In this issue of the Stomper Update:
1. The "Google Cash" days are over.
2. What's the BEST way to make money online now? Sell real products to real people (analysis below). Join Andy and me in Miami and go from 0 to 60 in just two days!
3. SEO Pro Update: Date and Location Finalized for the "How to Be a Professional Search Consultant" One-On-One Training Program
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Welcome Stompers,
Remember last year's Florida update? Google made major changes to its algorithm right before Christmas and and kicked out 60% or more of the sites that had been in the Top 100 for many commercial keywords. Many online merchants were crushed right before their holiday buying season.
This year, Google played a little nicer.
First, they left the organic (free) search listings alone. (Thanks, G!)
Second, they leaked rumors for months that only one domain per keyword would be allowed. That means that affiliates bidding on AdWords would no longer be able to link directly to the sites of the merchants.
Third, when they finally announced it, they waited until after the start of the new year. (It just took effect in the last couple days.)
Fourth, by all objective standards (and the most important "user experience,") this change was a good thing.
The interesting thing to me is that for the first few days many commentators couldn't decide if it was a good thing or a bad thing for those affected by it the most -- affiliates and merchants.
Specifically, Google changed their AdWords policy so that only one ad will display for any one "displayed URL" for any given search term.
Huh? Simply, this means that when you search for, say, the title of a book, only one ad can appear that shows Amazon.com as the URL in the ad.
Here's a link to Google's new official AdWords policy.
However, if you search, e.g., seth godin, right now, there are two Amazon ads that display. One URL shows amazon.com and another shows amazon.com/books. I checked with Google, and they say that's only because the changes are still taking effect. Ultimately, only one root domain (i.e., "mydomain.com") will display for any given keyword search. Of course, it was already the policy that the "display URL" had to actually match the URL that users were directed to. In other words, you can't just redirect the user from the ad, to your domain, to Amazon.com with your affiliate link.
But you'd think those affected would know at least whether the change is good or bad.
For Google users, it's certainly good. You see a lot more variety of ads rather than a whole page filled up with ads for the same merchant.
For merchants and affiliates, however, it's a mixed bag. If you've been playing the affiliate game by building your own web sites and paying for clicks to your site, and then sending the traffic off to merchants' sites with your affiliate link, it's a home run. Your competition just shrunk dramatically.
On the other hand if you've been playing what some call the Google Cash game (after the e-book of the same title) by just buying clicks and linking directly to merchants' web sites, you're practically out of business. If you're not familiar, this was a popular game of arbitrage, whereby affiliates would buy traffic from Google and just send it directly to the merchant site via their affiliate link. The profit of these arbitrage players was simply the difference between the gross affiliate commissions and the cost of the clicks to send the traffic.
If you haven't played this game, you may be surprised at what some people were doing with this method. One friend of mine had his best month ever last month -- over $1 million dollars in gross affiliate commissions in one month. Even if the cost of the traffic was "most" of that, it's still a good month! (Before you scoff, realize that Dan has been doing this for a long time and has a sizable staff running all their programs.) But if you want to learn about making money in the affiliate game, he is one of the best people you can talk to.
In fact, I am trying to talk him into doing a teleseminar for Stompers. Now that his system has been mostly destroyed by Google, it won't hurt him to divulge every detail of what he and his partner did for the last couple years. It's an amazing story and there is still a lot you can learn from this expert AdWords practitioner. (For a preview, don't forget to listen to Search Engine Radio every Tuesday at 12:00 p.m. Eastern, 9:00 a.m. Pacific. Dan is going to be a guest on the show in the next few weeks. Or you can always listen to all the shows in the archives at www.seoradio.com.)
So the bottom line for affiliates is that for practical purposes you can no longer link directly to the merchants' web sites. (Of course one ad will always display, but too often there's one crazy guy that's bidding too much, losing money and doesn't seem to care.)
Better to spend your time creating unique landing pages with your own content and linking visitors to the merchant site from there. By the way, some commentators have noted over the last couple days that smart merchants will start creating landing pages for their affiliates to host on their own domains, similar to the way they used to provide banners for their affiliates. The problem with this is that the content of your "landing page" or "landing site" must be unique. A merchant can't just provide the content, robust as it may be, to their affiliates.
Each affiliate must create their own unique landing page with unique content that "adds value" (in Google's words).
If you're a merchant with a lot of affiliates, you're probably not happy. Some companies, like Zappos.com, that had a ton of affiliates linking straight to them, are probably taking it in the shorts right now. Others, where their own ads were getting blocked by so many affiliates linking to their competitor, are probably happy to be back in the game.
Regardless of how this change affected you, if at all, I think the Google Cash Crash illustrates what I have been saying for some time. For making money online, there's nothing like selling real products to real people. (Read the next section for my reasons why.)
