2018-12-07T07:02:52+00:00 December 6th, 2018/Affiliate Marketing/By /

Affiliate Marketing: The 22 Immutable Laws of Affiliate Marketing [Part 1]

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So, what’s going to happen over the next ten years?

I love what Jeff Bezos (CEO of Amazon) said when asked what Amazon would look like in ten years.

He said that the future is too unpredictable. Instead, Amazon focuses on what’s NOT going to change.

Ten years from now, Amazon’s customers will still want low prices, fast shipping, and a vast selection.

It’s impossible to imagine a future where their customers will say, “We want higher prices and slower shipping.

We all know that affiliate marketing is constantly changing.

Years from now, the offers will be different and the tactics will be different.

But what’s NOT going to change?

What laws have been true in affiliate marketing for the past decade and will remain true for the next decade?

These laws are called “Principles.” 

This is my attempt at a timeless series of articles. I want a new generation of affiliate marketers to read this a decade from now and still find immense value from it.

And this series is a tribute to one of my favorite marketing books, The 22 Immutable Laws of Marketing.

Note: Because these articles require more time and effort, this will be a 3 part series, with articles released once a month. 

Here are the first 7 immutable laws of affiliate marketing.

Law #1: Be the First in a Market

Every industry and product has a lifecycle.

Affiliate marketing campaigns are the same. We can categorize them into four major cycles.

Introduction Stage:

This is when a new strategy or vertical is first introduced.

A few affiliates take on some risk to determine if this strategy can be profitable. There’s no one to copy or model after. They need to be innovative.

Money is lost during this testing phase. However, soon enough, one of them will strike gold. They have a first mover’s advantage.

Growth Stage:

This is where most of the money is made.

Most people haven’t seen this strategy or vertical before.

The first movers must strike hard before the rest of the industry catches on. They need to scale, while building their moats.

This is the best time to enter as an affiliate. The model has been proven to be profitable, but it’s still relatively unknown.

Maturity:

This strategy is now known to every affiliate.

There’s still money to be made, but it requires a ton of skills and new angles.

Decline:

A few changes in the market make is hard to profit, except for a few select affiliates.

What causes something to go on the decline?

I’ll use the analogy of a lake full of fish.

1. The audience is burned out.

They’ve seen the angle before and they already converted on the offer through another affiliate’s campaign.

The lake is overfished. The fish have caught on to your fishing methods and won’t fall for it anymore.

2. Too much competition.

Bid prices go up and ad click-through rates go down.

Too many fishermen in the lake make it harder for you to catch fish. Plus there are just fewer fish now.

3. There are more rules and regulations.

The merchant account providers require more terms on the offer page, which drives down conversions.

The advertiser with the best offer gets sued for misleading ads. The alternative offers suck.

The city has limited the amount of fish you can catch each day to just 5. You can’t fish anymore with boats and can only use fishing poles.

4. The power players have entered.

You know that your competition isn’t just other affiliate marketers right?

At first, the traffic source’s job is just to supply the traffic and the advertiser’s job is just to supply the offer.

But everyone wants to make more money.

As the industry matures, the traffic source may start promoting the same offer internally. Or the advertiser may create their own internal media buying team.  

Whenever you’re selecting a vertical, think about where it is in terms of the lifecycle.

The owners of the lake start fishing themselves. They’re allowed to use boats, but you’re not. Enjoy the leftover fish.

Some real-life examples?

  • Creating a iPhone app in 2008 vs in 2018
  • Buying Bitcoin in 2012 vs 2018

You get the picture. Don’t enter a market that’s on the decline.

Law #2: The Offer is 75% of the Battle

It can be overwhelming to try to figure out which variables to split test.

Not only are you limited by time, but you need to get the campaign profitable before your budget runs out.

So it makes sense to test the 80/20 of variables right? (80% of your profit comes from 20% of the effort).

It makes even more sense to figure out the 80/20, and then determine the 80/20 of THAT.

This is also known as the 4/64 rule. 64% of your profits comes from 4% of your efforts.

I already figured out the most important variable for you: it’s the offer.

How much marketing would you really need if the offer was an iPhone that never needed to be charged? Hardly any.

The offer sells itself.

