A guy from college set up a site that sells ringtones. Last month, he cleared $175,000. And he’s popular. Everyone I know knows someone who knows him. More accurately, everyone I know knows someone who knows of him. He’s the new guy that had a bad experience in Vegas – you know, the one who woke up in the tub of ice missing a kidney.
Don’t get me wrong, getting rich via the interwebs isn’t just the stuff of urban legends. “Guys from college” are doing it all the time. And you can too, just find an easy way to make money and then make it scale.
I don’t know how to make easy money scale. Scale is tough. Our efforts in scale have always resulted in longer hours, more people, more space, increased expenses, and sore eyes. But like I’ve already confessed, we gravitate towards making money the hard way (pulp is a service agency, and wellstream provides licensed enterprise health tools.)
But partially through working with clients and partially through experimentation, I know a bit about the non-service, non-enterprise side of the interwebs. I know that affiliate marketing and contextual advertising is not passive income. It takes work. The barriers to entry and the barriers to success are on opposite poles. And everyone I know that has crossed both has sore eyes.
So if you’re looking to get rich, you might want to factor in some long hours. But if you do find a way around it, be sure to let me know.
10 Responses to “Making easy money scale”
I am tryin too!
Shoemoney was/is supposedly big into ringtones too, and I know a bunch of guys are under investigation from the Florida AG for ringtone fraud. Scott Richter (spam king) I believe is getting sued by MySpace again as well for ringtone spamming. This is a huge, but often shady market. Jon at wickedfire.com was involved here as well (not sure what he did) and Jon knows BH SEO (I did not say that is what he does, but he does know it). I believe there are about 20 affiliate networks being sued in ringtone cases.
Oh yeah, this article was about scale, not necessarily ringtones. One of our clients only nets about $.015 (yes 1.5 cents per click) we just scale the heck out of it. $.015 a million times ends up a nice $15k monthly profit. Yet, we are always trying to scale everything…some things just do not scale well. Rather than always scale, we do old school economics oftentimes with simple profit maximization, unless we can get a volume bonus :)
More to come if other comments on scale follow. This could be a great “how do you scale, tactics and strategies” post.
Hey Greg. That’s definitely where these posts need to go – strategic scaling. I didn’t call Shoe out specifically, but he’s always first in my mind when the ringtones example comes up. He’s also someone everyone seems to think has passive income nailed, but he works as many hours as anyone.
I’m trying to break the link between scaling and sprawl. Doing more shouldn’t have to require more people, more space, more expense, etc. regardless of industry (development, sem, whatever.) We went from 8 employees to 11 this past year, so we’re in the midst of a mid-life (mid-size?) crisis. There’s a lot self-examination going on.
Ok, in an effort to get other people to post…here is one way we scale one part of our business for each client [I will keep it focused to scaling a PPC campaign on any search engine].
a. 75% of our total revenue comes through performance based marketing…we need people to take a desired action (buy, fill in a form, click, something). As a result, we must know the following metrics/elements (since this is paid search): 1) action needed to be taken, 2) number of clicks to make that action occur (conversion rate) 3) payout for that action (commission), 4) quickly calculate max bid (commission x conversion rate). Now we are ready to start, atleast phase 1.
b. Build out ad campaigns (lets say on AdWords) with individual tracking by ad group, or atleast by campaign at a minimum. Should I track by specific keyword; too micro for us, but if you have time for just stats in a day, go ahead. Make sure to organize your AdWords acct based on a strategy, use geo-targetting when needed, etc.
c. Set initial bids all at the max bid. Why? You should atleast break even (assuming you get traffic) and Google will make the profit (if any for you). Key here is you are still testing what the clicks are actually worth.
d. After 500 clicks or so, you will know what traffic is worth. Now, is it profitable? If not, bid less. If so, where can I get scale to expand.
