November 2020

By: 
Tom Qiao
 | 
Updated: 
December 1, 2020
2Shares

Welcome back to Flexibility Is Freedom!

Is it just me, or does it feel like the part of the movie where you've already watched enough to know the ending? (either that, or you need to run to the bathroom 🤣)

Yeah, 2020 is almost over but we still have one more month to go...

In any case, the holidays are a time of celebration, gift-giving (including self-gifts 🎁), and spending time with your family (although, I think we've all spent more time with our family, roommates, or significant other than we could have imagined this year).

Anyways, let's cut to the chase - in this post, I provide a summary of November performance for TheDermDetective.com, my Black Friday & Cyber Monday activities (including an experiment with Pinterest ads), and my plans for next year (including 1-2 new websites and a YouTube channel about passive income - check it out here).

Key Metrics

  • Revenue: $1,143 (-8% MoM, +545% YoY)
  • Sessions: 10,580 (-1% MoM)
  • RPM: $108 (-7% MoM)
  • Amazon Risk*: 39% (down from 43% last month)

Overall, November was another excellent month, all things considered.

Business performance was very similar to October with nearly identical levels of traffic, but slightly lower revenue and profitability (RPM).

While Black Friday / Cyber Monday does fall within November, the effects, if any, will either not be very significant or will impact December more (because Amazon Associates credits the sale when items are shipped, not when they are ordered).

Speaking of Jeff Bezos the Devil, I'm happy to report that my dependence on Amazon has decreased to 40% (from 44% last month), marking a 50%+ reduction from 85% at the start of 2020!

Total Earnings and Amazon Risk - Jan 2020 to Nov 2020

On the traffic side, sessions stabilized around the 10K mark after consecutive months of declines since May 2020 (driven by a conscious decision to eliminate lower performing "vs" and some "review" posts with low conversion rates that, coupled with Amazon's new commission rates in Health & Household (1%) and Beauty (3%), made these posts very unattractive to maintain).

Total Sessions and Profitability Jan 2020 to Nov 2020

On the profitability side, I'm very excited by positive trends in the last two months, which I believe reflect a new content format for "Best" type posts.

Let's dive into that now!

New Content Format = Conversion Heaven

In October 2020's Income Report, I mentioned near the end that I was piloting a new content format for "Best" posts to replace my existing templates.

In particular, the new format is cleaner, simpler, and less complicated than the old one.

The TL;DR is that this new format has led to conversion rates of 65-75% compared to only 50-60% with my old content templates.

To refresh your memory, here's an example of the new format:

New Review Format

In this new format, users can convert in 4 different locations:

  • Product image
  • "Amazon" text link
  • First "Shop Now" button
  • Second "Shop Now" button
  • Additional text links in the product description

Now, here's my old content template. Note that the image is not clickable (due to the restrictions of a particular block I was using from Stackable).

Old Review Format

In addition, I optimized the mobile design of the new format.

Okay, so here's the actual data I've collected:

  • In the chart below, I've included the conversion rates of 5 posts, A & B were either created or upgraded to the new content format in November. C, D & E are 3 of my best performing posts that currently still use the old format.
  • Conversion rate is defined as: unique affiliate link clicks (tracked via Google Tag Manager) divided by unique pageviews (tracked in Google Analytics). One drawback of this method is that it does not measure if a user clicks on multiple links as we are using unique clicks and unique visitors instead of gross clicks/visitors.
  • As you can see, A&B outperformed C, D & E in November (65-75% vs. 50-55%). However, I should mention that in previous months, conversion rates for C, D & E were higher at mid-to-high 60% level but have since decreased for some reason.
New vs Old Content Templates

Based on this observation, I'd say the new content format was a huge success and I will be slowly rolling it out across my old posts when I upgrade them.

Black Friday & Cyber Monday Activities

Ahead of Black Friday, I decided to try capturing some delicious holiday shopping cookies which I believed would be worth more than usual. I ran a small experiment with Pinterest ads (expensive!) and did a lot of shopping myself to scale my business.

My Attempt to Capture Holiday Cookies 🍪

When you think about affiliate marketing, you typically think of referral sales, online marketing, third-party advertising, etc.

But when you boil it all down, it's about getting your affiliate tracking cookie onto someone's browser and hoping/praying that they make a qualified purchase within the time limit.

That's the name of the game! (coupon sites know what I'm talking about 😉)

So it seemed to me that the best time to get a cookie on someone's browser would be during the busy holiday shopping season.

My strategy was to create a holiday gift guide for skincare products - promote it to existing visitors using OptinMonster pop-ups, a nascent email list, and Facebook / Pinterest ads.

