It was a bit surreal to see two of my HN comments in a blog post on the front page of HN.
Since people are interested, here's another tale of my year running affiliate campaigns on Facebook.
By the time I got into the game the competition was already heating up. I spent most of my efforts scaling my dating site campaigns internationally because global traffic was a far more fertile field, with less competition and cheaper clicks.
After I had maxed out all the nations of the English speaking world, I started running campaigns in France (and I unwittingly and unintentionally advertised hard core porn on Facebook in France for at least a month because of the geographic based redirect of the dating site I was advertising, with a US based IP you saw a tame site, with a French IP explicit hardcore porn)
My greatest success however was in expanding my operation to Latin America.
In the industry the concept of banner blindness is crucial to understand. Click through rates go down over time, both for individual ads and for entire nations. Because a site like Facebook wants to maximize its CPM, higher click through rates are the way to get cheaper clicks and profit.
I took my profitable ads in English and ran them through Google translate into Spanish. It was something simple like "Meet Hot Girls".
The hardest part was finding a dating site that accepted South American traffic. Credit cards and e-commerce have a ways to go in the global South, and therefore the traffic is of much lower value because it converts much less.
I found a tame version of Adult Friend Finder without any nudity on it's landing page. At the time Friend Finder Networks stated that they accepted traffic from almost all of the South American countries.
The first day I ran my campaigns in Columbia & Venezuela the response was incredible. Just astounding.
In an English speaking country you would be lucky to get three people out of a thousand to click on one of your ads. That first day in Columbia I was getting ten people out of a thousand to click and the clicks just cost one penny each!
I was converting at a rate that Friend Finder was paying me 14 cents per click and in that first day I made over $5000 with very little ad spend.
A small ad spend was important because I had to pay FB daily but was only paid out every two weeks and I was just out of college with very little credit.
I could have made so much more in those days with an American Express Plum card and unlimited credit.
As the South American ad campaigns went on the click through rates trended closer to the rates of their Western counterparts. It is for this reason I think I might have been the first person to run dating ads on Facebook in Columbia.
You have no idea how true your story is to my life, lol. I was in the same situation. When you make $40k a year at your job and start bringing in $40k a month in revenue it's a bit shocking. I didn't handle it right. Traffic and offers dried up. I still ended up bringing in about 80k over a 4 month period after the FTC crack down, by running game install offers. During that time I almost quit my job. I'm not sure now if it was a good or bad idea. It's probably good because I still have the security of a job, but if I would have focused full time I might have been able to really scale. Lately all I do is lose money testing offers. I didn't invest that money back into my business (or arbitrage scheme if you will). After being "rich" for a few months I couldn't really handle normal life. I mean my family never had money, we always lived paycheck to paycheck. So in the end that's what I did with the money. Then I didn't adjust to not having that income and ran myself into debt. I'm actually dealing with some pretty severe depression right. Now I'm just working my normal corporate job day to day trying to figure out how to escape.
At Affiliate Summit West in Vegas, I was at a party in the Palms. This big suite had tight security and was packed with "super affiliates". I remember at one point drifting to a group of affiliates that were wearing more money than I bought my car for. And it was not a cheap car.
I asked them how much of their income they were saving - every single one said they were spending it, but it was ok because they would make more money next month. None of them cared that the gravy train could come to an end, except one.
Well I can still generated leads but I haven't been able to break even on things lately. I really don't have any disposable income that I can keep testing offers and losing until I can find a campaign that I can optimize to profitability. I hear there is big money in mobile but I was never really able to generate mobile traffic. There is also bound to be a crack down on mobile because people are running the same type of scammy shit. Like opting into auto billing by clicking a link.
I have reverse engineered >100 mobile ad networks and have historical mobile ad data going back more than 12 months across the majority of Android and iOS apps. Contact me.
Thank you for the details. It seems I've been living under a rock and this is new to me.
Just to make sure I understand ... the way this used to work is that you acted as an affiliate for another site (e.g. aff). They would pay you a commission for signups you generate. You then market on sites such as Facebook and get the affiliate fees.
As an affiliate, one is sort of a marketing firm for the web site. However, people abuse this setup by misleading clicks/signups.
Is this an accurate summary?
Edit:
Also, how does one learn about these affiliate programs? Word-of-mouth?
> Thank you for the details. It seems I've been living under a rock and this is new to me.
You haven't been living under a rock. The affiliate marketing industry is hiding under a really big rock :)
> Just to make sure I understand ... the way this used to work is that you acted as an affiliate for another site (e.g. aff). They would pay you a commission for signups you generate. You then market on sites such as Facebook and get the affiliate fees.