e. Ad more ad groups, expand to yahoo and msn, try out content, alter underperforming ads. Turn off money losers and turn up winners. Every brand that you can market, you can make some profit, if even just $10 if you know your economics and track.
f. Create next campaign while this one works for a week. We will revisit what to do next shortly…
Oh yeah, I forgot to mention, to get scale…you need to repeat the above, over and over until you find one you can truly scale. Then ride the horse until the horse dies…for it will die. All should make you profit…all will not scale. IN fact, few will scale. But, be smart, identify that one gem when it happens and then bust ass (seriously work all night) to make it scale. We have had campaigns go from $0 to $2500 of decent margin revenue daily happen in hours….and die in just a few months. But man, those months are FUN!
I’ve had PPC do very well in the past, but got out of the game because the constant gardening needed to keep it growing. I’m now out of that game and into another. My current venture is more about scaling user base, so I use a lot of the same strategic tactics to market my brand that I used to use to market others. I’ve taken SEM ideas into Web 2.0 and in all honesty, it doesn’t seem to be going well. The audiences are different. Digg and Reddit are where I’m starting to see action. I’d be interested to hear if anyone is having luck plugging social media generators into PPC campaigns.
I have a buddy that is big into Squidoo. I am not sure I like the strategy for all I believe you are getting of value is link popularity in the SEO game. I would rather control the whole page/lens. But, he is getting at least 50 clicks a day there and each click leads to about $.60 profit. That is just 1 lens.
Sorry I cannot share more…I am not a Squidoo pro.
@Greg – Squidoo is interesting. I’ve never played with it for [performance-based] profit, but the SEO angle is pretty strong. I don’t think Godin meant for it to become what it has. It’s only a matter of time before Google squashes it down a bit.
@Chris – I’m interested in the same (social media influence.) My “area of expertise” is not in the ppc realm, but the audience factors are the same. Digg scares me. Reddit and StumbleUpon are more my speed. All these tools are readily available – makes me feel dumb not leveraging them more effectively.
[...] anyone that didn’t read Greg’s comments on the topic last night, you should take a look. IDC is a case study on knowing how to spike the things that work and lose [...]
I will try to get my friend Travis to join these comments and share some of his Squidoo and Web 2.0 organic traffic results. Though hhis scaling takes more time than a PPC campaign, I assure you he has a great mind on how natural traffic aggregation works from his many Squidoo lenses, to WordPress niche sites with plug-ins, social bookmarking, blog commenting, article distribution, etc…he does each of these and does them well in an effort to give good content, yet build valuable traffic.
As for me, I only know search scale, and the only immediate way to scale it in seconds (now that Altavista is 7 years out of importance) is via PPC on AdWords, Yahoo SM, and MS AdCenter.
The coolest thing about scale is how addicting it is…refreshing stats and seeing them go up by $100 in a few minutes/hours, not wanting to sleep as you want to continue the grow, waking up just to see how much it scaled, the imminent death/slowing that can happen immediately or in a while, the chance to still double again tomorrow…it is like trying to sleep after 6 RedBull Vodkas…you need to sleep, you want to be awake. Once you scale, you are always looking for scale.
A real example right now I am continuing to try to scale (sorry no specifics on the merchant) went from $ rev to $200 then $300 and then $400 in rev in 3 days. I believe it should be a $3000 daily market with 50% margins. I cannot get it there. I have topped at $500 some days but then margins erode. I have pushed a couple days to $800 and margins drop to 20%…So I actually make more at $400 rev than at $800 revenue (oh yeah, the number we really care about is profit)…revenue is easy to get…millions are available at break even. So now I have to decide, does this thing actually have the scale I am looking for? Ideally, I can get it to atleast $330 daily profit on autopilot, but then it is just a cow. We look at cows weekly, we watch stars hourly sometimes. Don’t get me wrong, cows are great, but stars keep you up at night. Dang I want this one to work out! I will spend another 3 days looking for that twinkle…please become a star…sleep is overratted.