After creating a massive gift idea post (50 Best Skincare Gift Sets), I setup OptinMonster, sent my email subscribers an update, shared it on Facebook/Pinterest, and waited.

The result? Not a peep. 🤣

Let's start with OptinMonster: they charge you a fortune for their service (to be fair, they have some amazing features and customization options), but you don't actually end up getting too many leads out of the footer bar and pop-ups.

In my experience, I ran desktop/mobile campaigns during the BF/CM weekend and barely got 5 or so conversions across all campaigns.

OptinMonster makes more sense for capturing high-value leads (like customers for SEO services) where it helps you squeeze out incremental leads with exit-intent pop-ups. So I returned it and I'm back to using Beacon lead magnets again (I bought the lifetime deal earlier this year).

My email list and social media audience are both limited so neither provided meaningful traffic.

Although my Facebook page has 100+ followers, I find my posts rarely get likes or comments.

Pinterest Ad Experiment

Seeing as none of my organic strategies worked very well, I ran a Pinterest ad campaign.

I figured that Pinterest was a great fit with my audience (70% women, 50% under 30) and that clicking on ads felt more organic on Pinterest compared to Facebook.

I ran a simple campaign with 4 ad groups:

  • Keyword-focused: 2 ad groups targeted specific keywords and would only fire if a user was using Pinterest's search function
  • Interest-focused: 2 ad groups targeted people with skincare interests and would only fire on the user's home page (browse) and related pins

Here's a summary of the ad campaign results.

In total, I spent $60 USD to acquire 41 clicks (CPC: $1.46) and 12,479 impressions (CPM: $4.80). The ads also resulted in 3 saves by Pinners (which can lead to free organic traffic).

Pinterest Ads 2020

It was the fastest money that I've ever spent (and I didn't really feel like it was worth it).

But it was still a good experiment to run.

I ran the campaign on Thanksgiving Thursday and Black Friday and it ran out of money (I set a budget of $60 and $20-$25 caps on each ad group) by Friday evening.

Strangely, even though Pinterest says they delivered 41 clicks, Google Analytics only recorded 3 visits where the referral source is Pinterest.

Moreover, a total of 22 pageviews were recorded on Thursday/Friday, only half of the 41 clicks.

There's likely some additional analytics setup needed to properly track the Pinterest referrals correctly (I do have the Pinterest tag in Google Tag Manager already).

After running this campaign, I have a much better idea of how expensive running ads are for merchants and brands. It really feels like you have to "pay to play" and most of your initial spending is literally to get market data on keywords and demographics so you can fine-tune your ad spend and achieve positive ROI or ROAS.

Unfortunately, this is not something I have the budget for right now. In addition, as an affiliate, I cannot track the user from referral (Pinterest) to sale (at the merchant) due to the limitations of different affiliate networks and merchant's technology. If I operated my own online store, however, this could definitely be done and then I can optimize ad spend based on which users were actually making purchases on my store.

Another idea that has come out of my Pinterest ad experiment is the idea of cost parity across marketing channels. That is, in theory, running ads to generate sales should cost about the same as paying an affiliate to bring in a sale, in a competitive environment.

For example, if I have to pay $1.00 per click and it takes 10 clicks to generate 1 sale, my effective cost per sale is $10. If an affiliate brings me that sale, I should pay them $10 since it's the equivalent of running 10 x $1.00 CPC ads.

This presents an interesting theoretical model for an affiliate (or affiliate manager) to assess whether they are being paid (or paying) fairly compared to the market rates. You could take the advertising CPC of relevant keywords for the brand (or perhaps the CPC of the keyword that is driving traffic to your post) and compare it to the average commission that you receive per order (commission rate * average order value). Then evaluate whether the implied conversion rate is reasonable or not for that brand.

For example, here are the numbers from a brand I'm working with:

  • CPC of Brand Keywords in Google: ~$0.60
  • CPC of My Target KW: ~$1.30
  • Avg. Commission Per Sale: ~$5.00
  • Implied Conversion Rate (Brand KW) = $0.60 / $5.00 = 12%
  • Implied Conversion Rate (Target KW) = $1.30 / $5.00 = 26%
  • Actual Conversion Rate (Based on My Traffic Sent) = 4-5%

Based on this analysis, I could argue that I am being paid less than market price compared to the cost of running ads in Google. Supposing that the brand does convert at roughly 4-5% (this really depends on the traffic quality), it would cost them $12.00 for each sale using branded keywords and $26 using my target keyword, whereas I deliver them a guaranteed sale for only $5.00 (15% commission rate).

The point at which equivalency is reached would be if the brand can achieve 12% conversion rates with their ad campaigns which makes them neutral to getting a sale from ads or from affiliates.