That is a good summary. An example is eHarmony. They paid me $4.25 to fill out a signup form on their site (first name, last name, email, gender, interested-in, location). I created a web site to tell people about them and then sent traffic to the site from various sources (Facebook, Display Ads, Search, etc.)
You don't always have to create web sites in between the ad and the advertiser, but often it helps because you can "seal the deal" by convincing them about the product.
> As an affiliate, one is sort of a marketing firm for the web site. However, people abuse this setup by misleading clicks/signups.
People abuse it through many different ways. The most notorious is Jenny's Diet Blog. An affiliate marketer made a fake blog about "Jenny" and her diet "miracle", espousing the ease of losing weight through acai berry and colon cleaning product free trials. The affiliate was paid ~$40 per signup for each.
The abuse is through misleading ads, outright lying on web pages, scammy merchants (they are just as bad) and more.
> Is this an accurate summary?
You definitely are on the right track.
> Edit: Also, how does one learn about these affiliate programs? Word-of-mouth?
There are a lot of affiliate networks that host the offers, track performance and handle payouts. They provide ways for affiliates to discover things to promote and also serve as a trusted source of payment.
You are correct! Not all affiliates abuse the system, there were a lot of nice kids I met trying.
You are like a digital salesman for any manner of companies and products.
The cool thing about it is the scale that is possible. For example, in the one year I ran ads, my ads were displayed over 640 million times around the world.
I got so many clicks in Columbia that 20% of the male users in Columbia on Facebook clicked one of my ads.
There's a few niches where affiliates provide nontrivial value as well. For example, in travel there are both kinds. A number do take the minimal, often spammy, approach of trying to insert themselves into a sale that was already going to happen so they can capture it. One route is to create content-farm "travel" pages that don't really have much travel information, and exist solely to get an affiliate cookie onto the machine of someone obviously researching travel.
But Hipmunk is another example of a site largely supported by travel-affiliate revenue, and they do it by actually providing a significant value-add service.
Likewise, many -- if not the vast majority of -- airline mile optimization blogs are basically credit card affiliate machines now. (See pretty much all of boardingarea.com)
They provide a useful service for some (here's how to use your frequent flier miles), but the affiliate links in nearly every post are rumored to be worth up to several hundred dollars per credit card signup.
> There's a few niches where affiliates provide nontrivial value as well.
Very true. I've been speaking at marketing conferences for several years, and one of my core messages to affiliates is "don't build a site or campaign, build a business". If no one would miss your site if it was gone, you're not building value.
Websites often have a small link on the bottom to their affiliate program; for example the aforementioned site has a link named "Webmasters, Earn Money".
>>I was converting at a rate that Friend Finder was paying me 14 cents per click and in that first day I made over $5000 with very little ad spend.
Pretty amazing story. To put this in context time-wise, around when was this and how long did it take for that income stream to dry up? Was there a sudden end to it, or more like a gradual decline?
The $5000 day stood alone. There was another day that I would have done just shy of $5000 profit but the affiliate network refused to pay out. I had to fight with them to get them to give me half my earnings for the day. If I didn't do that I would have lost almost $5000 that day.
I spent the whole year chasing $5000 days and could never replicate them. A lot of affiliates earned that and even more though.
With that South American campaign, AFF paid the full 14 cents per click but then said that they would only pay 6 cents a click in the future. My profit was cut, but it continued for months, slowly tapering off as the ads were clicked less and less and FB gave me less volume.
I saw someone further down saying that this would sound like someone telling tall tales if not for it being the affiliate marketing industry.
I'm not trying to brag, all of you senior SV engineers make more per year than I did that year, with far less risk than I took on. I didn't get rich doing this, in fact I went through a good period after this finding out what life is like in America at the very bottom of the economic heap. There was even a time when I got on a plane and moved to Austin with just $900 and was almost homeless. My AirBNB rental turned out to be infested with cockroaches and I couldn't get a refund, my Boulder landlord refused to return my security deposit and a client wasn't paying me.
I pulled myself up by the bootstraps though and learned Python/Django web dev, real horatio alger style, and now I live the life of a well paid consultant in Astoria, NYC.
Affiliate marketing was pretty good for me though, being just out of college with no marketable skills in 2009, when the job market stood in ruins all around me and I was terrified of the prospect of having a real job.
There's something funny (ironic?) in the fact that you consistently misspell the name of one of your Golden Goose countries (Colombia). I don't meant to sound like I'm sitting on a high-horse —- in fact I enjoyed reading your stories and always thought about trying passive income myself -- but it kind of epitomizes the situation: you made a lot of money marketing to a population from far away and far enough away that you're fuzzy on the name of the country to which you're marketing.
