If You Want To Make Real Money Online, Forget Adsense.
There are better ways to make money online than Adsense.
I know that many people use Adsense as a way to earn some money from their websites. If you'd like to make a little bit of money online, then Adsense is probably the best way to go. If you want to make a lot of money online, then I'll show you how you can do much better than simply using Adsense.
About 2 years ago I got my start with earning money online. What started it all for me was an article about domain names in a magazine called Web 2.0. And I bought a copy at an airport when I was looking for something to read.
There was one thing in the article that really caught my attention. It seems that a new industry had sprung up on the internet: PPC, or Pay-Per-Click. Another fact that I learned from that article was that some people, probably about 15%, use direct navigation, meaning that they don't use a search engine to find what they are looking for, they just type it in the address bar, add on the extension .com, and hit enter. Domain names that get a lot of direct navigation traffic are worth a lot of money. Of course, those names are already taken.
My First Introduction To Pay Per Click
But I was fascinated by the thought of PPC. You could own a domain name, put some PPC ads on it, and get paid when people click on the ads. What a great way to make money I thought. Own a collection of those and you could live off the income they generate. And some people were doing just that. Sure sounded easier than breaking my back doing construction until I die.
I registered and bought about 50 domain names that I thought were pretty decent. My next step was to join a domain parking service. They work with thousands of advertisers and automatically place ads on your domain that are targeted to the theme of your domain.
There are a couple of domain parking services that I joined to see which ones were going to work best. Goldkey, Fabulous, and TrafficZ were the top three, so I joined them all. The domains cost me $300 (50 x $6 each). I wondered how long it would take to earn that back.
As I soon found out, my domains did not receive much traffic. On average, each domain received about one type-in traffic visitor per week. That would be about 200 visitors per month for my entire domain portfolio. What do those visitors see when they come to my domain? A page with a bunch of text ads on it. And how much revenue would those visitors bring? About $12.00. It would take me over 2 years just to recoup my initial costs. The problem was, the $6.00 fee that I paid for each domain was only valid for one year. After 12 months, I would have to pay another $6.00 if I wanted to register and keep using the domain for another 12 months.
Going From Domain Parking To Content Development
As I found out, you can get more traffic to your domains/websites by having content on them rather than just some text ads. By having content on them, the search engines will index your website pages and include them in the search results when someone is searching for something specific. In addition, I learned that Google offers a program called Adsense whereby you can put Google ads directly on your pages and split the revenue with Google whenever one of those ads is clicked.
Having content and getting websites to come up in search engine results pages offered a greater opportunity than simply parking my domains so I began to develop my domain names into websites with content, and applied for an Adsense account with Google. I had read that banks and loan companies were spending up to $20 per click for mortgage ads.
Google doesn't state what percentage of the revenue from these ads they keep and what percentage you get, but a pretty close guess is that Google keeps 60% and the website owner keeps 40%. Not that fair in my eyes, but still, I thought that if I could get 100 clicks per day, that would amount to over $500 per day in revenue for me. That would be close to $15,000 per month.
I was Lured By Stories Of Huge Adsense Earnings
I had read that some website owners were making in excess of $20,000 per month, and some were even making over $50,000 per month in passive income just from Google Adsense. That certainly appealed to me.
To get 100 clicks per day, I would need to get between 1,000 and 2,000 visitors per day, assuming that between 5 and 10% of them would click on the ads. And how would I get that many visitors per day? All the information that I read at the time suggested to use SEO (search engine optimization) techniques to rank highly in the search engine results pages. Top spots for certain searches could result in thousands of visitors per day.
So I begin to read everything I could about SEO. I created my websites according to the best SEO information available. The results? I made it to the top of MSN briefly for a few keywords. Keywords are simply what people type into the search engine. "Mortgage" is a keyword. "Mortgage application" is a keyword phrase. "Apply online for a mortgage" is another. "Best mortgage refinance rate" is still another. "Florida mortgage refinance" is another. There are literally millions of keywords.
