Chapter 3: (Bitcoin) Affiliate Marketing - My Dirty Little Secret
Welcome back! Did you do your homework? Have you thought about three ideas you'd like to test in the Bitcoin space? If you did, great! If you didn't, stop reading now and go back to doing your homework. You see just reading this book won't get you anywhere. You have to take massive action in order to reach the success that I was able to reach and be successful. I didn't just sit down and read a bunch of books. I tested out stuff, failed and learned along the way and that's how you get results.
Anyway I hope you're ready since this chapter is going to give you the complete rundown on Bitcoin affiliate programs. If you have your own Bitcoin product or don't plan on becoming an affiliate then you can skip this chapter, although I'd prefer you didn't. Since even if you already own a Bitcoin business with an actual product that sells, using the power of affiliate programs can help increase your revenue stream.
Also, if one of the business ideas you want to test out is an information site or information product for example, you'll still need to find a way to monetize it. Affiliate marketing is the perfect solution for this.
I consider affiliate marketing to be the Blue Ocean of the Bitcoin space. I talked about Blue Oceans before and a blue ocean means a space where there is almost no competition, no one to "eat you alive" like a shark. Spaces with extreme competition are considered Red Oceans.
So many Bitcoin businesses are set up each day and ALL of them are in need of customers. If you can help them bring in those customers, it's a win-win situation. And almost nobody is focusing on this space! So I hope I've got you psyched, now let's get started with Bitcoin affiliate marketing.
Chapter 3.1: How Affiliate Programs Actually Work
Affiliate marketing is a type of performance-based marketing in which a business rewards an affiliate for each visitor or customer brought by the affiliate's own marketing effortsl3.
There are three players in this game:
The merchant
Can also be known as vendor, advertiser, retailer or brand. Basically this is the company in need of customers.
The affiliate
Can also be known as the publisher. This refers to the person who brings in the customers and advertises the brand.
The network
Can also be known as the affiliate network. Sometime a merchant will turn to a 3rd party service to manage its affiliates. This is where the affiliate network comes in. It contains offers for the affiliates to choose from and also takes care of the all of the payments and technical issues. The network also supplies you with a dedicated affiliate manager to answer all of your questions.
Let's take a look at some examples. Amazon, "the merchant", would like to get affiliates on board to start selling its products. It opens up its own affiliate program so that different affiliates can sign up. In Amazon's case they decided to manage their affiliates in-house and not outsource this process to an affiliate network.
Another example would be Sony. Sony wants to open an affiliate program but doesn't have the knowledge or the time to take care of all of the setup. They approach the largest affiliate network
availablecalled CJ affiliate (or in short "CJ") and tell them that they want an affiliate program. CJ sets up a section for Sony on their website which lists all of Sony's offers, terms and conditions.
Affiliates that want to promote Sony will need to head over to CJ and sign up. Sony will, of course, need to pay CJ some sort of fee for taking care of its affiliates and setting up everything, but they prefer that over managing their own in-house affiliate network.
Your job as an affiliate, if you choose to accept it...
As an affiliate of a company, your job is to bring as many sales or qualified leads (contact information of relevant customers) as you can. You'll get paid according to the terms of the specific affiliate program. For example, Coinbase only pays you if you refer a customer who actually made a purchase - this is called CPS (cost per sale) or CPA (cost per acquisition).
On the other hand, you may find yourself promoting a company that pays you each time a person leaves his name and email on their website. This is called CPL (cost per lead). Needless to say that the payouts for CPA will almost always be higher than the ones for CPL.
The last form of payment is revenue share, or rev share in short. This means that you and the company split the profits from what is charged from the customer. This is very common in subscription-based products or in trading services as we discussed before where the client does several repeat purchases.
Payment can also be recurring - meaning if you drive a customer to get a subscription, each time the subscription renews you get paid again. Hybrid deals of rev share and CPA is also available at some vendors.
By now you may be wondering how all of this is done technically. Meaning how does the company know that I brought a specific sale or lead? Great question! Let's dig in...
Chapter 3.2: The Miracle of Online Tracking through Cookies
Now for the technical part. Don't worry you don't need to know any programming or anything like that. I'll explain it all in very simple terms.
When you sign up to an affiliate program, you'll get a unique affiliate ID for that program and what is known as an affiliate link. Keep in mind that affiliate links have many names. For example they can also be called ref links, referral links, hop links and aff links. An affiliate link will usually look like the normal URL plus a tag to represent your specific affiliate ID.
