This tutorial comes after some discussion on GFY board regarding traffic, Google and what not. What you will see below is a real experience and it turned out quite nice, so be sure to read and comment, we’ll try to exchange as much info as possible.

So, we were working on this site, for which we did an ultra customized site working on WPMU engine. The ultra customized part isn’t really important, the thing is you’ll need to use WPMU or WP 3.x Multisite (see some instructions on how to do it here). This site was a full community setup which communicated in real time with tube section users (it was Mechbunny‘s script which we had to customize for this), webcams, dating and such. Of course, an adult site. And of course, we offered space for blogs for community members.

So, what happened? After 2-3 days, I started noticing most users were spammers creating non-adult pages selling any kind of mainstream product you could think of. At first, we deleted them at sight. Then, we simply killed them with an auto-ban script we wrote. But then I was checking stats and noticed many of those pages were having traffic. Nothing important, but anything from 10 to 50 unique visitors a day. So I took down the auto-ban script and analyzed the traffic, tendencies, results and everything I could measure. And then I noticed this: these spammers were helping this site ENORMOUSLY. We got loads of pages listed, we got a PR3 in 2 months and mainly we got traffic to our main page. 2, 3, 5, 10 unique hits a day, which multiplied by 1000s of pages added up to a pretty nifty amount of traffic…. FOR FREE!

Furthermore, these spammers were ranking high for long tail keywords, so I simply build a few special themes with nice headers/footers and auto-included the latest posts of the MAIN PAGE into their themes and the latest videos in the tube section were added in the footer. Ka-Boom! we went 0 to 20000 unique visitors a day without buying a single hit, 100% organic.

The best part is that those spammers work on a linkwheel scenario, so we had traffic and links coming from many sources and IPs. A win-win situation that only required a good server (which we had) and a simple straight-forward change of philosophy: instead of killing the spammers, let the spammers work for us.

Of course, I assume you can imagine further scenarios, like letting them build the traffic and then redirect everything to your main page, or even visiting their sponsors and change links to yours. As long as they are breaking your TOS, you can do whatever you want. But be careful: maybe being greedy will hurt you more than what it will help you, try to research the traffic and if they’re providing you with good decent traffic, maybe you should let them do what they want. As I said, it’s a change of philosophy and a win-win situation, so, why fix what is working?

Anyway, just try it and lmk how it worked for you!

Coda: you may ask yourself what happened to this site. Well, I can’t provide any info on it since we’re on a process to get all the money we’re owed due to a middle man who screwed both us and the site owner.

WARNING: while innovative, this is a really “crazy” idea, so if you are one of the trend followers, please stop reading. Now, if you’re looking for “out of the box” ideas and you have what it takes (namely an existing program, server, some spare content), then this might be for you.

Before going in depth, I know there are many ways to get more affiliates. Basically, there are 2 main branches to achieve this: You can get them through pure marketing (ads, bonuses, incentives, PR and such) or you can get them through program optimization (mainly conversion and/or retention improvement, but also innovative marketing tools, customer service, payment methods and so on). I won’t go deeper on those subjects since more or less they’re quite known, and those that aren’t are part of the arsenal of tools we provide some of our selected clients.

But this time, I’ll present you a “3rd branch”, somehow a mix of the other 2 branches, although it could be considered something totally new, depending on how far you wanna go. Just make no mistake: this isn’t something spectacular or specially difficult. Like most good ideas, it’s extremely simple, just that most people would never consider it because of its main characteristic: you won’t get a cent off it. Nothing. Nada. Zero. Zilch.

At this point, you will probably stop reading, but if you got to this point, you could hang with me a little more, right?

As I said, you won’t get a cent… apparently (now sounds better, huh? )

The idea is as follows: You have an existing program with a line-up of sites, you have a server. You probably have loads of content. You have processing and probably a CMS. With all this, just build a great nice looking site, with all the bells and whistles and host it on a nice server. Add some good and decent processing and give your affiliates 100% revshare for life (after processing). Yes, I said 100%. I didn’t say 70, 80, 90, not even 99. I said 100%. And I didn’t said for 1 month, or 2, or 6. Not even a year. I said FOR LIFE. And by the way, before you start thinking on some cheap template, no marketing tools and a members area that will never update, I gotta tell you the secret of this is that you treat this site just like any site of yours. Or even better.

