This is a post I wrote for BlackHatWorld in 2009 : http://www.blackhatworld.com/blackhat-seo/making-money/115621-back-basics-everything-you-need-know-about-making-money-online.html
Ok so how exactly do I make money online?
Essentially you are going to be targeting a specific group of people to either sell them a product for some sort of commission (CPA) .You can also create content and package it in an eBook, then sell the eBooks on various websites or privately market it.
Nice…. So I want to start out with that CPA thing… How do I start and what am I doing?
Awesome. Ok so first off, CPA stands for Cost per Action. This means you get paid a specific amount for a specific action. The actions and amount your being paid is dictated by a CPA Network. A CPA network is basically a middle man that collects all the types of “offers” or people looking to have you promote something for them. Here on BHW there are lists of CPA networks, as well as ways to get accepted.
Wait, so how exactly does it work. I sort of understand how I make money, but why is it worth the time for the advertiser or the network?
Well, the Advertiser goes to the network with a product or service they want to promote. If the offer is Per Sale, then the product usually costs more than your commission. That way if the advertiser’s product costs $50 to buy, the network gets a portion of that, you get a portion per sale, and then the advertiser doesn’t have to do any work, and they still make money.
What about that Cost per Lead you mentioned earlier?
Cost per lead is where a lot of “newbs” or people just starting out go to, usually because it’s easy to start making money without much knowledge. Cost per lead works similarly to the Cost per sale, where the advertiser goes to the network with an offer they have. The difference between the two is that the advertiser has done a lot of research, and they know how much money they usually make per “lead” that you send them. It may be easier to understand with some numbers. Let’s say the advertiser knows that on avg. every 100 targeted emails they send, 10 of them buy a product. The product costs 75$ each (these numbers may not be accurate, but you will get the point). This means every 100 emails they get, they make about $375. Instead of them going around and trying to find targeted emails, they make an offer on the network, and will pay you $1.50 per email you get them. Now they’re paying $150 for 100 leads which make them $375. A MAJOR reason people worry about getting “banned” from networks is because their worried that their leads wont convert for the advertiser. Logically, if the advertiser pays you $150 for 100 emails, and not 1 of them makes them money, then they are going to assume that your leads were fake, or fraudulent, and they won’t pay you. They will mail the network and tell them to ban you because your sending fraud leads.
Ohhh so as long as I send leads that “convert” for the advertiser, they will be happy?
Yeah, usually if you’re sending quality leads, they will stay out of your business because everyone’s happy. The advertiser is making a profit off doing nothing, the network is making a portion of what your making, and then you’re happy cuz you have $ in the bank.
Awesome, I’m starting to understand this a little better. Now what about those offers that are like the acai and Google business kits. I’m not really selling anything, but it’s not really a lead either.
Those are called trial offers. How those work is the lead puts in their credit card info for a “free” trial of a product? They usually have to pay like $4 for shipping, but that’s not where the advertiser makes money. In the fine print, they say that if the lead doesn’t call back and tell them they want to cancel their free trial, they will AUTOMATICALLY re-bill the user’s credit card a large amount. Usually somewhere around $45. Sometimes people keep forgetting to cancel their “subscription” so they keep getting rebilled month after month.
Ok, so I have an idea of something I’d want to do for a CPA network when I get approved. What if I just I framed one of those lead offers, and tell the leads that they are filling out something else?
Well, you can try that, but chances are your leads won’t convert for the advertiser… Remember, that’s all that really matters, if everything’s converting for the advertiser, then your made in the shade. Hypothetically, let’s say you framed the offer, and told people they were applying for a job and they need to put in their email to get an interview. Well, if the offer your using is something like “what do you like better, Mario or Pokemon”, when the advertiser tries to send out a product to these people, they’re going to assume they have something to do with Mario , Pokemon, or enjoy games. Do you think ANY of your people looking for jobs are going to want to play the new Pokémon game, and do you think any of these unemployed people are going to have enough money to spend it willy nilly on things they don’t need? Doubt it. Go ahead and try it , it will be a good learning experience to get started, but don’t count on quitting your job because you figured out how to trick people into entering their email. It’s not a long term money solution, which is what I’m assuming you’re looking for.
Hmm, ok maybe I won’t do that. Exactly how much can I make from online marketing realistically?
That question is hard to answer. Are you smart, or stupid? If you’re stupid, chances are you won’t be making a killing online, and you won’t be making a killing offline either. If you’re smart, then the number is virtually unlimited. I know people making $50 a day, and also know people making $25,000 a day. It’s all about how well you can come up with new ways to promote a product, service, and how valuable your time is. After your finish learning the ropes, and how to promote with all the different ways ( ppc, media buys, affiliate marketing, email marketing, social network marketings, private marketing).
Wow, $25k a day? That’s nuts. Maybe I’ll just stay and read on this site for a little before I get started because I don’t want to start doing something before I actually know what I’m doing.
Have you ever had a job where you knew everything you were going to do before you did it? I’ll answer that for you, NO! You have to start somewhere, reading is not the answer. Actually get out there and start doing something, even if you’re doing it wrong, it’s better than sitting on your ass and reading. Think about it this way; let’s say you were going to get a job at Mc Donald’s. Are you going to go on Google and search for how Mc Donald’s makes the burgers, and fries, and how they make the Mc Flurrys? How to work the drive through and how to close the store? No, you’re going to go to your first day, learn a little bit, and hopefully in a month or two, you will know enough to do it all on your own. Take the same approach with IM’ing (internet marketing). Just go out and start right now. Reading methods can be a good way to think of new ways to make money, but if you don’t know how to apply any of it, then it’s not worth anything to you. Go learn how to market through email, so when you find a great email marketing method, you can start using next week, instead of having to figure out how to email market, then a month later you’re going to use the method. Who knows, the method could be done by then and completely oversaturated.
Well, that was harsh. But I guess I understand now. I’m going to go apply for some networks and hopefully get approved and just start on it even if I make 5$ a day for a month, I guess that’s better than waiting to find a method that’s going to make me $100 a day right off the bat.
Yeah that’s the right idea. Things will all come together with the more you learn and you will understand more of what I was talking about, as well as training your brain to think like a marketer.
What type of promotion methods are common with online advertising?
PPC ( pay per click ) which is usually done with adwords. Those are those “ads by google” you see on almost every site on the internet. Too keep this short, ill just list the other methods and you can go google or search bhw for what they mean. PPC, PPV ( pay per view ), PPI (pay per install),Media buys, CL marketing (Craigslist Marketing… This is usually Blackhat), Social network marketing ( twitter, myspace, facebook), and Email Marketing. Those are the ones off the top of my head, but I’m sure there are other types of marketing.