For a couple years I’ve been encouraging fellow bloggers to really de-emphasize sponsored posts and text link ads on their main site(s) – or sites they care about not getting crushed by Google. Google has helped expedite the decline of direct advertising with its frequent algorithmic changes and warnings. It’s understandable to go after the easy money, but I’m absolutely positive that as long as you focus most of your advertisement revenue on direct advertising, your content quality will suffer and you will never be able to “break out” and generate outsized traffic with a consistent revenue stream.
I don’t think hosting a link or sponsored post that is relevant and pertinent to your site once in a long while is necessarily a bad thing. There’s a lot of good content out there that can help readers, and it is your site after all. Just don’t over do it. Growth of readership is where you start making the really large money from CPM, affiliate income, and maybe CPC – I’m talking tens of thousands a month, which more people make than you realize. Most people who make such income just keep quiet.
The focus of this post is to highlight another reason why you should minimize direct advertising and maximize affiliate advertising based on my experience over the past two months.
MORE TIME AND FREEDOM
Many of us blog because we not only enjoy writing and interacting with the community, we are also searching for ways to find more time and freedom to do the things we really want to do. We know that growing a site large enough to allow us for such opportunities is difficult. But we keep the faith because we know it’s possible.
Freedom is the main reason why I left my corporate job after 13 years. I wanted to experience what true freedom felt like. I recently reflected on two years of freedom away from work, and I must say it was quite an exciting experience. But one of the things on my bucket list is to experience startup life during San Francisco’ golden age. I’m now contracting part-time at a financial tech startup as I mentioned in the past, and a lot more work has gone into contracting than I initially anticipated.
For the past two months I’ve been working around 40 hours a week to build Personal Capital’s blog into one of the best corporate blogs in the space. There have been a lot of challenges involved in coming up with the right voice and marketing strategy for the content. There is a lot of collaboration that’s needed as well. As a result, I’m spending about 60% more time than what the contract initially discussed. I don’t really mind the extra work in the short-term, because I really want to overdeliver on results. But longer term, a renegotiation is in order.
One of my concerns about going back to work full-time is a potential negative impact on my writing and income on Financial Samurai. I used to work 50-60 hours a week and then work another 20-30 hours a week on Financial Samurai on the side. But I don’t think I have as much energy now that I’m older, hence the part-time proposal of working 25 hours a week. From a financial standpoint, it would be counterproductive to make money as a contractor and then make less money online.
Because I spent the last two years focusing on affiliate income, I’ve managed to maintain a steady 3X a week writing schedule on FS while working 40 hours a week as a contractor without a problem. Affiliate income is considered relatively passive online income compared to direct advertisement income. Affiliate income is much easier to execute because you know and love the products you talk about already. There’s no SEO or advertising agency to deal with who makes you write a post that might not fit your style. There’s no need to chase down payments, disrupt existing content, or risk any punishment by Google either.
The affiliate income business model basically allows me to write more freely. There’s no need to do any more legwork to try and make more money, unlike those who must continuously search for direct advertisement opportunities. Because my online income is almost like auto-pilot, I am able to focus my attention on my contracting work, which pays a decent income. By doing a good job at Personal Capital, who knows, maybe I’ll even join full-time.
THE BOTTOM LINE
Direct advertising not only hampers your online revenue stream potential, it may very well hamper your offline revenue stream as well. I think most of us like the idea of blogging full-time because we can then write and earn from anywhere in the world there’s internet access. But how much fun is blogging really if you’re spending the majority of your time negotiating direct advertisement deals instead of just writing?
If it’s a new job in a different industry you’re looking for, then affiliate income will allow you to be better at your job because you will have more time to do your job. The better you do, the more money and opportunities you’ll have. Meanwhile, you’ll feel great knowing that you’ll have a perpetual recurring income stream backing you up in case anything changes.
Related post: How can you use your blog to get a full-time job?
STARTING A MONEY MAKING BLOG
I never thought I’d be able to quit my job in 2012 just three years after starting Financial Samurai. But by starting one financial crisis day in 2009, Financial Samurai actually makes more than my entire passive income total that took 15 years to build. If you enjoy writing, creating, connecting with people online, and enjoying more freedom, learn how you can set up a WordPress blog in 15 minutes like this one.
Leverage the 3+ billion internet users and build your brand online. You never know where the journey will take you! There are professional bloggers now who make way more than bankers, doctors, lawyers, and entrepreneurs while having much more fun, much more freedom, and doing less work.
