publisher (you) are able to pick and choose what offers you want to promote based on category, payout amount and merchant. So if you had a technology related blog, you could choose to run ads from Bestbuy, Tiger Direct, Godaddy, etc that would more likely to be clicked on by your readers. This is in contrast to Google which chooses what ads appear for you. Google Ads do display ads that match your content, but THEY choose which vendors appear.

By choosing your own vendors and promotions you can also choose the offers with the highest payouts!

Delivery Channels

You can promote affiliate offers in a variety of ways. They all require different workloads and competencies. Some are very “hands-on”, time consuming and labor intensive, while others require more “brain” work, analysis and testing. I actually recommend using a combination of the different advertising channels so your income isn't limited to only one area. This way your always have a steady stream of income if things change, like they always do in this industry!

Content Sites

One method you can use to promote affiliate offers is by creating a content blog, such as dog lovers blog. Your job would be to produce entertaining and informative content, such as video's and blog posts for dog lovers to read and watch. If you promote it right and have good content it shouldn't be a problem for you to grow your readership to a healthy amount within a few months. After you've grown a large or loyal following, you could then start promoting affiliate offers for dog related products such as leashes, dog grooming supplies and dog food. You could directly promote the offers via a blog post, product review, eBook or an email newsletter. You could also indirectly promote offers via banner or text ads that could appear in your blogs header or sidebars.

Whichever method you choose, you should know that you now need to disclose that you are an affiliate prominently on your site or blog by law. The FTC has cracked down on “flogs” or fake blogs designed just to promote affiliate offers. This is why it's not wise to become an “affiliate whore”, or someone produces shallow content only designed to promote offers. You need to focus on producing unique, entertaining and informative content and build a good rapport with your readers. They'll be more likely to convert to buyers of the offers you promote because you've built your readers trust. They'll also be more likely to buy the stuff you promote because you know your stuff!

Pay Per Click

Pay Per Click or PPC for short, is advertising model where you pay your host or publisher (most likely a search engine) only when your ad is clicked. It kind of reverses your role into the merchant role, and makes the search engine into the affiliate. It is a pay-for-performance model: If the search engine does not generate any clicks, it represents no cost to you!

Here's how you make money from it:

(and these figures are all made up but used to illustrate how the process works)

You decide to promote an offer for Dog Leashes that payout $5.00 per sale.
You bid on the keyword “dog leashes” on Google which is $2.00 per click.
If someone clicks on your ad for dog leashes, and buys a leash from the vendor that you are promoting, you've MADE $3.00 profit. $5.00 Payout - $2.00 for the click. Turning a “click” into a buy is called conversion.
If someone clicks on your ad for dog leashes, and DOES NOT buy a leash from the vendor that you are promoting, you've LOST $2.00. (-$2.00 for the click with zero payout)
If 10 people click on your ad and only 5 buy, you've earned $25.00 ($5.00 x 5 purchases) and incurred $20.00 in expenses from the 10 clicks at $2.00 each. Your profit would be $5.00. Your earnings per click (EPC) would be 50￠ a click ($5.00 / 10 Clicks).

A 50￠ EPC might sound sucky, but if you scaled it up to 600 conversions per day you would earn $300 per day, or $9,300 per month!

Facebook Ads

Facebook ads is another channel to use you promote affiliate offers. Facebook is awesome because you can target your ads way more specifically than Google or the other search engines. You can target by age, gender, interest, etc which in theory get you better EPC's. But like all things in life it takes a lot of experimenting and testing (in other words, work) to get a good return on your investment.

In closing...

This is simplified summary of the way Affiliate Marketing works. There are many more factors involved and tools that you can use, but this article provides an accurate snapshot of its basic principles. I'll probably write a more detailed tutorial in the future that discusses affiliate campaign software, advanced terms and strategies. In the meanwhile, be sure to read part two of this series tomorrow where I'll show you how you can make money by creating a Membership site!

Quote this article on your site

To create link towards this article on your website,
copy and paste the text below in your page.

Preview :

How Do I Make Money Online Part I: Affiliate Marketing
Thursday, 11 June 2009