Arbitrage, A New Source Of Income

March 10th, 2008

I generally focus on organic listings and anything to do with organic rankings, but lately I have looked at SEM ( PPC ) as a way to drive traffic to sites more and more. Don’t get me wrong, I have always done SEM… but I have decided to up the ante so to speak when it comes to sending PPC traffic directly to an affiliate offer for arbitrage.

It is a pretty hard game. I’ve tried my hand at the less competitive and longer tail terms in the past with no luck when it comes to arbitrage ( generally I break even or make a very small profit, not enough to continue with ). That all changed when I decided to take a couple thousand dollars and put it all in one basket ( platform ) for one niche ( payday loans/cash advance ).

See, most of the times I would spread my spend against the major 3 ( MSN, YAHOO, GOOGLE ) and then handle 3-4 smaller niches in each platform at one time. I was trying to do this too quickly and not really giving all my attention to just one campaign. I decided that maybe it wasn’t the offer or the platform that was the problem in the past, maybe the problem was me.

So, I decided to take a couple grand and put it all on the line with one niche. I picked a very competitive one on purpose because those tend to have the highest payout. I did my keyword research and added in over 2k worth of keywords into separate ad groups and made 3 ads per ad grouping. I also made sure tracking was set up correctly so I could see what ads performed best with what keywords.

I set an ad budget of $100 a day and each keyword to .50 CPC. The first day I got no clicks at all, so I bumped this to $2.50 CPC and the next day I was getting some traffic, though it maxed out around lunch time because my daily budget was too low. The third day I raised my daily budget to $250 and also raised my CPC to $3.25 per keyword so that I could see some volume and test out the conversion rate. To my luck, the conversion rate was awesome for the landing page the affiliate network gave me for the offer. I was doing about 1 conversion for every 7 leads.

I ended up spending the $250 over an even 24 hours and walked away with about $400-$450 a day in sales, which left me with $150-$200 a day profit for almost no work other then finding an affiliate offer, getting keywords and ads made, and turning on the traffic. Traffic seemed to go up and down during the week, but I average about 90-100 clicks a day with what is mostly a second page ranking for the platform I am on.

Even if I was pulling $50 a day profit, it is very little work to setup ( maybe 2 hours max upfront ) and does not need very much attention after it is set up and running. I maybe spend 30 minutes a day looking/thinking about it max. That $150 a day average will give me a cool $4500 a month extra revenue that I could focus on other projects.

I got a bit greedy and decided to remove the daily budget and raise the CPC on 2 of the better performing keywords/ads and it totally messed up everything. I actually went in the red for a day and have since lowered the CPC back down on the 2 keywords/ads. I did leave the daily budget off though. The lesson I learned is change one thing at a time and do it in incremental values.

When this gets sorted out and is back on track, I am going to start disabling the ads/keywords that are not producing traffic/good conversions and just let the campaign run with the better performing ads.

Here is some numbers for you:
Out of 7747 keywords/ads, only 47 produced a convertible lead
Out of those 47 keywords that produced a lead, only 8 of them produced at least a second lead.
Out of those 8, only 3 keywords produced more then 2 leads

See where I am getting with this? True some of these ads focus on the same keyword ( remember I did 3 ads per keyword ), but the point is that when I look at raw keywords ( not ads, but just keywords ) less then a handful are bringing in volume and sells. Since I am converting at an average of 1 in 7, I would have to give all my ads at least 21 clicks before I judge them not converting well ( you may have 18 non converting clicks, then 3 converters in a row ). Not to mention the time it may take those keywords to even get 21 clicks ( some long tails may never get clicked ).

So, after a weeks worth of testing, I feel that it is safe to take a winning campaign and start dumping the losing keywords/ads that are just bringing my campaign down some. If I still had a daily limit running, this would ensure more money for the proven winners so that they get even more exposure on the network I am running ads on.

What Blackhat Really Is

February 29th, 2008

Seems like a lot of people tend to think blackhat = spamming.

I will tell you what I think blackhat SEO is and the ideas behind it. First, I would like to point out that the terms whitehat and blackhat actually started decades ago within the computer systems/network security industry. Blackhatters were generally people that found and exploited holes in computer systems and networks. Whitehatters were generally the admins of the systems that the blackhatters exploited.

