Jun 28, 2021
Business
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8
 min read

How to Find the Hidden Pockets of Profit in your Affiliate Website

It was Friday evening at my local beach bar in Bali. As usual, the beer was ice cold, and my bean bag chair reeked of clove cigarette with hints of damp street dog.

As the sky vibrated with thousands of glorious shades of sunset, selfies were snapped, bottles were cheersed, and everyone smiled. Welcome to paradise.

Only I wasn't smiling. I stared at my laptop and marinated in overwhelm. I was confused and defeated. I'd spent the week working hard on what I thought to be the key to skyrocketing my business revenue.

But nothing had changed. I'd gotten nowhere. I slammed my laptop shut in frustration and ordered another beer. A large beer.

This article is the story of how I took HomeGrounds.co, an affiliate website in the coffee space, from low-four to mid-five figures per month, by finding and focusing on less.

Find the vital few

Our editorial system was on autopilot, and I'd just discovered the most lucrative use of time in my affiliate website business: sales and monetization.

Therefore, I was ready to focus on growing our affiliate revenue. I knew this meant improving earnings, which came from our pages and affiliate partners.

But HomeGrounds had more than 300 articles and more than 15 affiliate partners. Working on all meant thousands of hours to tweak it all. Where the heck was I supposed to start?

Desperate to avoid the dreaded analysis paralysis, I took the advice pushed by too many online marketing gurus: "just take action." 

Take action meme
Online marketing Gurus be like...

I put my head down and started from the top. It was one of those 'I'm-too-busy-to-appreciate-paradise' kind of weeks, which is the real laptop lifestyle. Friday afternoon found me exhausted but happy to partake in my beloved end of week ritual involving a beach bar, sunset, cold beer while reflecting on the progress I'd made that week.

But as I mentioned, I wasn't smiling on this particular Friday because I realized that trying to tweak every article and nurture every affiliate relationship meant death by workaholism. That was the moment I slammed my laptop shot and ordered another beer.

Sacrificing sleep that week (Like a fool) had me exhausted, so not even the Balinese street dog gangs could wake me from my slumber that night. As soon as my head hit the pillow, I began to dream. Or maybe it was a nightmare. 

A man in a suit was chasing me. The crazy look in his bulging eyeballs was highlighted by his deep brown curly hair and wispy greying beard. He seemed mad, and he grabbed me, yelled at me, and slapped me with a book. An economics book. What the hell?

His Italian accent was thick.

An Italian in a suit. Slapping me with an economics book. An Italian economist? Oh wait, that couldn't be Vilfredo Pareto, could it? ]

This was no nightmare. It was a dream. A message! 

Pareto was yelling, "have you learned nothing!?"

Of course. The 80-20 principle. How could I have forgotten!

Pareto's 80-20 principle tells us that some things are likely to be much more important than others in any group. A good benchmark: 80% of outcomes or results come from 20% inputs and often even a much smaller proportion of inputs.

I needed to find the handful of pages and partners that were generating most of that revenue. 

As I rode my scooter to the workspace the following morning, I blasted my horn and woke every sleeping street dog as usual. But I wasn't worried anymore because Pareto had given me the plan.

Not all pages are equal

Your affiliate website might have hundreds of articles. Maybe even thousands.

We had 300ish. And optimizing each required 5-10 hours of critical thinking, updating, and tweaking.

Which of our 300 plus articles were most valuable? 

We knew our site-wide visitor value (monthly revenue divided by visitors). But I needed a page-level visitor value. 

Getting this data was easy:

  1. Create a new tracking ID for each page
  2. Collect data
  3. Export to a spreadsheet and sort based on visitor value. Highest to lowest.

The goal was to work on the handful of pages that would give us the most significant return. And this data gave us exactly what we wanted; a list of pages ranked from most to least valuable based on visitor values.

We got to work. We improved old articles and tested new affiliate offers. We created content hubs and built more links. Then we funneled traffic from low visitor-value pages to high visitor-value pages. A conversion rate optimization team then worked on everything else. 

And when we acquired a small competitor's website, we had our publishing plan. Again, we just reproduced the most valuable pages.

Our earnings grew predictably - mission complete. 

But this data came with a bonus: It showed us a blind spot costing us money. We learned to question assumptions when it came to choosing keywords.

Keywords based on expensive products with lots of traffic are not always as lucrative as they seem. They can be time-and-money-sucking pipe dreams. 

Consider a typical affiliate keyword targeting commercial espresso machines: 

Commercial espresso machine data

It has all the ingredients of a keyword that make your typical affiliate excited:

  • Low competition.
  • Healthy search volume and SERP clicks. 
  • 10% commissions on $10k-$30k products. 

Cue; saliva.

But this keyword group had one of the lowest visitor values on our site. This seems obvious in hindsight, but, you know, hindsight bias gets us all sometimes.