Now, sure as hell webmasters will fight to promote your site. After all, they’re getting 100% revshare without any costs involved. So where’s the trick? Well, you’ll give webmasters this site with 100% lifetime revshare barring some conditions, in example, you could add some of these terms and conditions (for ease of writing, I will call this site “A100″):

- webmasters will get 100% revshare as long as they send the same amount of traffic to the remaining sites in your program (don’t be greedy, if they send 100 unique hits to A100, then they should send 100 or more to all the sites in your line-up combined, not each of them)
- if they don’t get to this 1:1 ratio, they’ll get 90% and then a decreasing number each month they don’t get to the 1:1 ratio (ie 2nd month 80%, 3rd month 70% and so on until you get to 50 or 60% or whatever your regular revshare percentage is)
- they will be free to use content for marketing purposes, but whatever they build will be public usage for all members (thus you save money on promo material and your members will get a wide variety of marketing material)

of course, if you want to tight the bell (I’d recommend you to loose it, but it’s your site), you can make that 1:1 ratio to be not based on traffic amounts, but sales. This may scare webmasters, but again, the decision is yours. You can also count traffic based on Geo IP tracking. Either way, webmasters going for this A100 site will promote the sites in your program as hard as the 100% revshare, and furthermore, they’ll push it harder because they can’t risk to fall short. You can even put a 1:1.x ratio if you feel greedy and/or insecure.

Now, as you may see, there’s a lot to win: new affiliates, lots of traffic diverged between your existing sites and a site that you didn’t have anyway (so no loss), competitive traffic, higher quality traffic, people looking for your program just out of curiosity and so on, and so on, and so on.

But wait, this is not all. This is just the tip of the iceberg, because, as a matter of fact, this kind of setup could provide you with a very good income, either by using traditional additional sources of income (upsells, cams, etc) or by using high end non traditional marketing tools that have way more income potential power. But you won’t expect me to spill the gourmet beans just like that, right?

(note: this is an adaptation of my Marketing degree thesis and as such you may have seen a similar post somewhere else since I used it in a couple boards)

When dealing with marketing research and niches, we’ll always find ourselves in a point where applied research requires optimization to make the most out of our marketing budget(s). This point can be planned in advance (ie if we’re setting goals by time frames) or may surge out of necessity (ie, we notice our marketing efforts aren’t working as expected).

Now, if you’re worried this post may be something heavy and tiresome, don’t worry,  I won’t go into deep technical stuff nor research methodology. Instead, I’ll try to explain this in an as simple as possible way, by providing easy to understand examples and then some ideas on how to implement these techniques in a really easy way.

To start, let’s go with what I called the The Sniper and the Machine Gun models. In this scenario, we have two soldiers trying to reach their targets. One of them has a high precision sniper rifle, and the other has a machine gun. At this point I’m pretty sure you’re figuring out what will be this about, but let’s have a look at it:

The Sniper Model

This is the Sniper Model. Our sniper is using few bullets (money/resources) to make a sale by researching the proper way to get an easy target. Thus, the full line goes straight to the heart of the target (or, in other words, make a sale). Now, you’ll see the blue dotted lines that goes to the “body” of the target, “injuring” him, which may lead the target to “survive” (meaning he won’t buy because of a weak call to action or unrelated motives) or maybe he will “die” because of his injuries (meaning that he may NOT buy at that exact time, but may be buying sooner than later).

To add to that, our shooting range has 3 zones: niche targeting, media delivery (proper or wrong choice of media and marketing materials) and competition, and it’s easy to see our bullet will be farther from the target as the zones become bigger. The more accurate and restricted our “zones” are, the less loss in accuracy.

Let’s get the metaphor out of the picture and straight to business:  If we define our niche in an accurate way, our target will be closer to become an effective sale since we’ll have less dispersion. Once we start adding more factors, the dispersion ratio will have a compound rate increase.

Before continuing, let me add something that I know most of you hate to guts, but it’s very easy to use and extremely useful and needed in marketing and economics research: the Compound Interest Function. It’s as simple as this:
Value   =   IV (1  +  R / t)^Yt

where IV=Initial Value , R=Interest Rate , t= times of occurrence per year (every month would be 12) and Y=number of years.

In the graphic above, I’ve used a reasonable deviation of 3.4%, which comes out from the difference between total sales per campaign minus impulse buying multiplied by dispersion factors. So in this simple graphic, with only 3 dispersion factors, we could notice that around 30-35% of our budget is being 100% effective (leads to a sale) while the remaining budget has a 33% of chances of convert to a sale at a later time. Again, this is a very simplified model, you may find out that working with real numbers adds an exponential value of difficulty *

The Machine Gun Model

So we got to the dreaded “machine gun” model. Here, our soldier will use a really high number of bullets to get the same results than the sniper. Take a look at the graphic below:

Here we can see that the amount of resources used to achieve the same results increases in an exponential rate. In the basic example, we have a 360 degrees market with 8 targets, so, to our machine gun soldier it will take 45 bullets to get a 100% target (sale). In other words, the budget will increase 45 times for 100% effective sales. You’ll also notice that brand awareness is a little higher in this model, and that’s why companies going for wide range branding won’t care much about niche refining (this is a very common usage in mainstream marketing, however, in my humble opinion it’s a waste of energy and resources in online adult marketing).