Now, you have to think to yourself a few things:

1. Blackhat guys were people that knew these systems really well, knew how to find holes or problems in these systems, and work them to their advantage.
2. Whitehat guys must not have known about these flaws in their system or they would have “patched” them somehow.

Given the above example, you could generally make the assumption the blackhatters were a tad bit smarter then the whitehatters.

What you manifest in your mind as being “exploited” or “work to their advantage” is up to you, but many times these blackhat guys were considered the leading edge tech gurus of their time. They could do what “whitehat” admins could do, plus more. Many times, blackhat guys were hired by large firms to test and break their software and computer systems so that they could improve them later on. Without blackhat gurus, you would not have the types of technology you have now.

Blackhat people didn’t break into computers for profit or harm, they did it because they could do it. They did it many times to show that computer systems were weak and vulnerable and needed to be fixed. They did it because they wanted to learn and test their limits. Once someone decided to cause harm or profit from this tactic though, they become a criminal. Criminal does not equal blackhat. That would be like saying that since I own a handgun, I am a criminal. Its what I do with that handgun that could turn me into a criminal. Just because I use a handgun or have a handgun, doesn’t mean I am a criminal.

I can say that many of the tools of the blackhat guru are similar to the tools of the spammer. They both are keenly interested in automation and making things easier/faster. They both generally work within the “law of large numbers” and use software to achieve their end goal. Just because you are doing something blackhat though, doesn’t mean you are spamming.

I’ll give you a good example. I have several sites that are mashups. These sites collect data from various sources and will republish it in different formats to an end user. Remember, I have several of these sites and they are all spread across different servers and datacenters in the USA. These sites offer great content and provide a valuable service to people using them.

Guess what.. it only takes me on average about 10 minutes to build these sites once I acquire a domain name for them. I have scripts set up that set DNS for these domains to my servers, set up the new account on the server, set up the databases and files required to run the sites, populate those databases with information extracted from the various sources based on select keywords, and then obtain links to this new mashup from other sites I own or have accounts at ( directories, social media, etc.. ). All this is blackhat, but do you see anything wrong or illegal with what I have done? Have I spammed anyone?

I could easily build 3-4 of these an hour if I wanted, but honestly I don’t have that many freely available domains. There is nothing wrong with adding a link to my new site from other sites/accounts I own and their is nothing wrong with using the various public and free information sources I pull from either to create these mashups. Sure, I know some “holes” ( shortcuts ) within a Linux server, in PHP programming, and within search engines.. and I do use them to my advantage. Then again, do you know any professional that doesn’t use their years of experience to their advantage when they need it?

People may think I try to “spam” the index of search engines with these sites, but I don’t. My goal is to get the sites up, promote them some, monetize them, and move on to the next project as quickly as possible. Kinda like Henry Ford’s idea for the assembly line where he could crank out a new Ford every few minutes. I know these sites will rank well with little promotion and if I can turn a profit from it quickly then my goal has been met.

Blackhats are just smart people that know the ins and outs of the systems they are using. They then automate their tasks based on this knowledge and use this to their advantage. Its what you do with your knowledge/automation afterward that defines who you really are.

There Is No BlackHat Love In Louisville SMO

February 20th, 2008

Went to the SMO event last night at Ramsi’s and meet some interesting people.

Todd Earwood was there along with Rob May. I also noticed Joe Wheeler, but didn’t get to talk to him.

Jason Falls was heading it up and I got to meet Brian Wallace from NowSourcing as well.

Ben was taking some pictures and Aaron Marshall was there as well.

It was cool to see Scott Clark from Lexington too.

Me and James sat with Ben most of the night and talked about Volodex and how to improve some things based on what the presenters talked about in regards to people adapting to social media. We have some good plans in the works. I think overall the SMC is a good idea and one that me and James would like to fund with a sponsorship actually.

I did find it funny that each of the presenters had at least one comment about blackhat “stuff” and how it does not work in social media. I hate to be the one to go against the grain, but it does work if done correctly.