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Besides selling real (physical) products online, there are basically two options for making money on the internet. You can sell information products (e-books, CD's, videos) or you can sell "nothing." I mean you can be an affiliate of other companies (that sell one of these two types of products) and get paid for basically driving traffic to their site.
Here are three reasons I'm a big fan of selling real, physical products online.
First, you can have your own affiliates. Affiliate programs are a key part of online marketing for many reasons, mostly related to leverage. Like buying real estate with other people's money (OPM), having an affiliate program allows you to make money with OPT (Other People's Traffic). That's why some of the most successful internet marketers, like Corey Rudl and Yanik Silver don't care about search engines. If you have 50,000 affiliates selling your stuff, you don't really care where your one site ranks on Google.
If you "own the store," you can build up your affiliate base over time until you have more sales coming in than you can count and stop worrying about where your traffic is coming from.
Second, selling physical products is better, in my opinion, then selling information products, because it's flat out easier. If you want to sell information products, you have to have some skills. Mostly WRITING. Even if you don't have information yourself that people will want to pay for, that's ok. You can hire people to write ebooks for you or whatever. Or you can sell other people's information products (but see Reason #1 -- you want to HAVE affiliates, not BE an affiliate.)
But either way, there are sales letters to be written, newsletters to be written, and it never stops. If you don't like sitting down and WRITING then selling information for a living is not going to be your cup of tea.
And here's the dirty little secret about information products. Most of the time, you have to keep making new ones. Once most everyone in your target market has bought your ebook or other info product you have to make another one. Or else it gets outdated -- same thing.
With a store selling physical products, in many cases repeat customers keep buying the same products over and over. Or there is a continual supply of people that want an infinite variety of products. This leads me to...
Third, selling physical products online is flat out easier because there's more volume. Walk into any mall and look around. There may be a book store (information products) and a CD store ("information" product), but most every store in the mall from the food court to the department stores sells real physical products.
For that matter, walk into any of the department stores (the smallest one is way bigger than the largest bookstore) and there, too, the vast majority of their products are physical, not information-based. Even Amazon, one of the bigger information sellers, has as many tabs for physical products as they do for information-based ones.
These days it is so easy for any person to open their own store and sell real, physical products that are in high demand and often have million-dollar brand names that you can sell on YOUR store with YOUR affiliates.
The bottom line is that the volume of physical product sales just blows away info products, it's easier to get your piece of the pie, and you can build up your own affiliates.
Case in point: Without knowing anything about sales letters or copywriting (or much about internet marketing for that matter), my wife put up a Yahoo Store a year ago (January 5th) and sold $1.3 million in her first year online. Now instead of having to create a new info product and start over, she is just continuing to build on what she already has. In fact, she sold over $100,000 in the first 11 days of 2005 -- with just one Yahoo Store. And of course no one says you can only have one store.
(True, it helped her that her site is #1 on Google and #1 on Yahoo for "wedding favors", but you can rank for YOUR search terms too. If you don't already have Stomping the Search Engines which teaches you how to rank high for your chosen keywords, step-by-step, I recommend you get it here.)
In the time it takes an info marketer to create one $29 e-book, you can launch another store selling any kind of physical merchandise. And with modern dropshippers (like wholesale wedding favors) you never have to stock inventory, you don't have to create any of your own products, you don't have to write anything, and you don't buy anything until it's already sold.
The fact is that selling physical products online may be the best way to go for most people who want to make money on the internet. And many experts are beginning to agree.
For example, Ken McCarthy is known as the Father of Internet Marketing. Ken used to say that selling information products on the internet is the world's perfect business. But even he has come to admit that, for most people, selling physical products online is really as good as it gets -- and a lot easier. If you use drop shippers, fulfilling orders is no harder than letting your customers download an ebook -- and it's much easier to attain a higher volume.
So Ken is hosting a 2-day small group workshop in Miami Andy Jenkins, one of the leading experts on selling physical products online, and me this February 19th and 20th. If you can make it (there are just a few seats left -- class size is limited to a maximum of 32) I'm sure it will be well worth the trip to Miami -- and probably warmer this time of year than where you are. As they say, the weather will be warm, but the small group learning environment will be HOT, HOT, HOT!
For information about the seminar, click here.
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And last but not least, for those of you who are interested in working one-on-one with me to become a professional search engine marketing consultant, the date and location of the initial training weekend has been set. It's February 26th and 27th in Atlanta at Georgia Tech University's Global Learning Center. It's a totally high tech learning classroom -- every seat has a new PC, a flat screen monitor, and an internet connection faster than a T1.
It's not just an intensive weekend Boot Camp. It's a year long one-on-one training and coaching program. I will be limiting the size of the group to 10 people, so if you are interested in getting the information about this unique program, go here to get on the list and leave your mailing address. I will be sending an information prospectus to everyone and conducting interviews next week.
Until next time,
Keep on Stomping!
Brad Fallon
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