In short, it’s common sense to use the Sniper Model. However, most people uses the Machine Gun Model. Why? Well, because unless you’re part of a certain community or a very knowledgeable person about a certain market niche, the sniper model requires a lot of specialization and the use of every single resource available to refine data. Of course, data research is the most important one, but technology usage, smart design elements, competition status research, innovation, economics and so on are factors to keep in mind. As an example, I honestly doubt any designer could compete with me in certain niches (ie pornstars, glamour and some fetishes) when it comes to results. But, what if I need to do a design for an amateur mature site? Well, 99.99% of designers will say “Yes, I can do that” and come with the same cookie cutter design, just changing the subject. We all know it’s like that, and I can’t blame anyone on that, there’s not a lot of work for designers, and at the same time, some site owners aren’t well informed on the subject as well, so it all comes to a vicious circle.

However, information is power, and I’ve the knowledge to make things different, so why not use it? I’ve seen/heard many times the usual mottos “marketing is useless”, “you don’t need a designer to do a site, do it yourself because you know the niche better” (I gotta admit this is the funniest one, out of tens of thousands of adult webmasters I can count with my hands the number of people capable of doing this with decent results), “I’ve been doing this for years” (yet most old adult companies are closing doors) and so on and so on. And so on. I won’t say anyone is wrong, to each his/her own. However, if everybody else is failing, why keep following the path of failure?

So yes, information is power, and although it’s very uncommon to see someone providing secrets to competition, well, here here are some useful techniques.

Some real life techniques

Marketing Effectiveness Research

First define a budget, no matter how small it is as long as you can do something with it, you can grow it later. Isolate this marketing action by using specific custom campaigns so data isn’t contaminated. Now, choose 2 to 4 marketing models (ie banners, text links, galleries, different traffic sources, same marketing materials with different selling claims/colors and/or any combination of these) on a strict time frame, for example 1 month. Try to keep traffic levels to be consistent throughout the whole time frame, for example, if you buy 90,000 hits try to make those hits come at 3000 per day.

After the time frame ends, you’ll have some amount of data, including traffic (one column per each source), CTR, sales, time frame and so on. Using Excel, input all the data per day (1 row per day) including amount of traffic, amount of traffic to sponsors (or to join page if you have a paysite), amount of sales and a last column should include cost of traffic (if you didn’t buy traffic, use the average value from traffic providers for the same kind of traffic you have). Make a graph with this data so you can see the results at first sight. Do this for each marketing model.

Now, if you kept the traffic flow at the same level, the last column should give you a somehow flat line, but chances are you’ll see several hills and valleys in the other columns. Quite possibly, you’ll see differences depending on day of the week and day of the month. So now, let’s go to data analysis:

a) first thing first, subtract  your initial budget from the total amount of money derived from that campaign. If you get a negative number or a little positive value… well, you’re doing everything wrong, so time to rethink your strategy.

b) take your total number of sales and divide it by 30 (or any time frame you decided to go with) to get the average sales per day. Add it as a new column to your graph, repeating the same value on each row. Now you’ll have a flat line. Check out every spot where the value is above the line, and try to find something in common. For example: are those spots on weekends? at start of month? coming from some traffic source? is there a daytime/nighttime difference? (most probably, yes). Again, do it for each marketing model.

c) now compare the marketing models themselves and you’ll see a lot of information that will help you to diagnose which are your strengths and weaknesses.  Thus, you may end with something like “best results came from Tour A with TGP traffic on Wed around 6PM and 3 AM with geo IP US-DE-UK”

so in this example, it’s very easy to see that all tour versions converts better on Wed to Fri  of Week 1, between 6PM and 6 AM (day/4 means we have divided the day in 4 equal parts, but you can do it with 3, 4, 6, 8, etc. I like 6 myself), with geo IP us-de-uk. We also see tour A converts great on TGP, while tour B seems to be built for SE. Let’s say our original budget was $3000 using 3 tours and 3 different traffic sources all equally divided, thus we invested (or wasted) $66.66 per sale, and common sense tells us to divide our budget in a more efficient way since most traffic fell out of effective range. Now it will look something like this:

Model 1: Tour A, TGP traffic, 3 days a week (Wed to Fri), first week of the month, 6 hours a day (6PM to 12PM), US-UK traffic

