How to lose money with affiliate marketing… why would I you want to learn how to do that?
Simple… when you know how NOT to lose money with affiliate marketing, you can then increase your earnings.
Affiliate marketing is a special industry. It’s extremely competitive, lucrative and also has it’s ups and downs as well… many of which I will be covering in this post.
Without further ado… here are the most common methods for losing money with affiliate marketing.
No one wants to lose money with affiliate marketing, but it’s going to happen. Whether it’s through never finding profitability with an ad campaign or just getting screwed over (which happens) — I have it covered below.
1 – Just Can’t Get It Profitable
This one happens to the best of us and nearly all affiliate marketers when first getting started. You are going to lose money with your first ad campaigns, if not all of them! The important thing to realize is that you aren’t losing money… you are buying data and knowledge to help you make your campaign profitable. This is why it’s so important to track every aspect of your ad campaign, split test and improve with time.
To learn more about the basics of affiliate marketing and what’s working best today, be sure to check out my affiliate marketing 101 course on Udemy. It’s loaded with all of the necessary basic information you need to find success with affiliate marketing, while also covering how to create a successful online blogging and content creation business in the process.
2 – Fraudulent Leads
Unfortunately this is going to happen every once in a while as well. Depending on the offer you are promoting and how it’s structured, it’s a bit easier to determine if you are actually sending fraudulent leads and bad data. For example, zips and email submits are prone for bad leads… especially if they are converting on just the first page submit. However, if you are pushing leads on a sales product or something people use a credit card or Paypal to buy, you shouldn’t be seeing many fraudulent leads.
When it comes to fraudulent leads, each affiliate program and ad network is different. Some of higher scrub rates than others and some may pull the offer from your account altogether if the bad numbers are too high. This is another reason why it’s important to split test not only your landing pages and data, but also the networks you are running offers through.
3 – Non Payment from Deadbeat Networks
This is one of the worst ways to lose money with affiliate marketing because in most cases, you’ve already spent a lot of money to deliver these leads and are just going to be left with a big loss. Deadbeat networks come in all shapes and sizes… which is why it’s important for you to actively monitoring your in/out going payments and also perform your own pixel tracking in addition to the stats provided by the ad network (also known as scraping).
When it comes to not getting paid from a network, this can happen in a number of ways such as them going completely out of business, saying your leads were low quality / fraudulent and just not going to pay you or the network continues to delay payments or sends a minimal fraction and they eventually close up shop and keep all their incoming earnings.
4 – Not Split Testing and Tracking Campaigns
With more competition than ever before, it’s now harder than ever to find success with through affiliate marketing and pushing as campaigns. If you are not tracking the results of your campaigns, you are just begging to lose money with affiliate marketing.
When creating your own landing pages, you need to continually split test for improved conversions. Call to actions, button colors and form placements all come into play when trying to improve conversions. A 1-2% increase might not seem like a big difference right now, but it will over the life of your campaign.
In addition to tracking the performance of your landing pages, you also need to be tracking conversions for both your traffic and the ad networks. Through pixel tracking you can see what target audience is converting best and how you create new landing pages for even more lead generation. You also need to compare your own lead generation numbers versus the ad networks you are working with as well.
Without split testing and pixel tracking, not only are you on your way to losing money, but if you do manage to find profitability you are likely leaving a lot of money on the table.
5 – Lack of Interest and Getting Too Comfortable
Another way to lose money with affiliate marketing is to let your ego get the best of you. Once you finally do start making some serious money with your campaigns, it’s easy to sit back and relax — thinking your campaigns will continue to product high returns for days and weeks to come. Soon enough your campaign starts to take a turn for the worse as you haven’t been actively tracking it’s performance and tweaking your results. A few days later and your campaign is now losing money… so not only has your laziness taken a profitable campaign to negative, you’ve also started losing money in the process.
If this has happened to you, don’t get too hard on yourself — it happens to the best of us and it’s a mistake that’s better made early on than later.
6 – Not Changing with the Environment and Industry
Similar to getting too comfortable and getting lazy with your success, you can also lose a of money by not advancing with your industry as well.
A clear example of this can be the massive movement of site traffic coming from desktops to mobile. Sure, you can still get a lot of traffic and leads through desktop traffic only, but mobile is quickly increasing in size year after year.
The same can be said for social networks. If you are still focusing on Twitter and Facebook, you are missing out on the opportunities that lie within Instagram and Pinterest.
The industry is always changing and you need to move forward with it.
7 – Trying to Game the System
No matter what industry or business you are in, someone is always going to try and game the system. Whether it’s through fraud, misleading traffic or using software to manipulate stats… it’s not only hurting the advertisers, affiliate and ad networks out there, it’s also hurting your strategy for a longterm business model as well.
When fraudulently gaming the system, it’s only a matter of time before you get caught. When you do, your earnings will likely be removed and legal action could be taken.
If you are smart enough to figure out how to game the system, you are probably smart enough to make money legitimately as well.
8 – Not Managing Your Costs
One of the most simple ways to lose money with affiliate marketing is to just not manage your costs.
For example… if you have a web site, blog, ad campaigns and tracking setup, you probably also have web hosting, email hosting, tracking platforms and designer costs as well — and that’s on top of all the money you are spending for data and traffic as well.
A quick way to increase earnings and ROI is to make a list of all of your outgoing costs and see which are really needed. By cutting out an extra $100 a month in unwanted costs, you are looking at $1,200 a year in savings, which then becomes profit.
How much money are you wasting each month in unwanted services?
It’s not often that you are going to see an article on how to lose money with affiliate marketing, but it’s an important topic to talk about — especially for all of the new affiliates and marketers who might just be getting started.
Treat affiliate marketing like a real business and you are much more likely to find success.
Focus your efforts on the boring and dirty parts of the business, such as data analytics, ad network comparisons, competitor research and managing your costs.
Take a look at your existing ad campaigns and see where you might be lacking and how you can start improving earnings across the board.
My name is Zac Johnson and I have been an online entrepreneur for the past 18 years and blogger since 2007. This is my personal blog and I welcome you to the site. In full disclosure, it is safe to assume that I am benefiting financially or otherwise from everything you click on, read, or look at while on my website.
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