On the other hand, it would be extremely difficult to sell one of those old-school flip phones these days.

I’ve had so many profitable campaigns literally die overnight because my top offer went down.

EVERYTHING remained the same, but the alternative offers just couldn’t perform as well as the one I lost.

I remember one time where I just couldn’t beat a competitor. They had access to a better offer than me.

I did all the testing I could, but I couldn’t overcome the gap.

What does this mean for you?

#1 – Test every offer you can.

One of my biggest mistakes was ignoring an offer because I thought it looked “ugly.” I thought, There’s no way this ugly page could outperform the pages that I’m running! But remember that the offer page is only one part of why an offer converts.

I tested the ugly offer and it did better than the control by 34%. Why? It was a lead gen offer that had a newer “database.” Even though my control offer looked better, it had been around for several years. They’re not going to pay me for a lead that already exists in their system.

Yes, it takes more effort to test a new offer, but the rewards are disproportionate in a good way.

#2 – If you find a great offer, do everything you can to try and get it exclusive.

Maybe you can’t get the offer exclusive, but you can get parts of it exclusive. Maybe you’re the only person allowed to promote it via email or Facebook. You have exclusive rights to Latin America.  You develop a different “offer landing page” and it’s exclusive to you.

#3 – Do whatever you can to make the advertiser happy.

Meet them in person and build a relationship. Share SUBID’s with them and do your best to improve the quality.

There are so many moving parts to a campaign, but never forget that the Offer is #1.

Law #3: Defend Your Profits with Moats


Did you take some risks with your campaign and now you’re finally profitable? Awesome, congrats!

But brace yourself…the copycat affiliates are coming.

Profitable campaigns attract attention.

1. Most affiliate managers get paid based on how much revenue they generate. It’s in their best interest to get as many of their affiliates to run that offer.

Even IF your affiliate manager keeps it silent, the other 5 managers on the network will spread the message.

2. Competitors will naturally see the ads or they’ll show up on spy tools.

Getting the campaign profitable is the hard part – keeping it profitable is the harder part.

That’s where the concept of “moats” come in. I learned this term from Warren Buffet. As the most successful investor in history, he evaluates companies based on different variables, including moats.

First, let’s talk about what ISN’T a moat.

Creatives aren’t moats. Your angle, banner ads, and landing pages are important to your campaign’s success, but they can easily be replicated by other people.

What are some moats/competitive advantages?

  • Developing an internal tool that lets you automatically bid on a traffic source.
  • Developing an offer WITH the advertiser and being the only person who runs it.
  • Pre-paying for a lucrative banner for the next 6 months. Even if other people find out about it, you have first dibs on it.

In general, here’s a framework to use when thinking about moats:

  1. Traffic Source Expertise: You know the traffic source like the back of your hand. You’re able to get access to inventory that no one else can. You have a great relationship with the traffic source themselves, which leads to privileges.
  2. Network and Advertiser Relationships: Getting an offer exclusive or getting data that helps you buy higher quality traffic, which leads to higher payouts.
  3. Technology: Unique internal tools, including trackers, spy tools, cloaking, auto bidding bots, auto account farmers, etc.
  4. Manpower / Systems: Speed of implementation. Being able to launch campaigns faster. Being able to manage more campaigns overall. Having more brainpower.

Law #4: The Need for Speed

Countless studies have shown that the faster your website loads, the more money you make.

Distractions are everywhere. If it takes a person more than a few seconds to load your landing page, they’re hitting the back button and checking the latest on Facebook.

And this is especially true if you’re advertising internationally where some places DON’T have great internet or cellphone connections.

There are plenty of guides out there on speeding up your landing pages. (Here’s a helpful one.)

But whatever you do, don’t make the mistake of simply putting your landing page on a Content Delivery Network and calling it a day. You need to look much bigger.

Instead, speed up your entire funnel.

Optimizing the Funnel Speed 1

Law #5: Whoever Experiments the Most, Wins

Affiliate marketing is frustrating to learn.

Part of the reason is because there are different learning styles.

Most of us learned primarily from attending school.

You read a chapter in a book over and over and then got tested on how well you remembered what you read.

So when someone enters the affiliate marketing industry, their instinct is to search for a step-by-step recipe to emulate.