It Is Difficult To Get To The Top Of Google For High-Traffic Keywords
I never did get to the top of Google for any keywords. It seems that Google favors established websites and penalizes new ones. New websites have to prove trustworthy before Google will rank them highly. SEO professionals call this the Google Sandbox.
I got to the top of MSN for a few keywords, how did I do? Well, at its peak, I was getting about 90 to 100 visitors per day. Anywhere from 3 to 8 of them would click on the Google Adsense ads. If I was getting $4.00 per click, at 8 clicks per day, that would be $32.00 per day or about $900 per month. That would pay for half of a house payment.
Did I earn that much? Not even close.
You see, in November of 2005 Google made a change that allowed advertisers to bid separately for Adsense ads compared to ads displayed in Google Search Results. Mortgage clicks were still going for $10.00 to $20.00 per click in the search results, but on Adsense, the price dropped to around 25 to 40 cents. I was getting 10 to 15 cents per click. 4 to 8 of those per day amounted to a little less than a dollar.
Reality Never Came Close To What Was Promised
It doesn't take an accountant to figure out that $25 to $30 per month will not provide much of a financial future. The gurus were talking about $20,000 to $50,000 per month, and in reality, $30 per month was the truth.
Considering the time that I invested in trying to set up Adsense income, and the income that I received from it, Adsense was a total failure for me. My best month ever was $116.00. And some weeks I worked 20 to 25 hours per week. That was a far cry from what the gurus were claiming: work about an hour per day and earn $10,000 to $20,000 per month.
All I can say is the gurus are typical salesmen: tell the prospects whatever they want to hear in order to make the sale. Truth? Huh! It doesn't matter. The only thing that matters is make the sale.
In my offline, real-world business, this would never, ever work. I wouldn't accept those conditions in the real world. So why should I try to make it work online? Answer: I shouldn't. It took me 7 months to figure that fact out. It was an expensive lesson more in terms of time than money spent. I probably spent about $1,000 on informational products that would educate me on developing a high Adsense income. I could live with spending that on an education. But I spent so many hours following the directions and suggestions. Those hours didn't provide the income results that I was looking for.
Fast forward to October 2006.
I had read that some advertisers will pay for cost-per-action (CPA), such as filling out a form. There are CPA networks formed to bring website owners together with advertisers. These CPA networks keep a percentage of the fee.
This is where I have been focusing my efforts for the past 11 months. And the results have exceeded my expectations. I've found that it is far better to be near the food chain of internet marketing, rather than the bottom.
The Food Chain of Internet Marketing
Internet marketing is a very broad term. Anything that is advertised online falls under the giant umbrella of internet marketing. Where you choose to be within that giant space will determine how much money you are able to make. Here are the different segments of the internet marketing world:
At the very bottom of the internet marketing food chain we have the minnows. There are literally hundreds of thousands of little mom & pop websites online. How do they earn income from these websites? Most will use Google Adsense to generate an income from the traffic their websites receive.
Google Adsense is also called the contextual network, or content network. This is what I used to do, but not any more. These websites that display Google Adsense ads are at the very bottom of the online food chain. If you want to spend a lot of time creating this type of website and only want to make $100 per month or so, then this is for you. It is not for me.
Next up the food chain are the scavengers. They place themselves in between the bottom feeders (minnows) and those that are higher up the food chain. Primary examples of Scavengers are the search engines. Google, Yahoo, MSN, and all the smaller search engines as well.
Scavengers earn their money from ad revenue. Pure and simple. Bottom feeders attract visitors with the content on their website, then generate revenue when an ad from a scavenger gets clicked. Scavengers attract visitors with their search technology.
Currently, Google is the best at this game. Google makes their money the same way that bottom feeders do: they display ads and when an ad gets clicked on, Google earns a fee.
