The 22 Immutable Laws of Affiliate Marketing [Part 2]

Written by Charles Ngo
Written by Charles Ngo

Affiliate marketing is always changing.
I’ve always said that this industry ages like a dog – a year here is like seven years out in the “real world.”

There are going to be new rules, regulations, market innovations, and increasing competition. All that added up means that what’s working now might not be working two years from now.
It’s natural to wonder what’s going to be hot. What’s the next big thing? If you can figure that out, then you can get a head start on everyone else.
That’s the question that people kept asking Jeff Bezos of Amazon. Jeff commented that the future is too hard to predict. Instead, he focused 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.
Their entire business model is focused on how can they ship things to us faster, and how they can keep lowering prices. As long as they get those things right, then they’re always going to dominate. They have a laser focus on mastering the fundamentals of e-commerce.
So, let’s go back to that mental model and ask ourselves, “what’s NOT going to change with affiliate marketing.
If I fall into a coma and wake up ten years later – what’s going to be the same with this industry?

I started this series six months ago and came up with the first set of immutable laws:
Law #1: Be the First in a Market
Law #2: The Offer is 75% of the Battle
Law #3: Defend Your Profits with a Moat
Law #4: The Need for Speed
Law #5: Whoever Experiments the Most, Wins
Law #6: Communicate Clearly
Law #7: Small Budget? Service a Small Segment Well
You should read part one of this article if you haven’t yet:
The 22 Immutable Laws of AFFILIATE Marketing [Part 1]
In any given sport, the best coaches always have a laser focus on mastering the fundamentals. This series is meant for me to figure out and dissect what some of these fundamentals would be for affiliate marketers.

Law #8: Master the Traffic Source

“I don’t fear the man who knows 10,000 kicks, I fear the man who has practiced one kick 10,000 times” – Bruce Lee
There are so many moving parts to running a campaign. Some include analyzing the data, coming up with great angles, networking, etc. It can drive someone crazy trying to figure out what to focus on.
One area that I focus on is competitive advantages.
We’re in the age of spy tools where anyone can see profitable ads. As soon as an offer is blowing up on a network, affiliate managers start Skyping and WhatsApping their top affiliates. Sometimes affiliate marketing can feel like everyone’s copying each other, and it’s a race to the bottom. 
You have to ask yourself – what separates you from everyone else?
It’s not the landing page. Anyone can see your landing page, copy it, and run it against you.
Is it the Offer? It can be, but it’s becoming harder to get the exclusive on offers these days. It’s a risk for advertisers to depend so much on a single affiliate when they can spread the love instead.
What part of the campaign process can you master that no one else can see?
The biggest one is how well you know the traffic source. This includes:

  • Your understanding of how the algorithm works
  • Your relationship with the traffic source itself or a representative
  • Your understanding of the bidding process
  • Your mastery of the targeting options
  • etc.

Everything that I just mentioned is invisible to the rest of the industry. They’re your secrets.
Someone else could copy your exact landing pages, ads, and even run the same offer, but you’ll always have an edge over them if you know the traffic source better.
I think affiliates hesitate to focus on a single traffic source: either it’s bright shiny object syndrome or perhaps they want to feel diversified.
Don’t spread yourself too thin in an industry that disproportionately rewards laser focus.
Stick to one traffic source, and learn everything that you can about it. If it’s a huge traffic source such as Facebook, don’t limit yourself to learning from just affiliate marketing resources. There are agencies and brand that spend 8 figures+ a year – they can teach you a thing or two even if they’re not running affiliate campaigns.
My friend owns a restaurant and I asked him what the 80 / 20 of running a successful restaurant is.
He said, “Have a great location and serve really fucking good food. Take care of these two and everything else will fall into place.”
What would those two things be for affiliate marketing?
Try combining Law #2 and Law #8.
Master a traffic source and have the best offer – everything else is minor compared to these two. 

Law #9: Know Your REAL Numbers

We suck at underestimating the true costs of things.
I flew to Miami last year for a trip, and I budgeted around $1,000 for it. I whipped up a quick Google spreadsheet and typed in the costs for the flight, hotel, and $50 a day for food.
The trip ended up costing over $1,500! Where did the extra 50% come from?
Well, I forgot to account for all the Uber rides.
I met up with friends and wanted to cover the meals.
I wanted to cook for my girlfriend’s family and the groceries added up.
I went to the beach – damn renting the chairs and umbrella isn’t as cheap as I thought.
Can’t chill on the beach without some cocktails, right?
*Cha Ching*

My estimated costs were way off. Fortunately, I had the cash to cover it so it didn’t affect me too much.
But this can be catastrophic if you’re just as careless towards business.
Affiliate marketers have weird math.
I can’t think of any other businesses where people judge their success by how much money they pulled in yesterday.
“Ah bro, we’re crushing it. We did like $5,000 yesterday”
Why do affiliate marketers calculate their earnings like drug dealers?
We’re trying to be Walter Whites here, not your brother’s weed dealer. 
So many affiliates literally think that the affiliate network revenue – traffic costs = theirs to keep.
They don’t have a clue how much their actual overhead expenses are.


  • Subscription costs: tracker, spy tools, hosting, etc. really adds up
  • Office space and utilities
  • Employees and benefits
  • Software costs (don’t underestimate this)
  • Virtual assistants and contractors
  • etc.