They want the teacher to hold their hand and tell them what to do. It’s what we’ve been taught to do.

But you can’t learn affiliate marketing that way.

Learning affiliate marketing is like becoming a researcher.

You have to perform experiments over and over again and go through a process of self-discovery.

You’ve got to test things out and see what works. Repeat the process.

You’re in charge of your own learning.

No one’s going to tell you exactly what’s working. You have to do your own research for “clues” and perform your own experiments to see what works for you.

Malcolm Gladwell popularized the “10,000 hour rule.” The idea is that becoming an expert in anything requires 10,000 hours of work.

I don’t believe in that rule. I believe in the “10,000 experiments rule”.

The most successful marketer in the room is the one who has experimented the most and figured out what works best.

Law #6: Communicate Clearly

People convert because your offer helps them solve a problem.

You need to show that you understand their problem, and you need to be able to communicate that.

There are three primary ways to do that in affiliate marketing:

1. The Actual Language

There’s a difference between the English spoken in the United States, the United Kingdom, Australia, and Singapore.

There’s DEFINITELY a difference in the Spanish spoken in Spain versus in Chile.

In other words, the translation of your landing pages matters a lot.

Imagine promoting an offer to someone, and they can’t really understand what you’re saying. It’s not going to convert well.

The easiest split-test to do is to test out different landing pages that were translated by different people.

Let the numbers speak.

2. Incorporate Market Slang

Some markets have their own language. You need to speak that language to show that you’re “one of them” and that you can relate.

Here are some examples from over the years:

  • Targeting moms who are trying to lose the post-pregnancy belly? They call it the “mommy pouch.”
  • If someone’s quitting cigarettes, the phrase the market uses is “cold turkey.”
  • I swear Crypto developed its own language: FUD, DYOR, HODL, BAGHOLDERS, MOONING, PUMP AND DUMP, etc.

3. Use Simple Language

I use to think that marketing was all about being clever.

But we have a clear goal with our ads: we want them to take action.

Your audience is distracted, not dumb. Long sentences and big words mean they’re going to zone out.

If you want to increase your conversion rates, make your writing simpler.

The easiest way to do that is to use the Hemingway App.

Law #7: Smaller Budget? Service a Small Segment Well

Here’s the newbie dilemma: how are you going to compete against Super Affiliates if you lack the experience and the budget?

It’s kinda like being an amateur boxer and being thrown into the ring against Mayweather.

But it’s definitely possible because every super affiliate started off as a newbie at one point.

Here’s a framework that can help you compete:

Super affiliates want big volume.

  • This means they’re not serving every audience. They’re focusing on only the big ones since they want big volume.
  • They are not optimally serving their audiences because they’re spread out.

That’s where you come in.

  1. Steal their strategies.
  2. Target a smaller segment that they’re not.
  3. Serve the smaller audience better.

An example…

You see a super affiliate promoting a “Smart TV” offer in USA. You can’t compete against them directly.

The good news is you can reverse engineer their funnels and their creatives.

You notice that the offer’s available in Ireland. The super affiliate’s not promoting there because it’s not worth their time.

But you? It has the volume for several hundred bucks a day.

  1. You can model their campaign since it’s proven to work.
  2. You’re focusing on a smaller audience that they aren’t looking at.
  3. Because this is your only campaign, you can spend more effort on the targeting and creatives to focus on the Irish.

Targeting a different country is one way. Another idea is to laser target on a specific segment.

Lets say you want to break into diet. Well targeting every woman in the United States is going to be tough.

What are some smaller segments?

    • Women who are trying to get rid of the post pregnancy belly
    • Women who’s is recently engaged and wants to shred a few pounds before her wedding day
    • Men who are older, newly divorced, and want to get in shape.

By narrowing your audience down, you have higher conversion rates due to laser focused creatives, funnels, and offers.

Obey the Laws

I didn’t make any of these laws up. These have all been proven again and again by hundreds, if not thousands of affiliate marketers. The successful affiliates are the ones who follow these laws. Those who fail are the ones who think they don’t need to obey the laws.

Don’t overcomplicate things or try to be a mold-breaker. Use these laws to your advantage and watch the money start coming in.

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