So for example, if I'm going to promote the Ledger hardware wallet for Bitcoin, I can sign up for their affiliate program here. I then get a specific affiliate ID (in my case it's 9621) and an affiliate link:
You can see that the usual link to Ledger's website which was ledgerwallet has an addition of "/r/9621" which is my own affiliate ID tag. This tag is used to track the customers I brought that actually made a sale.
“What actually happens when someone clicks your affiliate link? How are they “tagged”?
Well, when a visitor clicks my affiliate link he is moved over to the merchant's website and a cookie is installed on his browser. A cookie is a small piece of data sent from a website and stored in a user's web browser while the user is browsing that websitel4.
Simply put - once the user clicks your affiliate link, he is planted with a piece of code that now tracks where he came from. If the user ends up buying something on the site, the affiliate program will search to see if there are any cookies installed on the user's browser. When it finds your cookie it will attribute that sale to you, and you'll get a commission.
"Isn't this form of tracking evil? I mean we're tracking users without their consent"
Well that's not entirely true. On each website that uses cookies there should be a clear statement about it. I don't know the exact number, but the vast majority of the web uses cookies today to track user activities. That's how you see all of these ads chasing you around once you've visited some websites. That's also how Google tracks user behavior on over 28 million websites across the webl5.
"And if the visitor deletes his cookies? Will I still get a commission?"
No. In the case that no cookie is present then you will not get a commission. Even if the user surfs from a secure browser that does not use cookies, you will not get a commission. From my own experience most people don't delete their cookies while in the process of purchasing so most of the time you'll get your commission as promised.
Another thing that may hinder your revenues is the cookie length. A cookie doesn't last forever, and depending on the affiliate program terms, you'll know how long the cookie will last. So let's say you have a 30 day cookie in the affiliate program you registered to, and someone clicks on your link but doesn't but anything. If that same someone comes back to the site and purchases within 30 days, the sale will still be considered yours.
One final thing about cookies - the last cookie is the one that counts. So if I bring a visitor through my affiliate link but he doesn't buy, and a day later he clicks your affiliate link and buys - you get the commission.
Chapter 3.3: Bitcoin Affiliate Programs and How to Find Them
Now that we know what affiliate marketing is, let's see what opportunities lie inside the Bitcoin space for affiliate marketing. Below is a list of the top known Bitcoin affiliate programs today. I've created this list from my own experience and all of the programs in this list have been tried and tested by me. For some, I've even published my actual stats and will share them with you later on. Since I do not promote gambling websites as an affiliate, Bitcoin casino websites aren't on this list.
For a list of all Bitcoin affiliate programs available. Since Bitcoin is a very dynamic space some programs may no longer exist (due to company shutdown) and some new may have arrived. There's a post on BitcoinTalk which lists all of the known affiliate programs as well and is updated by various companies offering different programs.
In order to find out if a certain product has an affiliate program just go to Google and type one of the following:
[product name] + affiliate program
[product name] + referral program
[product name] + partner program
Because of the changing nature of affiliate programs I sometimes did not list any details here regarding payouts, cookie length and other things we will cover in the next part. It's better for you to investigate each of these programs personally to see if it suits your needs.
Bitcoin exchanges affiliate programs
Coinbase
Rewards you $1 in Bitcoin for every new depositing customer you bring to Coinbase. This is a self-hosted affiliate program (i.e. doesn't work through an affiliate network) and you need to sign up to Coinbase in order to get started. I did a comparison between this program and Local Bitcoin's program here.
Coinmama
A Bitcoin broker which allows customers to buy Bitcoins with a credit card. Pays up to 3% of the purchase amount.
CoinMX
A Bitcoin trading platform which pays you $15 in Bitcoins for each new depositing customer you bring on board. It is very popular because it accepts credit cards.
iGot
An international Bitcoin exchange which competes with Coinabse. Accepts buyers and sellers from all around the world. Pays a commission of $15 in Bitcoin for each new customer who bought at least 0.5BTC.
Local Bitcoins
A website that connects Bitcoin buyers and sellers. Pays out 20% of the trading fees taken by both sides. This is a recurring payment that ends after one year. Here are my statsfrom early 2014.
Virwox
An exchange that allows buying Bitcoins with PayPal through the use of SLL (it's all explained in detail here). Pays you 20% of the trading fees they charge from the customers. This is a recurring payment meaning if the customer buys again you get paid again.