Perhaps I will try using this model to "persuade" affiliate managers to pay me more in the future. We'll see how that goes ????

Appsumo Mega Purchase

Lastly, I made far too many purchases on Black Friday, mainly for lifetime software deals from Appsumo to further scale my business. Here's the damage:

  • Hexowatch: automates page checks for visual, HTML, technology, WHOIS changes. Great for monitoring competitor webpages, pricing pages (for deals or track competitors), and many other applications. I stacked 3 codes for 25,000 monthly checks - this should be enough to scale with my 2nd and 3rd websites. Combined with SERPWatch (rank tracker), I can now monitor how SERPs changed and what exactly changed on the competitor's webpage. ????
  • Frase: AI-powered content research tool. Kind of similar to Copywritely, which I bought last year and didn't use too much. Frase seems to scrape the top 20 Google results for a given keyword, parses it through their ML/NLP algorithm and spits back a summary of key topics, statistics, sources, links, average word count, etc. I'm going to try using this tool to write my future content pieces and create content briefs for outside writers (that is the main strength of Frase).
  • BigVU & ReMasterMedia: two tools for helping me create video content. BigVU is a video teleprompter and recording software which I can use on my phone to create slightly more engaging videos than my current screen recordings. RMM is used to remaster audio files for better sounding videos.
  • Publer: so this tool is supposed to help manage/analyze all social media accounts in one place, but I've found that it doesn't fully support Instagram and Pinterest yet. Also, I can post my Instagram photos automatically to my Facebook page and Twitter account, so I'm not sure what value this tool will actually have in my tech stack. Still, the reviews were amazing so I'm going to dig deeper to see how I can use this one to grow my social media traffic (one of my key goals for 2021).
  • InSignal: a cheap alternative to Hotjar (heatmaps, user screen recordings). If it turns out to do 50% of Hotjar, it's already worth the price ($49 lifetime deal).
  • Appsumo Plus: I finally plunged on Appsumo Plus, their premium membership. Mainly because I save an additional 10% on my Black Friday order, which makes the membership only about $30 extra. It comes with free KingSumo Plus which is a software tool for running giveaways to increase email subscribers (something I'll try on my site soon).

Migration to Cloudways (Adios, Siteground!)

And my last Black Friday deal was getting started with Cloudways, a managed hosting company that was recommended by a few Facebook groups and websites. Back in September, I was very frustrated with Siteground due to how they handled and treated my website due to a plugin's malfunction which caused a huge server overload.

I have also noticed in the time that I've been with Siteground that there are occasional 500-level server errors and Google Search Console even alerted me about such an instance once. This is the most concerning problem for a website to have...

Although I do believe that Siteground is still quite good, for the price you pay (I paid $214.20 for 36 months or $5.95/mo), I know that it's past time for me to move to a managed host where I have more control over the website's allocated resources which should result in a faster and better user experience (and no complaints from Google, hopefully).

First, I have already migrated F is F to Cloudways, pending a change to my nameservers at Cloudflare. That will give me time to test out Cloudways (which is only $10/mo for their cheapest plan) and fix any bugs before migrating TheDermDetective.com.

I'm cautiously optimistic about this move, but I know from past experience that migrating a website, especially a money website, is a painful experience and you should expect at least a few hiccups and problems (like my migration to Kinsta early this year, which I then cancelled and switched to Siteground instead).

Next Steps

Looking back on this year, I'm proud that I was able to overcome many hurdles, particularly the Amazon Associates rate cut, and eventually achieve my target of $1K/month (this was a goal I originally set in 2019 which was deferred to 2020).

In many respects, the Amazon event was a net-positive in the long-run because it forced me to diversify towards alternative merchants where I eventually came across much better paying and converting programs, especially on the private side. Today, some of these merchants generate as much commissions as my entire Amazon account, but with far less traffic and fewer orders.

It's made me realize that with the right partners/programs and high-converting content formats (as we discussed earlier in this post), you can generate a respectable amount of revenue off of lower volume keywords that competitors may not be looking at. This really resonates with me as I've seen in the last 1-2 years of ranking for certain keywords that new competitors will come into the market or existing high DR competitors will write about your topic and in one case, competitors will just steal most of your content (probably their writers, anyways) and outrank you. This makes SEO feel like a hamster in a wheel, constantly running to stay in one place, not quite the passive or semi-passive stream of income that I had envisioned for this business.

For 2021, my overall goal is to reach $2,000-$3,000 of monthly income with TheDermDetective.com, via continued content creation, optimization, backlink purchases (and eventual organic outreach campaigns), etc. plus another $500-$1,000 from a new website (or two) that I will start building next year.

