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Sebastian

Black Box Approach to Affiliating

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by on 08-27-2010 at 04:30 AM (842 Views)
Hey Guys,

I've been scaling my network recently, and having good results. I thought I'd share what I learned over the last few months.

Many affiliates start off with a content & SEO driven approach, which is perfectly sound. They usually rely on a few sites for all their income, and have modest revenue.

I found that taking your network to the next level depends on two skills: outsourcing and scaling.

These two qualities are what set monster affiliates apart from the rest. You probably know who I am referring too. They have networks of hundreds of sites and make 6 figures a month.

Different way to think about affiliating - Forget about SEO :

Rather, think of each site as a blackbox and think in terms of input/output/ROI only. If you think in these terms, affiliating becomes a business equation, and SEO becomes largely irrelevant. For example, instead of improving the SEO of your own site, you could just buy the 3 sites ranking above it. And dominate the top 4 spots of Google for a query.

Here is a great scaling recipe. Scaling successfully means showing an ROI of course.

* Scale by acquisition first
* Scale your new assets by outsourcing

I've been doing both recently with a nice ROI. Last month I bought 6-7 sites, and this month I'm focusing on depth, not on breadth. I'm buying articles for each of these sites, with title tags that will pay for the content and show an ROI.

How to scale on autopilot via acquisition + outsourcing

Let's say you buy a site. With trial and error, you'll get a feel for the variables below:

The input of the black box should be x amount of posts, x amount of links (could be x ezine links, x press releases), etc.. This should give you an ROI in a few months, with around x CPA...

Once you have this down, create a detailed brief, and hire someone you can trust to implement it. Actually have them do everything from end to end (including posting the content.) If your formula works out, and you get an ROI from this, you can rinse repeat, use the income to buy more sites, and build a massive network of strong sites.

When I realized how fast my income was increasing recently, this just clicked in my head. I'm pretty excited to continue expanding this way.

Anyways, feel free to PM me if you have tips about outsourcing effectively.

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Comments

  1. cernus11's Avatar
    Hey Seb,

    Awesome article, I completely agree with you and outsourcing is something I have been focusing recently in other areas of my business.

    I think the hardest part of outsourcing is finding someone quality who you can trust, I always went by the misguided mantra that if I wanted something doing properly I should do it myself. This was largely due to my poor experiences when dealing with outsourcing.

    Anyway the top ballers make money while they sleep, and this can only be done if you have a slick operation like you have mentioned.

    James
  2. Sebastian's Avatar
    Quote Originally Posted by cernus11
    I always went by the misguided mantra that if I wanted something doing properly I should do it myself.

    James
    A lot of people face the same roadblock.

    I just give folks a chance these days. They have my trust from the get-go.

    I find this inspires them to do better work, and also instills confidence in them.

    If they take advantage of that, or don't deliver as well as expected, I simply thank them, and find somebody else.
  3. CasinoKev's Avatar
    Hey Seb, great post man.

    When it comes to acquisition do you approach other webmasters that rank for keywords you want to rank for, or do you take a more passive approach by watching site sales or posting an offer to buy sites?
  4. Planet Mark's Avatar
    Good points Seb.

    Do I detect PAL slowly turning back to the helpful and cooperative place it once was? Lets hope so!

    Mark
  5. Ridge's Avatar
    Nice post man and spot on! Great advice on finding good help, once I understood I could no longer be a one man show and do it all, my life became so much easier. As most people do, I have control issues which I needed to let go of -

    Good stuff/
  6. Sebastian's Avatar
    Thanks guys,

    More tips on this, as I realize I left out some stuff.

    Scaling profitably is easy these days.

    A lot of people are selling out, and seriously undervaluing their sites.

    For example, I grabbed a bunch of sites on PAL for only a handful of CPAs each.

    Basically they were unfinished projects that had a lot of potential.

    How hard is it to make an ROI on that ?

    Just by adding targeted content and letting the site age, you will get to 5CPA-10CPA a month (conservative). The ROI is massive.

    Obviously some ballers do that on a much larger scale than me.

    But every time I buy a site I add xxx, to xxxx income a month, and it all adds up very fast.

    To make this work, you need a better understanding of monetization than the seller, higher CPA deals, and to focus on domains that have potential.

    Then you take these half finished projects and outsource development using a profitable strategy that has worked for you. After only a few months the site pays for itself, and it's all ROI from then on.

    What's awesome about understanding scaling mechanics like this, is that you can apply this to any niche.

    Poker Affiliating becomes irrelevant. Your just making calculated investment decisions, and monetizing sites more effectively than the seller. You can apply this to any niche.
    Updated 08-27-2010 at 10:15 AM by Sebastian
  7. KevinMcC's Avatar
    Cool post Seb. This is one thing I really need to work on - my problem is I suck managing people right now.

    I think it just comes down to, for me, being more organized. This is definitely something I need to work on to grow!
  8. CorryC's Avatar
    Props to you for posting this...

    It may seem simple and straight forward to you or some others reading it. But this is a "secret" that only a small percentage of affiliates can understand.

    nice post.
  9. Sebastian's Avatar
    Thanks Corry.

    Actually, it seems that you have this part down better than most people I know.

    You have an entire team working for you, with Program Managers and stuff.

    I admire that, and think I would definitely have a lot to learn from your experience.

    Thanks
  10. Hazo's Avatar
    Awesome posts Seb. Affiliates of all different levels and standards can learn/get ideas from this.
  11. Lech_Walesa's Avatar
    great idea to use methodology and put some economic rigors
  12. thefarang's Avatar
    Great post and some really interesting things to think about. I think everybody starts off on the "do it yourself" road and then you begin to get tied into the grind of making the money rather than looking for better ways to make it.

    Great post.

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