Bitcoin trading services affiliate programs
AvaTrade
A trading platform which allows customers to trade Bitcoin CFDs. You are able to choose whatever payout scheme you prefer - either a fixed price of $250 for each trading customer or a recurring revenue share of 20%.
eToro
A social trading platform where people can mimic other successful investors. Allows users to also invest in Bitcoin CFDs. You get paid a fixed CPA of $200 for each new trading customer or 25% recurring rev share.
Markets
CFD trading and Binary Options for Bitcoins. CPA is calculated on a case by case basis, default CPA is $150.
Plus500
One of the more successful Bitcoin CFD trading platforms in my opinion. CPA can reach up to $500 depending on which country your customer is from. You can see a breakdown of my revenues with this company back is late 2013.
Bitcoin wallets affiliate programs
Ledger
The creators of Ledger Wallet, the Bitcoin hardware wallet. Payout it 25% from each sale and is paid in Bitcoin.
TREZOR
The creators of TREZOR, the Bitcoin hardware wallet. Commissions are 5% from purchase price and are paid in Bitcoin. You need to sign up to the site in order to get to the affiliate section.
Bitcoin mining affiliate programs
Cex.io
A company which trades in mining power. The mining power you purchase can be used on Ghash.io, the largest Bitcoin mining pool to date. If you refer users to Cex.io you get 3% of the mining power they purchased as commission. You can then use that mining power to mine on Ghash.io.
Additional Bitcoin affiliate programs
Lynda
An online video training website. They have an introductory course about Bitcoin. Payment varies between $10 to $37.5 depending on what subscription the customer purchases.
Udemy
Also an online video training website. They have several Bitcoin courses for sale in different price ranges. You earn 25% of each sale you make. The difference between Udemy and Lynda is that Lynda brings their own instructors and Udemy allows anyone to create a course.
Amazon associates
Probably any physical Bitcoin item or book you can find online can also be sold on Amazon. Commissions vary from 4% to 8% depending on your sales volume. Later on in this chapter I'll tell you about my unfortunate experience with Amazon Associates. I don't recommend working with them (and later on you'll see why) but it is an option to consider.
Chapter 3.4: What to Check When Applying For an Affiliate Program
Before we conclude this chapter and the affiliate marketing section, I'd like to give you a little heads-up about what you need to look for when applying to an affiliate program. Even though the concept of affiliate marketing is the same on every different program, the terms may vary.
When you first sign up to an affiliate program, read the affiliate program terms carefully. I don't just say that to get myself off the hook. Read it ALL and read it thoroughly, as you may be surprised at what you'll find there. Here's a breakdown by order of importance of what to check.
Is the product any good?
I hate promoting lousy products for two reasons. One, it undermines my credibility with my readers, and two, I don't make enough revenue off them because there are many refunds. By the way, if I wasn't clear about this before, when a user refunds a purchase, your affiliate commission is taken away as well.
Before promoting a specific product I tend to either use it myself or read a bit of reviews about it online. I mainly look to see if it's not actually a scam since so many Bitcoin scams are out there. In fact I've been burnt by this in the past. I started promoting an "investment program" called Bitcoin Trader which later on ran off with the investors' money (including my own). Imagine how I felt when angry emails came my way from people who deposited money in that program due to my recommendation.
Sometimes you can even ask for a free trial or a sample to test out the product from the merchant. Just tell them that you want to promote them as an affiliate and you need to get firsthand experience of the product.
If you don't manage to get your hands on the product you're promoting, I highly advise to state that when you promote it. Transparency and credibility are key when trying to build a loyal audience which will follow your recommendations.
What are the payment terms of this specific program?
Here are some questions to ask yourself when inspecting the payment terms:
- How much is the payout?
- Is it a CPA model, rev share model or hybrid?
- Is this a recurring payment?
- Am I getting paid in dollars or Bitcoins?
- When will I get paid? Some companies pay you immediately and some can hold yourfunds up to 90 days from the date the deal was made (e.g. Amazon).
- Is there any threshold to my payment? (Do I need to surpass a minimal amount of sales before I can get paid?)
Some of these questions may not seem critical now, but if you want to build a sustainable Bitcoin business, you'll have to know the answers for these questions. For example, if you're going to get paid only 90 days after you bring in customers that can seriously hinder your cash flow.
Another example is if you get paid in Bitcoin and not in dollars. This means that:
- You are subjected to the ever-fluctuating Bitcoin exchange rate.
- You will also need to pay additional fees for converting these Bitcoins back to dollars (if you intend to do so).
What is the cookie length?