Budget explanation: when we started, we had 3 marketing models with $0.463 per hour per traffic source investment ($1000 divided by 30 days divided by 24 hours divided by 3 traffic sources).  Now we’re weeding out 2 traffic sources, 4 days, 3 weeks, 18 hours and we realize that each sale in this targeted model would cost us only $8.33 . See the maths below:

0.463 (hourly investment) x 1 (traffic source) x 3 (days) x 1 (week) x 6 (hours)

so Model 1 real cost per sale is 12.49% of what it was.**

Model 2: Tour B,  SE traffic, 4 days a week (Wed to Mon), first week of the month, 12 hours a day (6PM to 6AM), DE-UK traffic

Now we’re weeding out 2 traffic sources, 3 days, 3 weeks, 12 hours and we realize that each sale in this targeted model would cost us only $22.22 (33.33% of what it really was) . See the maths below:

0.463 (hourly investment) x 1 (traffic source) x 4 (days) x 1 (week) x 12 (hours)

Therefore, although we could use a budget redistribution of $1875 for Model 1 and $1330 for Model 2 (or $1750 and $1250 for budget correction ), we still don’t have a tendency, so we’ll give tour C another oportunity, only that the budget will look more or less like this:

Model 1: $1700

Model 2: $850

Model 3:$450

After this time frame, we repeat the analysis, only that instead we’ll add a “previous time frame growth” column (in %): anything over 0 will tell you we’re on the right path. Any negative number will require further adjustments. Either way, in no more than 5 or 6 months you’ll probably have a defined tendency and a pretty targeted niche

Next Week: Our Sniper Tumbles! (and even more techniques) Updated: New post is on!

*if you’re interested in going deep further into statistical analysis and research, you should use Variance or Standard Deviation to measure the dispersion values

** according to the table, you may say that I’m leaving out the 19 sales, however in this example we’re working on time frame trends and the cost isn’t per sale, but for the best hour spot

When optimizing your site for better results, you need to devise a marketing strategy, for which data research is a fundamental part of such strategy. Now, first of all, let’s define a marketing strategy in a very simple way by declaring these basic steps:

1) First of all, define your budget and existing assets
2) Define what is known as USP (Unique Selling Proposition). This is what you’re going to sell and why potential buyers should choose your product or service over other seller’s products.
3) Define your target and how to reach it that market niche
4) Define realistic goals with realistic time frames

As you can see, very basic, and nothing out of this world, even people that never opened a marketing book knows most of this in an instinctive or logical way.

So, we started our great business and we have a basic marketing plan. Now, even though this applies to online and brick and mortar businesses, we’ll stick to adult marketing strategy for online businesses.

In online business, SEO is crucial. I won’t go deep on SEO since it’s not the purpose of this article, however there’s an obvious direct relation with the subject: not only you can target certain keywords, but you can target different Search Engines. Obviously, you’ll want Google traffic, like everybody else. But… what about the other Search Engines and what about the results for each one?

Let’s see, the key for data research is to have the best possible data research tools. There are many in the market, ranging from $10 or so to 4 or 5 figures software. However, based in a price/quality relation and even as an absolute relation, there’s nothing better than the FREE analytic tool provided by Google: Google Analytics . Say whatever you want about specialty tools, but you won’t find many tools better than this, and with a price of 0 (zero, zilch, nada), you can’t beat it in any way.

As an example, I’ve this project (real case) where I get these amounts of traffic from different search engines:

• Google: 37%
• Bing: 22.6%
• Yahoo: 20.3%
• Baidu: 9.2%
• Yandex: 5.1%

Then I have some irrelevant traffic from Altavista, Tiscali, Terra, Ask and such. Now, please take a look at the last 2. many people didn’t even heard about them, however, they’re pretty big and they may send a nice chunk of traffic. Question is: what kind of traffic? Baidu is from China, Yandex from Russia. If you’ve at least a short experience in adult business, you’ll know that’s not very good in terms of money. And Analytics provides me with a nice tool (Bounce Rate) that proves me right: I’ve the almost impossible to reach 0% BR with Baidu and only 19% with Yandex, while Bing and Yahoo are around 38-40% and Google over 50%. Good news, right? NOT! If I follow the entire paths followed by the Baidu and Yandex users I’ll see that they’ll visit many pages, download everything they can and while at it, I’ll find many hacking attempts and spam.

Interpreting the results I’ll see that Google traffic is bigger and higher quality, people will bounce if they don’t find EXACTLY what they’re looking for at first sight, while Bing and Yahoo are quite good. And Baidu and Yandex traffic is almost all freeloaders which will produce $0.

What to do?

