Business Diversification: Diversify your business or Die!
I was trying to think of some catchy phrase to talk about the importance of diversification and the importance of keeping a pulse on whatever industry you are in. The Internet is no exception.
Recently, a friend informed me that we was closing his brick and mortar business that had been part of a local community for roughly 20 years. I’ve got similar stories from other friends with brick and mortar or service related businesses.
Here’s a fact: Business is constantly evolving. You and I must evolve with business cycles.
One of the major technologies that has changed the way business is conducted is the Internet, but I’m amazed at some of my old-school friends and business associates that fail to take advantage of or evolve with the way their particular industry is changing.
Everyone knows that having a website for your business today is important, just as having a business card was a no-brainer.
For nearly everyone of my personal friends or business associates that has run into roadblocks with their brick and mortar or service business, some of those issues could have been avoided or minimized if they had diversified via their website. Selling products or services, up-sells, cross-marketing, etc.
How has your business been affected by the economy or technology changes? Did you diversify your business or did you miss the boat?
With the release of Google Instant Search (see image below) there seems to be much mixed emotion from pay per click advertisers. With Google counting and ad impression if a searcher pauses for three seconds; the amount of time it takes to sneeze or sip a cup of coffee, the advertiser is charged with an ad impression. One of my business associates saw normal impressions for a keyword go from 800,000 impressions per month to over 1.8 million impressions after Google Instant Search was launched. The net effect was it cut their click through rate in half (CTR) and nearly killed conversions for one of their bread and butter keywords.
Unfortunately, for me to do this test, the advertisers in the screenshot below were all charged with an ad impression. I’m guessing this has advertisers (including myself) scrambling to change up our pay per click advertising a bit. What I’m wondering though is how many Google Adwords advertisers are seeing their conversions and CTR (click through rate) drop since Google has implemented Instant Search.
If Google Instant Search has affected your business negatively, post a response below. Alternatively, if you have seen an increase or performance improvement in your pay per click advertising since the release of Instant Search we want to hear from you as well.
The other issue I’m wondering about is what do searchers think about all of the dynamic stuff going on in the background as you start to type in a keyword phrase? Do most users want to see organic and paid results instantly changing as they type in a keyword phrase. Share your thoughts below.
The truth about affiliate marketing and CPA offers. While I won’t call everyone who runs an affiliate program a crook let me share some of the results we have seen in testing with one of our other business associates. Before I do that let me tell you this. Most affiliate companies do not want to pay you a commission. Why? because it eats away at their margins plain and simple.
For the past 90 days we’ve been testing several affiliate offers with one or peers in the industry. We both started with the same offer. Their first month, generated over $50k and we hit $6k. For both of us it represented about a 25% conversion rate on our click throughs to the same offer. During the 2nd month both of our conversions dropped to 15% and now in our 3rd month of testing we are at 10% conversions.
We tested another affiliate offer and saw the same exact results. First month conversions are high and then subsequent months slowly deteriorate.
Affiliate marketing can be lucrative and there is certainly money to be made, just be aware of this. Affiliate and CPA offer providers are always looking for ways to reduce payouts. I’ll even throw this out into the blogosphere as an open challenge for someone to prove me wrong.
So what do the heavy hitters do? The heavy hitters in online marketing have direct marketing contracts with product and service providers. They get paid on a percentage of the overall sales. No affiliate links or affiliate IDs to mess with.
As you look at affiliate offers, don’t get hung up on a specific product, brand or payout. The bottom line is conversion rates and how much your affiliate check is each month. Some offers may pay less, but have a higher conversion rate than offers with high pay outs.
Monitor and track your conversion rates every month. If an offer starts to drop find something else.
Look for more updates to come on this fun and sometimes frustrating area of opportunity.