Scavengers also earn money when one of their ads on a bottom feeder's site gets clicked on, although the scavengers give a portion to the bottom feeder. If you have a method that is better than Google's to rank and display search results that are relevant, then you should become a scavenger. Otherwise, there are better spots in the food chain to be at.
A hunter/affiliate is someone who is actually hunting for a customer. The hunter/affiliate is always attempting to create a transaction between a buyer and a seller. The hunter/affiliate brings more value to the process by converting a click into a sale, or at minimum, a lead for a product or service. This product or service is not his own, but on behalf of a whale (we'll get to those in a minute.)
Hunter/affiliates get visitors to their websites by paying scavengers and bottom feeders for displaying their ads. They pay for visitors by the click. The reason they do this is because they know what to do with that visitor!
Hunter/affiliates are involved in a game that richly rewards a higher level of skill, knowledge, expertise and efficiency. Six figure incomes are common among Hunter/affiliates.
Hunters actually create a valuable transaction between buyer & seller, and get paid handsomely from higher up the food chain for their good work.
Hunting packs are simply companies that group together large numbers of hunter/affiliates. They pool their resources and bring together this big group of Hunter/affiliates and Whales. Hunting Packs earn their income by keeping a portion of the revenue that whales pay to hunters.
Examples of Hunting Packs are Affiliate Networks such as Commission Junction Primary Ads, CPA Empire, and Azoogle Ads.
Hunting Packs add value to the process by bringing large groups of Hunter/affiliates to the Whales, providing lots of customers in one location to the Whales. Whales really like lots of customers!
Hunting Packs also make life much easier for the Hunter/affiliate by doing most of the web design, coding and tracking for them. It's win/win/win. Hunting Packs are multi-million dollar companies with employees, managers, coding technicians, an office, and lots of overhead. They manage the money between the Hunter/affiliates and the Whales. Hunting Packs routinely, and I mean like clockwork, cut 5 and 6 figure checks to Hunter/affiliates every month.
Whales are the giants of internet marketing. A Whale knows the lifetime value of a customer and will pay a hefty price to obtain that customer. Whales use every means possible for acquiring new customers. They rely on Hunting Packs, Hunter/affiliates, and will even hunt for themselves. However, they are at the very top of the food chain of internet marketing. There is nobody above them.
This is where we all want to be, don't we? Maybe, but maybe not. It is possible to operate at different levels of the food chain simultaneously. You can be at more than one place in the food chain at one time.
Whales have lots of things to attend to every day. There are Customers. Inventory. Phone calls. Schedules. Office Details. Credit Card Processing. Recordkeeping. Employees. Sick employees (even worse!). And headaches, lots of headaches. You may not want to be a Whale. You'll likely find that somewhere beneath the Whales and above the Scavengers is the sweet spot online. This is where you can earn a six figure income without employees, overhead, products, a physical office address, and all the other elements and headaches associated with a traditional business, such as a restaurant, dry-cleaner, or retail store.
The Food Chain In Action
To further illustrate how the food chain works, I will explain in detail how it operates.
First we meet Greg. Greg likes going on trips and has two children in college, and a third entering soon. Greg is a hard-working, straightforward, likeable kind of guy with a somewhat subdued Maine accent. Although Greg did drop out of college after one semester, he does make up for it with plenty of street-smarts and real world business experience.
Living on the coast of Maine and knowing many lobstermen, Greg capitalizes on that and creates a website that sells the absolute freshest, live Maine lobsters. He sells 2 lobsters for $114, which includes taxes, packaging, and guaranteed overnight shipping by Federal Express.
Knowing the lifetime value of a customer, Greg enlists the help of Share-a-Sale (a Hunting Pack) to bring lots of hunters, and through them, customers to the table.
Richard, an experienced internet marketer, has an account with Share-a-Sale and sees that Greg is offering $25.00 for every sale that occurs as a result of Richard's efforts. Richard applies to promote Greg's product. Richard is immediately approved.