Again, I do appreciate you sharing the stories, and I hate to call out a spelling mistake like that. Just thought it had symbolism in this case.
You are absolutely right, your comment also kind of cracked me up a bit and I appreciate it. My strategy was very much spray and pray, throwing things against the wall to see what stuck.
I actually have been to Colombia, spending only 5 hours onshore and grateful for returning to the cruise ship safely.
I was just 17, and walking down the street a group of young, beautiful women approached me and started flirting and touching my arms etc...
For a second I thought "Hot damn, I'm the man here in Colombia, these girls love me" and then I realized they were prostitutes.
LATAM was big for me too, but not with dating. The good 'ol days of Facebook ads being cheap were great. There is still a ton of opportunity there, but you've got to dig to find it.
Thank you very much. There is so much more to tell, the FTC SWAT raids, the cocaine addled pornographers, the Israelis and Oprah's lawsuit against 500 affiliates.
I was smart, ethical and scared enough to see the hammer coming down on the industry and stayed out of all that mess, but I had a front row seat to the whole thing.
> There is so much more to tell, the FTC SWAT raids, the cocaine addled pornographers, the Israelis and Oprah's lawsuit against 500 affiliates.
If this weren't the affiliate marketing industry we're talking about, I would have thought that you were a pathological liar, the kind who makes up tall stories! :-)
You would have to be a complete idiot to not see the hammer coming down on diet. Especially with those blog sites and use of oprah/dr oz/rachel ray without permission. The people profiting from it knew but took their chances. Some of them ended up paying the hard way like Jeremy Johnson.
It's passive in the sense that once you invest in establishing a working income stream, it takes very minimal effort to maintain. I wake up and can do nothing to earn it, or work to grow it if I choose.
But if you choose to wake up and do nothing, how long is that income stream going to last?
I think with the tech industry in general, things move along too quickly for these types of 'passive income' to be stable for more than a few years. After a while, if you're not keeping up with the changes, the stream will die out. Unlike, say, passive investments in the stock market (although there's more volatility there, of course).
For as long as your product is relevant and your positioning doesn't collapse. Tweaking things to keep up doesn't necessarily require full time effort when it's small and the markets don't shift that much.
Waking up and doing nothing for a few weeks or months doesn't hurt. Making sure you're still relevant in Google, Amazon, App store or whatever your channels is about the same as poking around in your e-trade account and managing some stocks.
If you keep the business small and automated, it's not as unlikely as it sounds. Tech needn't be bleeding edge. The economy is huge and there's a place for solving all kinds of tiny problems. You can still love the business and give it whatever you want, but it doesn't have to own all your creative and mental output.
Since people are interested, here's another tale of my year running affiliate campaigns on Facebook.
By the time I got into the game the competition was already heating up. I spent most of my efforts scaling my dating site campaigns internationally because global traffic was a far more fertile field, with less competition and cheaper clicks.
After I had maxed out all the nations of the English speaking world, I started running campaigns in France (and I unwittingly and unintentionally advertised hard core porn on Facebook in France for at least a month because of the geographic based redirect of the dating site I was advertising, with a US based IP you saw a tame site, with a French IP explicit hardcore porn)
My greatest success however was in expanding my operation to Latin America.
In the industry the concept of banner blindness is crucial to understand. Click through rates go down over time, both for individual ads and for entire nations. Because a site like Facebook wants to maximize its CPM, higher click through rates are the way to get cheaper clicks and profit.
I took my profitable ads in English and ran them through Google translate into Spanish. It was something simple like "Meet Hot Girls".
The hardest part was finding a dating site that accepted South American traffic. Credit cards and e-commerce have a ways to go in the global South, and therefore the traffic is of much lower value because it converts much less.
I found a tame version of Adult Friend Finder without any nudity on it's landing page. At the time Friend Finder Networks stated that they accepted traffic from almost all of the South American countries.
The first day I ran my campaigns in Columbia & Venezuela the response was incredible. Just astounding.
In an English speaking country you would be lucky to get three people out of a thousand to click on one of your ads. That first day in Columbia I was getting ten people out of a thousand to click and the clicks just cost one penny each!
I was converting at a rate that Friend Finder was paying me 14 cents per click and in that first day I made over $5000 with very little ad spend.
A small ad spend was important because I had to pay FB daily but was only paid out every two weeks and I was just out of college with very little credit.
I could have made so much more in those days with an American Express Plum card and unlimited credit.
As the South American ad campaigns went on the click through rates trended closer to the rates of their Western counterparts. It is for this reason I think I might have been the first person to run dating ads on Facebook in Columbia.