With the available data, it would be good to have some kind of service you can sell to Chinese and Russian demographics. Although chances of making a buck are scarce, if you know those markets and the language you may find the jackpot (we’re talking of extremely big markets discovering capitalism and consumerism ), but for most of us, the best you can do is redirect the traffic to a hub or site you feed and try to juice something out of that traffic.

However, with the “good SE traffic” and aided by the great Google Analytics tool, we can see what people is clicking, what they like the most and what they don’t like at all. Using that data, start some A/B testing and optimize your site as much as possible. You can track trends, hot spots, positioning, colors, browsers, sponsors, whatever you may think of and create very narrow campaigns without much effort, define the prices for ads spots in your site, adjust trades, maximize clicks. Anything you want is possible!

So… how are you planning to spend your day today?

This article I wrote was originally posted at GFY. You can follow the discussion after it, with some very valid and interesting points from other people. Just in case, although I wrote and posted it, this article owns everything to Ed and Agnes, our in-site marketing research consultant and psychologist respectively, I just compiled the information and posted it, nothing else.

After some interesting discussion here, that somehow deviated to a “tube wars” thread, I thought it would be cool to add some pizzazz to the discussion.

Personally, I think, I’m convinced, I vouch and I can swear everything is about RETENTION. See, most people tends to believe the so called “mainstream” marketing rules don’t apply to adult, or if they do, they do it just incidentally. Of course, that is the same like saying people surfing adult sites or buying adult products are not rational human beings in a society with given uses, values and habits and they’re some kind of aliens from outer galaxy instead. This is a perception usually maintained and encouraged by people who has no knowledge on the subject and they’re afraid of losing business, power, whatever.

IMHO, not only mainstream marketing techniques applies to adult: it’s basically the same

So yes, I’ve some idea about what I’m talking about. I’ve a degree in Marketing and was a Marketing Manager for several mainstream companies, including Citibank NA, Deutsche Bank AG and Cinemark Mexico and Argentina. And even when I recognize some differences based in PSYCHOLOGY (question: how many psychologists do you know in adult biz?), I can’t see a single difference when it comes to techniques, research and such. As some people knows, I use to research a lot, work with tendencies data, apply it to design, etc. And frankly, everything is exactly the same, no matter if you want to believe it or not.

Going to the point: one of the basic premises in marketing is “getting new clients is difficult. Losing them is really easy”. Hence, most efforts are put in keeping clients, and there are formulas to set the cost of a new client and the time you’ll need to recover the investment in getting that client (yeah yeah, I know). Anyone that knows the “kitchen” of adult biz knows IN MOST CASES (with some honorable exceptions) it’s the exact opposite to adult business, where efforts are set to get new affiliates and/or members (CLIENTS!) and after that, or even in the same proccess they lose it. A perfect example is the crazy xsells and shady rebillings.

So, most webmasters I talked to are perfectly happy with a 50% retention rate, some of them even BRAG if they get a 50% retention rate. IMHO, that’s obnoxiously low. I’ll show you an example I call the “stalled growth paradox”

Rebilling only 5% more every month shows a notable increase in income

the first example takes 60 sales a month (fixed, no sales loss) and a retention rate of 50%. You’ll see that by month 6 you’ll be stucked in the same numbers. No growth but some marginal centesimal. Of course, it’s worst with less than 50%, although the tendency is maintained.

In the second graph, I’m showing you a 51% exponential retention rate. As you can see, you grow and grow. To make it easier, with just less than 6% constant growth in retention, you’ll double your income by 100% in 11 months. Nice, huh? That’s the beauty of rebilling businesses, and it’s the nature of the game. Many programs are setting for “1 buck today, tomorrow we’ll see”.

So, what does it leaves us with? Well, to avoid loses or stalled growth, you need to increment any of the numbers of the constant, whether it’s sales or retention rate. In a context where sales are going down the hill, your only remedy is to increment conversions at the same rate you lose traffic just to be even, or increment conversions beyond your traffic loss rate. Or, increase the amount of traffic in absolute terms. This will increase costs as well, of course. Depending on many factors, it could be worth it or not. In absolute terms, ie absolute amount of money, big programs will have no big deal with this. However, smaller programs will face losses sooner or later. And both of them will decline any growth ratio they may have.

Now, I won’t show you a graph where sales goes down instead of my fixed rate example or you’ll want to shoot yourself.

In the meanwhile, keeping a member happy is relatively easy and with way lower costs in the short/mid range. Some of them are “adult only” solutions, but most of them already exists in the dreaded “mainstream” marketing.

So yes, the short, easy and rational answer is RETENTION is the key of the game

Feel free to discuss this article and share your thoughts!