One thing to keep in mind when it comes to blackhat is that true blackhat is not about spamming or gaming the system, it is about automation. Anyone that says different is a someone that doesn’t know their head from a hole in the ground. If I can automate the process of submitting a Digg story, automate the process of signing up for a Gmail account, or automate the task of finding my competitors link from search engine result pages.. then I am doing blackhat stuff. Matter of fact, we all do it daily to some degree.

Ask yourself if you use any tools at all to help automate anything you do online. Do you use a RSS feed reader? Do you use your Blackberry to connect to Twitter? Anything that helps automate a task for you can be considered blackhat to some level. Just because you chose to use blackhat for chatting on Twitter or reading your mounds of RSS feeds on Netvibes and I chose to use blackhat to help me create 20-30 gmail accounts a day doesn’t mean I am doing something wrong. I simply created a service of my own that helps me automate a specific task.

I like how Rob May put it, which in summary was something about risk takers and non-risk takers and how you have to take risk sometimes to get a bigger reward.

You can game Digg and social media outlets. Just because the wannabe script kiddies decide to create 30 Digg accounts on the same IP and then submit a story from one of their sock puppets and vote up their story from all their digg accounts at the same time with all the accounts only having the same exact stories in them does not mean a real blackhat can not game the system. Its these people that make blackhat look bad. They lack the education and desire to do things correctly and this is why they make blackhat seem so “wrong” and “bad” to many people.

Like with any automation, there are good automatic process and bad ones. To be good at blackhat means to be good at whitehat, but make it a lot easier to go from beginning to end.

Many of us have tons of whitehat sites and blackhat sites.. if done correctly, you would never be able to tell one from the other.

So, What Is Volodex?

January 28th, 2008

Many people have asked me about Volodex since I bring it up when they also ask me what it is I do with my time.

Here is a simple run down:

1. Do you want to run an ecommerce site selling your own products ( or other peoples )?
2. Do you want to connect with customers that fit your sales demographics?
3. Are you looking for more exposure for your brand or product?
4. Are you looking to keep up with your industry trade shows and conventions?
5. Do you need a simple way to sell products on other social networks?
6. Want an easy way to recruit new employees to your business?
7. Need a recurring billing solution that is stable and secure?
8. Want to make commercials for your business and promote them online?

We have a lot more to offer, but like I said this is a rundown of the things we are looking at for the moment. Oh, did I say it was also FREE and should be ready to test in 8 weeks?

Say goodbye to the the shady web developers that charge an arm and a leg to set up complex ecommerce stores for you or try to push you into some expensive recurring Internet marketing scheme.

This is Volodex. This is “social ecommerce”. You heard it here first.

Somehow I Missed The Local Social Media Gathering

January 28th, 2008

Man, somehow I was out of the loop on the first ever social media event going on in Louisville.

I could tell that Todd was there and hopefully he didn’t lose a jacket there too like he did at the geek dinner.

I’m not sure why I never seen any promotions for it, but there were several people at the event I would have liked to have met. This includes such names as:

Jason Falls
Shawn Morton
Brian Wallace
The guys at Webpronews
The crew at profilactic.com

Of course it is also good to meet the regular faces I know too if I would have went.

I plan on pimping Volodex soon, as we are about 8 weeks out from an official beta launch. I can’t let the cat out of the bag just yet, but you can find it online if you look hard enough.. though that site and design you might find is our OLD alpha test.

If Your Not At This Geek Dinner, Then Don’t Complain Later

January 20th, 2008

Its in 4 days people @ 6pm and the lovely Fox and Hound restaurant.

At this count there are over 50+ people coming, so if you can’t find a geek to partner with, shame on you.

Here is the lowdown:

1. Ben Thomas heads this up. He will be presenting awards for the best Star Trek costume, come prepared.

2. Todd Earwood has promised that he WILL be buying drinks for everyone. Come sober, leave drunk.

3. OMG, Cyndi Masters is coming this year. I have never seen her at any IT, web, or geek function ever. I hear she is a party animal! Good times a comin’.

4. Rob May is will be performing the chicken dance and teaching all us geeks how to dance in style.

5. Big Baller Matt Winn will be in attendance. Maybe he can help you geeks get some funding for your AI Lego MindStorms collections.