Richard is a Hunter/Affiliate
Being the savvy internet marketer that he is, Richard enlists Google Adwords (a Scavenger) to advertise the freshest live Maine lobsters. Richard does some keyword research and pays $0.30 cents per click on Google's search results and $0.06 cents per click on Google's content network, which is also know as Adsense.
Richard tests and tracks his advertising efforts, including tracking each keyword in the search results and tracking the visitors from the content network separately. Richard finds that he needs approximately 200 visitors from the content network to create one sale.
Enter Sally (the Minnow). Like Greg, Sally is also a website owner. But unlike Greg, Sally is not a Whale. Sally is a minnow. Sally is happy to build websites all day long and put Google Adsense ads on them, sending her visitors higher up the food chain to Google, Richard, Share-a-Sale and eventually Greg!
Sally gets a trickle of visitors each day to each of her sites. On this particular day, Sally had 200 visitors to her site SallysUniqueAndLuxuriousGiftsOfSanFrancisco.com (not a real site). Of those 200 visitors, a whopping 10% clicked on one of the ads. Sally is receiving from Google about 40% of the $0.06 cents that Richard is paying, or about $0.03 cents per click (we are rounding up on Sally's behalf).
So on this day, Sally earned $0.60 cents from that website (20 people x $0.03 cents each). Google earned the other $0.60 cents from Sally's visitors clicking on the ads.
Richard spent $12.00 to buy 200 clicks on Google's content network (Sally did not get all of Richard's clicks, other content providers got some as well). By spending the $12.00, Richard generated one sale for Greg, and got paid $25.00 for doing so. After paying for his clicks, Richard netted $13.00, or over 100% return on his money in one day. Share-a-Sale received about $12.00 for bringing together Greg and Richard. And Greg received the $114.00 order.
Let's recap for the day:
* Sally netted and received $0.60 cents
* Google netted $7.00 (after paying Sally and other website owners)
* Share-a-Sale received $12.00
* Richard netted $13.00 after costs
* Greg Received $114.00. What was his net?
Well, that depends on several factors. His cost for the lobsters are more expensive during the winter than during the summer. Assuming it was somewhere in between the lowest and highest price he pays, it was about $20.00 for the two lobsters. The foam cooler and box that he ships them in costs another $4.00. The gel ice packs that he includes to keep the lobsters refrigerated cost another $5.00.
It Takes a Lot of Money To Be a Whale
The labor involved in getting the lobsters and packaging them for shipment is another $3.00. Packaging tape, sea salt, wet knaps, and cooking instructions that he includes costs another $1.00. So, the total of his product costs amounts to about $33.00. Additionally there is the $12.00 fee for Share-a-Sale. There is also the $25.00 fee for Richard. That brings the total to an even $70.00.
The last item to be calculated is the Fedex shipping fee. This is expensive. All figures can be verified by visiting the FedEx website and checking the accuracy. When checking to determine shipping costs, you need to know the zip code of origin, destination, package weight and size.
The default size on the FedEx website is 1" x 1" x 1". Obviously, the lobsters will not fit in a box that small. The larger the box, the more the cost, even if the weight is identical. This is because the larger boxes fill the FedEx planes too quickly.
So if we go to the Fedex website, type in the origin zip code of 04101 for Portland, Maine, the destination zip code of 94103, the shipping weight of 8 pounds, and the box size of 8" x 10" x 14", we see that the cost to ship the lobsters is a whopping $64.92.
However, Greg has opened an account with Fedex and this saves him 15% on shipping rates, bringing his cost down to $55.18.
Therefore, Greg's total costs for this sale is $125.18. And Greg received $114.00. Greg actually lost a little over $11.00 on this sale! Such is the nature of the Whale. However, Greg has gained a new customer. When Christmas rolls around, as it does most years, Greg will run a promotion to his customer list and sell 2 more lobsters to this same customer. This time, Greg doesn't pay $37.00 in fees to Share-a-Sale and Richard. So on the next sale, Greg will make a profit of a little over $25.00. And when the 4th of July rolls around again, as it usually does every year or so, Greg will run a promotion to his customer list and sell 2 more lobsters to this same customer, making another profit of a little over $25.00.