It's important to know if your cookie expires after 24 hours (e.g. Amazon) or if it lasts for three months (e.g. Local Bitcoins). This will affect how many paying customers you'll be able to bring onboard. Since if the cookie lasts longer, you'll get paid even if the customer decides to purchase at a later date.
Are there any restriction on the way you can promote the product?
Some affiliate programs apply restrictions on how you can promote the product. For example, many brands don't like affiliates using their brand name in their paid Adwords ads (if you don't know what Adwords is, don't worry we'll get to it later on). Other vendors may prohibit the promotion of their product anywhere outside of your own website (e.g. PlusSOO).
Is the company Affiliate oriented?
Some companies, like Coinbase for example, have an affiliate program but they don't really "take care" of their affiliates. Meaning there's no dedicated affiliate section, no affiliate managers to answer your questions and no media section where you can download banners, articles or other marketing materials to help you in your efforts.
This is important, because if you're going to invest time and money in promoting a company you need to make sure it's willing to give you the support you need. How can you trust that a company's affiliate tracking is working well when they don't even supply you with basic marketing materials?
You'll notice that this criteria is near the bottom of my list since I consider it to be important but not crucial. I have some companies I promote that have lousy affiliate orientation but still generate me a great amount on income.
Also, if you do get a dedicated affiliate manager, it's best to send him an email or give him a call to say "Hi". You won't believe how much personal connections will get you better affiliate terms...
Is this product already being promoted online?
Finally, you want to check if the product is already promoted online. You're doing this for two
reasons:
- To find out who your competitors are and what they're doing.
- To find out if it's a profitable product to promote - if you see many competitors that's actually a good thing, since it means that money is being made by promoting this product.
"But how do I find out if it's being promoted?"
Simple. Just google the product's name + the word "review" or the product category + the word "comparison". If someone is already promoting it you'll probably see an article about it. Once you find that article, just go to the link which points to the product and see if it's an affiliate link - you already know how they look don't you?
Keep in mind that sometimes the affiliate link will be cloaked on the product's website. Meaning you won't see the affiliate ID even though it is an affiliate link. That is why it's best to check the link on the referring page and not on the product page.
Let's give a short example. Say I want to promote Plus500's Bitcoin trading services. I go online and typo into Google "Plus500 Bitcoin review" and see what comes up. Immediately there are 2 results that I consider to be affiliate websites (mainly because of the website name):
Chapter 3.5: Rules For Affiliate Marketing You Should Live By
I'd like to take a short trip down memory lane and tell you a story about one of my first experiences with affiliate marketing. It wasn't a good one, and I've learned a lot from it. Hopefully you will too.
On August 24th 2009 I got an email from Amazon, here are its highlights:
"We have found your Associate links are appearing as sponsored links on search engines under the term "kindle” and variations of this term. This activity is prohibited by the terms of the Operating Agreement...
... We may withhold any referral fees...
We also ask that you take preventative measures, such as adding Amazon’s Proprietary Terms to your negative keywords. In addition, you will not receive payment for referral fees earned through the use of these keywords. ”
At this point I was almost one year into online marketing and it was my first big success in affiliate marketing. This was my first payment to be received from Amazon and I invested heavily in PPC marketing (Pay per click, will be discussed later) in order to get there, here are my expenses for the three months I was actively promoting my website.
Adwords search network campaign:
Add another $2K from Yahoo and Bing and you get around $12K in PPC expenses. My payout was to be just a little over $21K, so I felt I was on a roll. All the time there was a voice in the back of my head that was worried that I am spending money and still not getting paid (remember that Amazon pays 60+ days after you've made a sale).
I had no idea what the email was referring to. I have thoroughly read the TOS of the associate program and had known that I cannot bid on propriety terms, so I didn't. My only guess was the Keywords in broad match might have triggered ads with these terms. So if, for example, I bid on "eBook reader review" the keyword "amazon eBook reader review" would also bring up my ads.
To make a long story short, I tried everything possible to sort this out (emails, Skype calls, sending keyword reports to show what I was bidding on) but in the end I received the following answer:
"I have reviewed your account history again and confirmed that your ads did appear on Yahoo.com for searches using the keywords "kindle reading device,""kindle review,""kindle book reader,""kindle reviews," and "kindle eBook" between June 19 and July 21, 2009...
While I understand that you do not agree with this decision, it is final based on multiple reviews of your account history. Any further messages regarding this issue will not receive a response."
I was petrified. I spent almost all of my savings at the time on this, and now, not only would I not get paid, I also owed money to people that I borrowed from in order to invest in my different marketing campaigns.