6. Jason Hiner is an editor at Tech Republic. Maybe he can score us all some nice press for the event and publish the winner of the dance contest headed up by Rob May.

7. Tim Barrett of “No Geek Left Behind” is the default designated driver for the event.

8. Does anyone have an idea of Who Is Kevin?

If this all sounds fun, take the time to signup and see who else is coming at:
http://louisvillegeekdinner.com/index.php?n=Main.Signup

Remember, I coming as Yoda… bring your own costumes too.

Official, I Am Not For Hire.

December 22nd, 2007

I am sure this will make a lot of my competitors happy.

I have been doing this for a while already, but I am making it official on my blog now. Don’t email me with your “big idea”, don’t call me to ask me to work on one of your client sites, don’t contact me to work on your project. Period.

Unless you willing to drop some serious money and make me a partner, I don’t want to deal with your nickel and dime project shit you can’t get off the ground. I have plenty of my own projects, partnerships, and ideas to worry about that it would be stupid of me to drop everything to work on a project that will only net me a few hundred dollars.

I get several emails a day from people pitching their ideas to me, asking me for help, or wanting me to work on their client sites. It is kind of sad in a way, a lot of these people are other companies that sold their client SEO services and then can’t provide it once they closed the deal and have to rely on 3rd party help to get them through the project. They also expect this work to be done within their budget that they closed with their client. Meaning, if they sold them a $1000 dollar SEO package and promised them the moon, I have to deliver the moon for $500 so that the company can still make a profit from it.

I DON’T THINK SO!

Unless your serious about a project and got some money in hand, don’t bother with contacting me. I can give out some free ( limited ) advice for you, but I am not about to start helping you rank in the search engines when I am doing it for myself already.

Wannabe Louisville SEO’s Sure Like To Talk Shit

December 22nd, 2007

Like the title says, they sure like to talk some mighty good shit.

As I pointed out in another post ( half way through here ), there are a lot of people that jumped on the Internet marketing bandwagon to cash in on their “golden ticket”. It is hot right now and many of these self proclaimed local GURUs think they can tell you what you need to hear.

I have seen many of these people go from “designers and coders” to SEO’s literally overnight. I seen them transform and promote themselves as someone that is a master at their game. I have no problem in people learning new things, getting better, and trying to expand their services.. but don’t act like you are so much better then the next person that has been doing this for years and actually loves to do this. Don’t act like everyone else is town is crap and you can get someone first page rankings in Google. If you can do that, tell me why your not on the first page yourself?

OK, maybe you do rank on the first page of Google… but for what term? Some ultra non-competitive term like “Louisville SEO Company on Third Street”? Come on. How about ranking first page Google for all your terms that cross SEO, Internet marketing, email marketing, web design, hosting, and such? Can you do that and prove your results?

I offer up a challenge to any and all local ( must be Kentucky based ) Internet marketing people that are up for it. Outrank me for some agreed chosen terms ( both in the number of their related first page listings and their ranking spot ) and I will pay you $500 cash. A time limit will be chosen, terms will be agreed on, and a mutual 3rd party will be chosen to hold the cash.

If I win though, you will have to honor the cash payment back to me. Any takers?

Kentucky Internet Marketing Industry

December 21st, 2007

What can I say, it is shit.

Kentucky, and all its cities, are about 7 years behind when it comes to online anything and this is especially true for online marketing.

How do I know? Well, lets see… I have been building web sites for myself, freelance clients, partnerships, and for companies I have worked with for the last 14 years. I have done everything from selling the services, support, building the sites and apps, marketing them online, hosting them, and even running them. I have had some sort of partnership with just about every web design and marketing firm in the state.

Everyone has the same problem. The clients in Kentucky are not informed of even what the Internet is or how to take advantage of it as a whole. Because of this, most clients are not willing to sink even a fraction of their advertising budget into their web site like they do for their print or traditional media buys.

This also leads to salaries for IT professionals as a whole in Kentucky to pretty much suck. All I ever see is jobs for C, C#, C++, Java, .NET, or VB going for at most 45k a year on average. So how about the open source PHP or Python developer? What about an Internet marketer? Well, I can say that jobs for you are starting to trickle into Kentucky finally, but for years you basically were shit out of luck and had to work outside the state traveling or working remote.