These can add up to thousands of dollars.
Here’s something I’ve learned about business in life: shit always goes wrong.
You can’t predict these Black Swan events, but you need to make sure you have the financials to absorb the hits.
This can include:

  • The affiliate network decides not to pay you a huge amount.
  • Someone sues you
  • Your top media buyer has a manic episode and deletes everything from your servers
  • Your accountant comes to you with a huge tax bill

See what I mean? Shit happens and sometimes it’s just out of your control.
So account for your actual costs and make sure you budget enough to cover black swans.
Not knowing your real numbers is like going to war and not being sure how many soldiers and tanks you have.
It’s a disaster waiting to happen.

Law #10: Don’t Get Scammed

Warren Buffet’s rule #1 to investing: Don’t lose money.
You’re inevitably going to lose some money testing campaigns. That’s too bad but it’s part of the game.
I’ve always thought of it like you’re buying data and figuring out what works.
However, I have to caution you against losing money unnecessarily.
There’s a lot of money in the affiliate marketing space – where there’s money, there are shady people. It seems like every month there’s some kind of scandal going on in this space. 
Here are some of the scams that I’ve seen in the industry since I started:

A. Affiliate networks and advertisers that don’t pay

I don’t think anyone starts a network or becomes an advertiser in hopes of scamming affiliates.
Stuff happens.
The advertiser took in more leads than they can handle, and their merchant accounts got frozen. They don’t have the ability to pay.
Or the advertiser decides not to pay your affiliate network for your leads for whatever reason.
The network decides they don’t want to eat up the five-figure loss – so they make up some shit about your leads being shit quality.
Here’s one major tip when it comes to advertisers

1. If anyone misses a payment…pause all traffic. Do not start traffic again until you’re paid.
Trust me on this.
They missed a $10,000 payment. They’re going to give you an excuse saying that the banks are closed and the wire’s on the way.
You keep traffic running because you’re greedy.
The wire’s still not here yet. You’re starting to get suspicious but they keep pushing you for more traffic
“Hey man, I’m so sorry for the trouble. I’m going to give you an extra 20% pay bump. The wire’s on the way, here’s the screenshot of the wire transfer”
(Oh yea, and the screenshot of the wire transfer is photoshopped)
They’re not paying you and they’re just trying to get as much money as possible out of you.
After a few more weeks of this you’re down $50,000 when you could’ve only lost $10,000.

2. Are you working with someone new? Send traffic slowly.

If you’re working with a new network or advertiser, send the traffic in slowly. The trust needs to be earned.
Anyways, I’m not trying to paint a negative picture of affiliate marketing. There are just scammers out there in every industry.

B. Black Market Suppliers

We all know that there’s an underground society in affiliate marketing that is comprised of cloaking, farming accounts, etc.
Well, there’s also people that supply some of these tools.
For example, you wire $50k worth of Facebook accounts. You log in and find out that they’re all dead.
Maybe the latest algorithm change killed the guy’s method. Do you think this guy has a money back guarantee?
No, he’s going to disappear off the face of the earth with the money (and turns up half a year later under a different screen name)

C. Get Rich Quick Schemes

Buy my program and you’ll be rich!
There are a ton of different courses, private forums, workshops, and private mentoring available in this space. Some are good and some are a waste of money.
How can you tell if something’s a good investment?
Check their refund policy. You should be suspicious if there isn’t a refund policy.
How’s their free content? Are you signing up because they showed a screenshot and a flashy car?
Finally, talk to some people that have taken their training and see what they have to say.

Law #11: Knowledge is the Ultimate Currency

Which Game of Thrones character would make the best affiliate marketer?
I’d argue it’s Varys. He’s known as the Master of Whisperers. This means that his job is to gather intelligence throughout the kingdom.
This is the most underrated aspect of affiliate marketing. You need to be constantly researching and trying to figure out what the trends are in this industry.
You can’t rely on blogs, forums, and Facebook groups for this.
It’s kinda like what they say about stock tips – if your friends or co-workers are talking about a stock, it’s probably too late.
You need to do your own due diligence to stay ahead of the curve.
Some simple ways of knowing what’s going on include:

  1. Spy Tools
  2. Talking to affiliate managers and biz developers at affiliate networks
  3. Going to Conferences
  4. Masterminding with Other Affiliates
  5. Talking with your traffic source rep

Besides trying to understand trends, you can’t figure everything out yourself.
You might be a god at angles, but your friend is a master of a traffic source.
1 + 1 = 3
Here’s something that I have to stress: you get what you put in.
You go to a conference spend all day sitting in your hotel. When you go to the parties, you stand against the wall and check your phone. Of course the conference is going to suck for you.
Or you join one of those “Skype private masterminds” that you found on a forum. But you don’t contribute ANY information. The group’s going to die, or the real contributors are going to form their own sub-group.  
You keep asking your affiliate manager what’s hot. You never send traffic, and you don’t have any sort of relationship with them. You think they’re going to hustle for you?

When it comes to information in this space – the more you give, the more you get in return.
Some ways I’ve given in the past:
I’ve bought really nice gifts for some of my top affiliate managers/traffic source managers. Flying to a city to hang out with top affiliate friends. Straight up sharing valuable advice ahead of time.
One major key is to give without expecting anything in return. People can sense when you have an agenda.

Some Things Will Never Change

None of us can predict the future. We don’t know what traffic sources are going to be hot, or what type of offers will be hot.
That’s why it never hurts to focus on the fundamentals.
No matter what happens, skills such as copywriting, conversion rate optimization, and understanding your numbers will always be valuable.
Featured Image by Jan Pietruszka

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                The posts published by Charles are prepared and analyzed, including the author’s own experience…

The posts published by Charles are prepared and analyzed, including the author’s own experience…

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