A cafe owner wasn't about to click and buy a commercial machine online. Maybe they already have a brand they love. Perhaps they want to use a coffee machine sales rep so they can touch, feel and trial the machine in real life before dropping $20k on it.

This wasn't just my blind spot. The last time I checked, coffee affiliate websites continue to battle over this keyword. They are still trying to convince visitors to click a big shiny affiliate link button and casually buy a $20k espresso machine. A coffee machine sales rep's phone number seems like a better idea—simple lead gen.

Click to buy meme

We learned to get into the habit of putting ourselves in the reader's shoes. What problem are they trying to solve?

And this taught us that lucrative keywords are not always attractive. And on the flip side, average-looking keywords can be hidden profit centers.

Here's a vague example (out of respect for the buyer of HomeGrounds)

We found a keyword targeting a strange coffee maker. Everything about this keyword was average; search volume, product, and potential commissions.

So we didn't publish an article targeting this keyword for quite some time. Our competitors were not doing much about it either. In the SEO affiliate game, intense competition usually means money.

Eventually, we targeted this keyword. Thirty days later, we hit page 1 and began earning $500/month in revenue.

A $300 investment (content) required zero marketing (link building) and returned $6k per year. 2000% ROI's don't only happen in Crypto.

You're probably thinking: "what was it about this keyword that made it do so well?"

I still don't know. Maybe it was the perfect combination of keyword data, (lack of) competition, and a unique product. But It wasn't a fluke: we found more of these unsuspecting profit printing opportunities and published them on both of our coffee sites.

Our competitors were none the wiser. But I don't blame them; because neither were we until the page-level visitor value data opened our eyes.

The simple exercise of working out the visitor value of each page meant we knew which pages to focus on and which pages to ignore, which saved us thousands of hours, yet our traffic, revenue, and profits moved up-and-to-the-right.

High five, Pareto.

We then moved onto the relationships.

Not all affiliate partnerships are equal

Once we'd optimized the pages, we started on the partnerships. Again, we wanted to focus on the critical few relationships rather than working on all of them.

The partners sending the biggest checks to us each month were not necessarily the most valuable ones. They were probably getting the most clicks.

My time in the pay-per-click affiliate industry taught me a valuable lesson: trust data, not assumptions. The offer with the highest commission rate isn't always the best. Therefore, always test offers against each, collect data and only then make a decision.

And the data you need in this case is earnings per click (EPC).

High commission rates are tempting. But less-obvious factors like conversion rates or affiliate cookie length can make or break an affiliate offer. EPC data doesn't lie.

Imagine deciding between 2 affiliate offers. You're tempted by the one with the higher commission rate, but the EPC data tells a different story:

Affiliate partner A Affiliate partner B
Product price $100 $100
Commission rate 10% 6%
Clicks sent 1000 1000
Conversion rate 1% 3%
Earnings $100 $180
Earnings per click 10c 18c

Our goal was simple. We wanted to send more traffic to affiliate partners with the highest EPC's. 

Finding these partners was simple; we collected EPC data. Affiliate networks usually provide this. In some cases, we had to work it out by showing a pop-up box to our visitors, which rotated offers against each other. Our most valuable affiliate partners rose to the top.

And then, we worked on building relationships with our valuable partners. Building relationships is the one thing you can't automate, but that's OK because it's a high-leverage use of your time. 

We began by picking the low-hanging fruit. We asked for better commission rates in return for sending them more traffic. We set up exclusive discount coupons for our audience, which boosted conversion rates. We partnered on giveaways. They sent us free products so we could make better content for our reviews. 

The rest of it was a matter of experimenting together. A closer relationship meant our partners were willing to try things because it was a win-win situation: they got more customers, and we earned more.

We set up a 'Free + Shipping' offer with one partner where our most active email subscribers were offered a free bag of coffee beans (they just covered shipping). We still got paid the commission for a sale, and our affiliate partner acquired new valuable customers. And just like that, our email community became a revenue stream.

Another partner wanted more traffic than we could send them, so we proposed a custom advertising package. We negotiated and struck a deal; they got premium real estate on HomeGrounds, and we got a $16k advertising payday.

This all happened because we jumped on calls, brainstormed ideas, experimented together, and built deep relationships with a few key affiliate partners.

Less but better

Tweaking the monetization of your affiliate website is high-impact, $10k/hour work. It has the potential to skyrocket your website's earnings, but you can't do it all. 

I would have self-destructed had I committed to tweaking every single page and partnership on HomeGrounds. 

Instead, by focusing on the most valuable handful of pages and partnerships, we got most of the upside for a fraction of the investment (in time and money).

I'm happy to say I enjoyed many Friday afternoon sunset beers from that day onwards without my laptop. And that 

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