In the end around 2/3 of the amount was paid to me, so I made maybe just a little over $lk on those 3 months. This incident was just one out of many I've had in the seven years that I've been an affiliate marketer. Each incident teaches me a valuable lesson about how to diversify the risk involved with this occupation and that is what I wish to share with you today.
Rule #1 - Test each affiliate program before investing efforts in promoting it.
Today, whenever I choose an affiliate program to work with, I always test it out first. This means that I invest as little amount as possible to test the following things:
- Reports are coming in accurately (basically that clicks are showing)
- Conversions are registered and there's a reasonable conversion rate
- Payments are met on time
Before I start really getting down to business with promoting a certain product, I will have at least 2-4 weeks of testing this out. And since my Amazon incident I NEVER invest my own money before getting paid for the first time. It's always a painful time for a company (even Amazon) to take money out of its own pocket, so I want to see they're good for it.
Rule #2 - Never rely too heavily on one vendor
When I was promoting eBook readers about 92% of my profits were coming from Amazon. That is why I was completely crushed when this happened. Today, as soon as I test out an affiliate program and I see it's working, I immediately start looking for another one with a similar product so I can diversify my risk.
For example, today I promote several Forex companies. So although I can probably make more profit by promoting just one company, I actively choose to promote two, even though one of them is less profitable. That way I always have leverage to negotiate terms and, more importantly, I'm not too reliable on any one of them.
Rule #3 - Never rely too heavily on one product
Whenever you're selling a product to someone, you're targeting a specific persona. In my case it was wealthy, tech-savvy old dudes (surprisingly enough most of my customers were 50-60 years old). And if you know the persona, you know what other products they're interested in.
For example, I could have easily also offered several different tablets that were coming out at the time. Have I already mentioned that you need to diversify your risk? This doesn't mean you need to lose focus and sign up to 10 different affiliate programs but as General Tolwin said in Wing Commander 4, "The price of freedom is eternal vigilance."
Rule #4 - Build a good relationship with your affiliate manager
Affiliate programs that have dedicated affiliate managers put me at ease. This usually means that the company respects its affiliate and that I'll have someone to talk to when I need it. Also, it's important to be noticed by your affiliate manager so he will know to answer you when you are in need.
What I usually do when I sign up for a program is send an email to my affiliate manager with a short introduction about myself and some questions about the program to show that I mean business. This will also help you further down the road when it's time to renegotiate your terms.
Rule #5 - Always use several traffic sources
This one I've learned not from the Amazon incident but rather from a different project. I see too many affiliates that are focused only on SEO (Search Engine Optimization) or PPC or list building. Again, you have to diversify risk, and if this means getting dirty and learning a bit of social marketing or content marketing then it's just something that you'll have to do. Fortunately, this book covers all of the major traffic sources.
Before we end this chapter, I just wanted to tell you that you shouldn't worry if you didn't understand some terms that were discussed in this section. First of all you have a complete glossary at the end of this book with all of the terms that are mentioned here which you can refer to at any time. Second, in Part III - Marketing Your Bitcoin Business Like a Pro, I will explain everything to you in detail so you'll know exactly what I'm talking about.
Homework - Get Started with Your First Bitcoin Affiliate Program
Now that you've mastered the basics on affiliate marketing it's time to get to work. Pick just one program you'd like to test out. I'm telling you to choose only one program because I want you to focus on testing it out quickly and effectively. If it doesn't work out you can always move on to the next one.
So pick one, and sign up for its affiliate program. When considering which program to promote try to think not only of the payout but also about what you thought about in Chapter 2 - what kind of Bitcoin business you'd like to set up. The affiliate program you choose should match that sort of business.
So if, for example, you choose to set up an information site about mining, perhaps you're better off going with some mining affiliate programs than trading services. Also, don't limit yourself just to the list I gave you in this book. Search out for new programs in conjunction with your business idea. You may find something that I haven't written about here and it's a perfect match for your business.
It's crucial you finish all of this part's homework since you won't be able to actually carry out part two's assignments without it. Before continuing to read you need to have the following:
- A clear understanding of the basic concepts of Bitcoin.
- Your first Bitcoin transaction under your belt.
- 3 Bitcoin business ideas with complete SWOT analysis done for each one.
- 1 Bitcoin affiliate program you want to promote and that you've signed up for (optional for information products).
- A clear understanding of what affiliate marketing is and how it works(optional for information products).
If you're all set with these five items, I'll see you and the next exciting part of how to build your Bitcoin business....
