Tuesday, November 22, 2011

Note on Affiliate Marketing

For the last several weeks, I've been working on my affiliate links while fretting about whether or not the web site will make ends meet this holiday season.

I've spent a great deal of time on affiliate marketing because I think it is an honorable form of income.

Affiliate marketing is a simple game played between web sites. In affiliate marketing, web sites with a product to sell pay a portion of the sale to an affiliate web site that refers traffic.

It is a simple structure that holds the promise of distributing money through our social networks and web development efforts.

The major affiliate networks list over 10,000 merchants actively engaged in mass affiliation. There are thousands more engaged in private deals.

There are millions of web sites engaged in the market. So, it is a big thing.

Sadly, the market has a dark side with slimy operators pulling every trick in the book to steal commissions and engage in anti-market activity.

For example, parasiteware is a class of computer programs designed to steal commissions. Most of the browser helper objects and toolbars you find in cyberspace were designed to get commissions on sales. There are hosts of adware programs that infect computers like viruses in order to grab commissions.

WARNING: Many of the "anti-adware" products on the market are, themselves, adware.

There is good and bad in every industry. The way to improve things is to openly promote the good things we find and to steer clear of the bad things.

This is what I've been trying to do with the Community Color project. I want to make a living by emphasizing the good side of things.

In the early days of the Internet, I feared that big national sites would dominate and effectively crowd out local web development.

So, I decided to combine affiliate marketing with tools to promote local web development.

I put a quarterly summary my affiliate stats on the page:  http://afountainofbargains.com/merchant.html

The Community Color sites have had tens of millions of page views. From 2002 to Q3 2011, I sent 587,000 hits to affiliated merchants and have a reported income of $53,000.

The report shows I make an average of $1500 a quarter. A full time job at minimum wage is over $3700 per quarter.

This year I made the foolish mistake of upgrading to a cloud hosting account. I also invested in a smartphone hoping to learn about the mobile market. I increased my expenses to $500 a quarter.

The cloud account crashed in August. I had 6 weeks of down time during which I lost most of my inbound links. My income fell to under a $100 a month. (gulp). From November 1 to November 21, I've sent 1856 hits to affiliated merchants, but only made $2.32 in commissions. (I made $3.84 today bringing my monthly income to $6.32. (gulp)

Because of the crash, I've been working furiously on trying to fix the income structure of the project. I've increase the number of affiliate links. The page http://linksalive.com/slime.html shows the percent of affiliate to standard links. Yes, I call the page slime because my progressive friends consider any action that makes money to be slime.

The slime report shows that community directories tend to have a low ratio of affiliate to regular links. 4.2% of the links in Salt Lake Sites go to affiliated merchants.

Newer sites like ArizonaColor.us have a higher percent of links because I decided to add the affiliate links first.

The bottom line of the report says the directory has 22525 links with 2747 going to merchant web sites. That's about 12% of the links.

This directory structure sends a ton of traffic to community services and small web sites. Close to 90% of the traffic goes to free stuff.

Community stuff is good, but I happen to believe that making money is a good as well.

Look at the chaos that ensued after the financial collapse. In many ways, I believe that the web sites that have viable business models and make money do more for the community than those that are simply excercises in free expression.

Because of the web site crash that took place in August, I've been burning the midnight oil working on affiliate links.
I believe that affiliate marketing is a good thing that could help provide additional income to people in the middle class.

I think that affiliate marketing is something that we should promote, and not shun.

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