If I can achieve these two goals, I think that sets me up nicely to move more into the portfolio management position and outsource more of my writing/editorial and technology roles to writers, VAs, and perhaps a part-time employee.

For my new websites (or digital assets, as they will include social media accounts and other forms of value like backlinks, brand relationships, etc.), I'll be recording my steps as I go on my YouTube channel in a free online course (see my playlist here). I don't have aspirations to become a YouTuber but hope that interested people will find my videos and potentially follow them to create their own passive income businesses. ????

For my next venture, I do want to make sure that I learn from my mistakes and explore new avenues of growth in the digital marketing space:

  • Industry/Niche: I will most likely NOT be doing another health/fitness/beauty related website given i) I already have one, and ii) industry-specific headwinds for small businesses like Google's 2018 Medic Update (known as E.A.T. in the industry) which favored larger, more reputable websites like Healthline for health queries, iii) low commission rates for health products on Amazon (1% Health & Household), and iv) gross oversaturation of this industry/niche by bloggers and affiliates
  • Monetization: I would prefer to monetize 90-100% outside of Amazon's ecosystem, if possible, otherwise, I am willing to accept something like 25% maximum exposure if there are really good alternative programs. So maybe in the outdoors niche, you promote 25% Amazon and 75% REI and niche outdoors merchants.
  • Profitability: in my experience with TheDermDetective.com, I've seen merchants with EPCs in excess of $100 per hundred clicks - effectively $1.00+ CPC, so it's almost like you're getting paid for every click. I would like to find similar paying/converting merchants with high EPCs (say $80+) so that I don't need as much traffic to create the same level of earnings. This is especially important where the industry/niche is very competitive and it's difficult to rank or to maintain rankings.
  • User Engagement: much of what makes a "niche" a niche is the characteristics of the target audience and how engaged they are (more engaged = more likely to purchase online or sign-up for newsletters, etc.). Skincare is actually a decent choice here as people typically want to get rid of a skin problem or they are a "skincare enthusiast". I want to make sure I've found a target audience who has urgency (time is of the essence to an extent), agency (they make their decisions themselves), and proficiency (they understand what they need to do to an extent).
  • Social Media? With TheDermDetective.com, I really haven't dived much into getting social media traffic and measuring the conversion rates of that audience. In a world of more "Tik-Tok" and browsing/discovery channels (like Google Discover), it's also important to stay on top of these massive sources of traffic, in addition to SEO.
  • Products/E-Commerce: in the long-run (say 5-10 years), I feel that affiliate marketing will continue to decline in terms of attractiveness/profitability, as Amazon has made clear to many affiliates. Part of the value from affiliates is their ability to deliver sales on 100% commission (no sale, no commission). However, as merchants, especially the big ones like Wal-Mart/Target, etc. get smarter at optimizing their digital marketing efforts (via ads, social, SEO, direct, etc.), the need for affiliates will generally decrease and this will be reflected in reduced commission rates. On top of this, we should also consider the ever-expanding inventory of digital "real-estate" - Google ads, social media, the next Tik-Tok, apps (build-in advertising). Unlike real real estate, digital real estate can be created with 0 marginal cost - it just requires a user to search or browse. This expanding inventory will eventually reduce affiliate profitability as well since the two are direct competitors as marketing channels (and should be equivalent in a perfectly competitive market). So the solution, then, is to expand beyond affiliate marketing and offer my own products/services which would have higher margins, opening the way to ad campaigns and more expensive marketing channels.
  • Brand: perhaps above all else, I believe that what makes a digital asset successful and sustainable is a defined and memorable brand in the eyes of its target audience. It sounds obvious, but in the online world, there are (practically) no geographic boundaries to competition (as with local bars, restaurants, barbers, etc.). When you remove these limitations, you will find that the best performers (say the top 10%) will attract the majority of the attention/revenue/opportunities (say 90% of everything). This is because there are no logistical/geographic constraints to prevent the "best" from serving everyone who is interested (unlike an expensive restaurant that requires reservations months in advance). If you do not create a brand that can hold its weight with your audience (we call this "influencer marketing" and such these days), you may end up having to compete on price and then it's a race to the bottom where the cheapest product/brand wins (you see this with many Amazon products, especially in the technology sector). So in summary, I'll be looking at opportunities where I believe I can create a brand from scratch, start in affiliate marketing and potentially move into e-commerce, distribution, or wholesale in the future.

Thanks for reading my income report and stay tuned for December's annual review!

Stay healthy and feel free to drop a comment below ????

Until next month,

Tom

2 Shares
2 Shares 423 views
2 Shares
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram
Share via
Copy link