Do you see the lifetime value of a customer?
So, to recap who made what for these transactions on this particular day:
* Sally netted and received $0.60 cents
* Google netted $7.00
* Share-a-Sale received $12.00
* Richard netted $13.00 after costs
* Greg lost $11.00!
I now ask you, who do you want to be in the above example? Who worked the hardest? That's hard to say. Sally works really hard designing her websites, filling them with interesting content, promoting them, doing link exchanges, getting publicity, fine-tuning, and all kinds of SEO chores. She puts in a lot of hours just to get her 200 visitors per day so that 10% of them will click on ads and she can earn her $0.60 cents! Google certainly worked hard developing their fancy math algorithms to rank, rate and sort through billions of web pages to be able to deliver the exact results that people are searching for. Google is constantly trying to improve those algorithms to deliver even better results to searchers. Google works hard for their $7.00.
Share-a-Sale works hard for their $12.00 as well. There are account managers, computer technicians, office and accounting staff, and others all dedicated to making sure that the Hunter/affiliates have what they need to do their job properly, as well as follow the rules set forth by the Whales. They do a lot of work behind the scenes and require a larger staff for these purposes.
How about Greg, he had to get the lobsters, package them, and ship them out. And on this day, his customer called at 2:30 in the afternoon complaining that she hadn't received her lobsters yet. She is waiting to go grocery shopping and wants to know where they are. So he tracks the package through Fedex and calls her back stating that they will be arriving at any time. As luck would have it, Fedex delivers the package while he is on the phone with Ms. Customer. 5 minutes later, Ms. Customer calls back to complain that the lobsters are the wrong color: they are green (live Maine lobsters are green and do not turn red until cooked). Greg explains to MS. Customer the details. She proceeds to ask a ton of questions. Greg politely answer them all. All this just for the opportunity to lose $11.00!
What about Richard? Well he spent some time writing some ads and placing those ads. Then he had to track those ads. That was a little bit of work, so he earned his $13.00. He actually earned more than anyone in the entire process of the transaction, from Minnow to Whale. If Richard is experienced, he probably worked the least out of anyone, for the most money. Does that sound good to you? And it gets better....
Tomorrow is Similar To Today
You see, tomorrow, everything is a repeat of today. Sally works diligently for hours on her sites just to get her 200 visitors. Google works on their algorithms. Share-a-Sale works on managing the Hunting Pack. And Greg ships 2 more lobsters, takes more phone calls, and loses another $11.00. But not Richard, he decides to take the day off and go fishing. :)
But he still earns his $13.00! And he didn't work at all. You see, once Richard finds a profitable offer to promote with profitable keywords, he lets that offer run and continues to generate residual income as long as Greg is willing to pay him $25.00 for a sale.
Can you see how being a Hunter/affiliate is the place to be for the highest income to work ratio?
Your goal as a Hunter/affiliate is to find profitable offers to promote and profitable keywords for those offers. And develop a big collection of them. The more offers you have running at a profit, the higher your income will be.
So how do you find the winners? Good old-fashioned trial and error. There are no magic beans to this business. Certainly, after some experience, you'll get somewhat of a feel for what might work and what probably won't, but you'll have to test to be sure. And lots of times when you test, the results are opposite of what you expected. It's like mining for gold: the only way to find the nuggets is to sift through a lot of dirt. Plain and simple.
But, oh, when you find those nuggets! The video shows the potential income over time if you continue to write ads diligently every week.
For More Information
In this single hub I cannot explain everything that you need to know in order to learn how to do everything required to develop an income similar to that in the video. I will write other hubs to teach different aspects of internet marketing.
I'd invite you to visit my homepage and have a look at my other hubs. All comments are welcome, both positive as well as constructive criticism.
Thanks for taking the time to read my hubs. :)