Supernatural Agency: Online business tales

May 30

The beginning of the end for affiliate marketing?

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We’ve had three major brands for whom we are affiliates end their relationships with us because we are located in NY State. Never mind the fact that our servers are somewhere on the West Coast and that these retailers have no brick and mortar presence in NY. Our totally dysfunctional and short-sighted state government decided that out of state e-commerce companies selling on the web in NY should pay our insane (8.5%) sales tax even though the law for mail order companies states that they don’t have to charge the tax as long as they have no physical presence in the state.

Apparently a website that does not even sell the products and does not physicaly exist here is now a cause for ordering merchants to pay sales tax. So, what about the millions of paper mail order catalogs sent into our mailboxes from out of state companies- aren’t they a physical presence? And since when are online media that advertise services on a commission basis (very common in print, radio and broadcast) a cause for claiming a physical presence?

I do not think this will hold up in the courts as it is a poorly though-out law filled with loopholes. In the meantime don’t plan on building an affiliate marketing business in NY.

Update: Two more merchants have sent notices specifically detailing that the NY law was the reason they were removing us, hopefully temporarily (as they said). Interestingly, Linkshare followed with a generic notice saying we had been removed for unstated reasons- I think they’re worried about losing a lot of other merchants if they get wind of this.

So, if Google has PayPerAction (PPA) programs in which they get paid when a conversion takes place should they be paying taxes? They have a big physical presence in NY.

This is the lid coming off a big can of worms…

Apr 15

If you want to make money with a blog pick your subject matter carefully

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Even though we put some Adsense units on this site we never had any expectations for them beyond a few clicks here and there. That’s because readers don’t come to this site with a purchase or product research in mind. The subject matter (Internet marketing and business) isn’t closely associated with buying.

Gawker Media, the big blog network, announced that it was selling off a few assets including Wonkette, a very popular inside Washington political blog that had over 5 million pageviews last month. With that kind of traffic you’d think they’d be crazy to dump an otherwise successful site. My guess is, that with a downturn economy, a site like Wonkette which never had a strong advertising model- readers go there for opinions and gossip, not shopping, was probably seeing a big drop in ad revenues. I’m guessing their CPMs were in the toilet despite the high traffic.

To make money with a site you have to choose your subject matter carefully. Is the information you’re providing something people seek during a buying process? Are the types of purchases associated with the site Internet e-commerce friendly? Things like books, jewelry, gadgets, courses and other high value, easily shipped, high margin products work best. Things that are heavy, cheap and have low margins like pet supplies, large appliances and groceries don’t cut it.

Is the subject matter information-intensive? If the buying decision is easy you can’t add enough value via a web site or blog. Look at the ads on general news, opinion and lifestyle blogs/sites- they are often big brand ads for cars, insurance and other generic subjects that are neutral in relevance to the content. These kinds of ads generate almost nothing in CPMs (measured in cents per thousand impressions) and contribute to banner blindness.

Getting a formula that delivers higher revenues requires something a lot of Internet media entrepreneurs don’t want to do: hard work. I’m in the process of inserting relevant affiliate text links into the hundreds of articles on one of our kitchen design sites. We have display affiliate ads but they draw very poorly. The text links are carefully chosen for very high relevance but it’s a lot of work:

Determine what the reader of the article is most likely to be interested in at that moment. I have an article that recommends getting material samples when planning a new kitchen. The reader wants to know where they can get these.
I go through the various affiliate programs and find a vendor that not only offers samples but pays out for sample requests, in this case $15 for a sample order (because they know that if you have a flooring sample you like you’re likely to order that specific flooring- resulting in a big sale). This takes a lot of time to research.
I build a text link with the affiliate code that includes the appropriate anchor text. Free Flooring Samples from XYZ, for example
I choose the appropriate place the article and insert the link text inline with the content. I don’t hide that it is a link (different color) nor do I hide the brand because I want it clear to the search police that I’m offering legitimate relevant content even if it is commercial. And I want the reader to know that I considered their interest, time and needs when selecting this revenue model.

This is a lot of picky busy work but when I’m done I’ll have an information site that is optimized for revenue-generation in a way that the consumer appreciates. And it is sustainable because once the work is done the site is self-sufficient. On to the next one…

Jan 01

Using existing datasources to create content (AKA ’scraping’)

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Scraping, a questionable practice involving writing code that goes out onto the web and automatically gathers data and content from sites, is getting a rethink in this Wired piece on legitimately accessing other people’s datasources.

This interests us because we’re working on using Amazon’s API, a legitimate access point for affiliates and on using RSS to feed content into portal aggregator sites. As a business rule we don’t engage in theft or ‘blackhat’ tactics- the RSS feeds provide relevant links back to contributing sites and Amazon gets new sales channels. What we’re not sure about are the search implications…

Dec 16

The Basics: Intent and relevance for domainers

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As recent observers and participants in the domaining world, but long time Internet marketers, we’re constantly surprised by the disconnect between pure domaining and search-friendly content development. Many type-in traffic domainers admittedly don’t care about search and are happy with the virtually content-free world of parking. This is fine if your model is thousands of names generating incremental revenue- it adds up nicely. However for a lot of us, particularly those with development skills and content (writing) abilities, there is another approach and it requires a basic understanding of the search model.

Search is based on two concepts, intent and relevance. The searcher broadcasts their intent by the keywords they enter into the search box. If you have the most relevant content match to their intent you rank higher on the SERP (search engine results page). This is the basis of SEO. So your first step is understand the intent of the searcher who is headed towards your site and make sure that if you rank and they click that they see relevant content. Parking pages won’t cut it in most cases. One common measurement is that there should be at least 600 words of relevant content including headlines, bullet lists and text (not embedded in images) on the landing page for your URL.

Now we understand that for a lot of people the prospect of writing 600 words is scary. But that 600 words is going to drastically increase the conversion rate for your site and the traffic stats. It also ensures that contextual advertising like Adsense will be a lot more relevant, increasing revenue. If you can’t or won’t write, hire a writer. While I am a writer, I have a lot of other things to do so I put an ad on Craigslist offering $25 for 600 words on a specific topic. I had dozens of responses and we’re not in a major market. That’s peanuts for something that can turn a url into a valuable commodity.

Writing is step one. Edit the writing to get your keywords into headlines, break up blocks of texts into lists or bullets and keep paragraphs and sentences short and sweet.

The next step is relevant monetization. Again ‘relevant’ is the key phrase here. The beauty of Google is that they reward Adwords advertisers for relevance by giving better positioning to ads that perform better. As a publisher (and that’s what you are if you take this path) then you want Adsense ads that closely match intent. Good content makes the difference. These ads will enhance the value of your site to the visitor.

Now for the next incredible breakthrough for domainers: API access to Amazon Web Services. With Amazon’s API (application programming interface) you can place Amazon content on your site and generate affiliate revenue, while maintaining that content as your own site content. You can choose what data to display (reviews for instance) and use keywords to automatically display products without manual selection. This means you can create shopping sites with a template and automatically populate them with relevant product offerings. Add your 600 words of advice and serve up the site on your domain.

If you’re efficient you could put these things up very quickly and see results that are much more valuable than any parking service. And once you’ve developed a portfolio of these automated content sites, you’re got a real marketable asset.

Supernatural Agency: Online business tales

The beginning of the end for affiliate marketing?

If you want to make money with a blog pick your subject matter carefully

Using existing datasources to create content (AKA ’scraping’)

The Basics: Intent and relevance for domainers

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