Even worse, I would see jobs like these open up and qualified professionals apply for them, only to be turned down because the company decided to hire someone fresh out of college with NO hands on experience in the needed subject and willing to train them instead of hiring someone with over 10+ experience in what they need. How stupid…

So when I look at corporations like Humana, Doe Anderson, gotolouisville.com, and Networld Alliance and see that they consistently have help wanted ads for the same position every 3 months, it makes me laugh and giggle inside because I know these people don’t try to hire the “right” people, but try to hire the “cheapest” people they can. I have nothing against this, but when I see the same job opening for 14 months straight and then see it repost every 2-3 months for almost a year, I have to assume that they have no clue what they are doing.

However, I also know the people that end up getting these jobs for the most part. A lot of them are people I have connected with over the years here in Louisville and across the state. Many of these people are starting out designers or programmers that have came to me for help with Internet marketing at one time and I have given them some advice or worked with them on projects for clients. They get bitten by the Internet marketing bug and think it is their golden ticket to riches online, so they start learning SEO and SEM themselves and end up promoting themselves as an Internet marketing GURU. They in turn land jobs at these corporations as a Internet marketing specialist, only to be let go months later.

Even worse, they might start a new company all about Internet marketing services. My my.. just months ago they were web design and programming GURUs and now they are SEO Gods! I wish I could go to their schools!

Ha, I have to laugh sometimes at all this. I see these companies pop up all the time left and right. One company ( a one man operation ) basically got his start by stealing his former employers CMS code and client list. Another one is actually some guy that knows nothing about HTML, SEO, or online business.. but outsources all his work to teenagers and landed a nice article on the CJ because he had a “few connections” there and promotes himself as a small business online marketing guru. Another good one is this company that started out doing nothing but hosting and was run by someone who primarily does construction, outsources their work, and uses of all things outdated cold fusion code.

Why would you buy Internet marketing services from these people, let alone hire them to help grow your business when you can have someone that is focused, rooted, and dedicated to Internet marketing?

The answer is kinda simple and hit me many months ago and changed my views on my career.

Real Internet marketing people don’t have clients. We don’t take on client work, we don’t send out invoices, we don’t cold call or apply for jobs. THINK ABOUT IT. If we are so good at what we do and can get top spots on search engines, build you an email marketing list of thousands of prospects, get you tons of traffic from social media and paid listings.. then why the hell would we do it for you and make you rich?

Be careful. The next time someone wants to sell you marketing and they claim they know it all, sit back and ask yourself why they need YOU.

Louisville SEO Consultants Should Have A Network

July 17th, 2007

When shopping for a local Kentucky SEO Consultant, you should know that not all Louisville search engine marketing professionals are created equal.

A smart Louisville SEO professional will not only keep up on the newest trends in Internet marketing and have years ( at least 7 years of direct experience ) of broad range online marketing experience, but also a network to back themselves up when things get tough.

All to often you will find a rather ‘green’ or inexperienced consultant that got lucky and ranked well for a term. Hey, it does happen! By chance this does happen, those consultants will think they are the new guru in town because they ranked themselves number one for a very non-competitive term and will try to fool you into thinking they know this industry like the back of their hand. However, what will happen when they lose their rankings? What if it was your rankings they lost?

Smart SEO’s have several backup plans and integrate them into your marketing agenda without having to be asked. As an example, my years of professional consultation has put me in a position to be an editor at many high level news sites, informational sites, and directory sites. At any time I can use my high level access rights at these sites to promote your site to help boost your rankings and traffic flow. I also have contacts in the legal, real estate, medical, technology, fashion, news media, and travel industries that I can use to help gain links to your site from all the networking I have done over the years building web sites. I also have a network of my own sites that branch into many different industries and niches, and if there is a niche industry I currently don’t support myself, I have many friends that will support and help.

So just because someone got lucky for a week and ranked their site number one for ‘Louisville bird cage reseller in the highlands’ in Google, doesn’t mean they know anything about true online marketing tactics and best practices. Make sure you do your homework before hiring or consulting with a Louisville SEO.