Updated for 2017 and beyond.
Thanks for sharing this! I’ve been thinking whether to use sponsored posts or affiliate advertising and I’m really leaning towards the affiliate advertising now. It seems like more work but certainly a better long term opton.
Thanks for sharing this Sam. Have you written about the step-by-step process on how to begin affiliate advertising? Or know a direction to point me so I can start learning better how this works? I like the passive income approach and it seems like this is the way to go.
In simplest terms, sign up for an affiliate platform like CJ or Flexoffers first. Then apply for programs within their website, and once approved you can find affiliate banner ads and textlinks to use in your blog. It’s easy to sign up and apply to affiliate programs and there are tons out there. Focus on products that you like and use. This makes it easier to write about them in your blog posts. Or just put up a banner ad if you dont want to write a lot.
Thanks for sharing that. Definitely something I’m going to look into.
Sorry my post above is in reply to Brian. The reply mode sometimes doesn’t work on mobile.
Great post Sam. I’m trying to do more affiliate stuff myself. It does take time, patience, and persistence but it does pay off!
I moved away from direct ads based on personal conviction and a G penalty :)
Suffice to say, I am making more with affiliates than I did with direct, spend MUCH less time on my blog in general, and am more proud of the content I put out. Though, affiliate income could easily dry up for a few months at a time, so it’s less dependable (to me). Since my site sucks in the search rankings, I don’t have the type of traffic that grabs onto PPC ads, but since my audience is interested in how we rock a budget, they do listen when I recommend something that I personally use.
It’s all a balance, as I know I personally hate being sold to if it’s a terrible product. Affiliate income can be just as bad as lame direct ads. It’s all about being integrity and transparency (ala Pat Flynn).
My $.02
Hi Jake,
Sorry to hear you got a G penalty :( But on the flip side, I’m glad you’ve taken affiliate income to hear and you’re making more and spending less time! That’s the thesis and hope for this post. By NOT doing so much direct advertising stuff, you open yourself up to more free time to do more.
Sam
I can tell you that one of my sites got hit a few months back by a penalty – though the irony was that I was only monetizing it in that way because Big G decided to hit my rankings with their algorithm updates. The content was solid and I was attracting links naturally but they still decided I had done something wrong and slashed my rankings & traffic. I then had to go from affiliate advertising and contextual ads to private advertising in order to maintain my profits.
That said, I knew I was taking a risk there and it’s the only site I tested the idea on.
With regards to your question about the benefits of affiliate advertising I can see a number – not least that you can get paid over and over again for the same piece of content if it’s driving sales. Even more so if you’re promoting a product or service that uses a subscription model so pays out commissions every month that your referrals stay active.
I’d also suggest that affiliate marketing can be fun and there is a lot that people with the right mentality can learn about increasing CTRs and sales and thus boosting their incomes quite considerably. One of my small sites went from $40 a month to $400 a month in a matter of weeks with a few simple changes.
In short, I’m fully in agreement with you Sam though monetizing a site with affiliate links is arguably more challenging than other types of monetization. Oh, and don’t forget the FTC disclaimers ;-)
Hi Rich,
It’s not clear from your comment what you did to warrant a G penalty. Can you elaborate?
You also bring up an interesting point when you say “one of your sites”. I used to think people only had time to run 1-2 sites, but more and more I’m discovering people with 5-10 sites +!
I wish I had some helpful insight to contribute to the discussion, but unfortunately I don’t have any experience with either affiliate or direct advertising.
What I can say is that as I’ve thought and planned about how to monetize my site in the future (beyond Adsense that is), I’ve really only had affiliate income on my mind. To me, the affiliate strategy seems intuitively the “right” way to go aside from perhaps a sponsored banner here or there. Maybe I’ll change my mind if I become desperate to earn something respectable, but I doubt it.
I still can’t seem to crack the code on affiliate advertising. I will have to sit down or an entire day to figure out a strategy and how I plan to implement it.
I have no doubt in my mind that affiliate advertising is a thousand times better than direct advertising, for so many reasons. It’s pretty difficult to get into affiliate, but if you can swing it, it’s worth it. You are right, most sponsored content is garbage, and while it’s undoubtedly quick and easy money, it’s really not worth spamming your readers, the potential to get hit by Google and the shady reputations of the companies that often want to “advertise” on your site all the time.
I do agree with you, that there are certain times where sponsored content can be valuable, and I’ve seen it done well, but it’s rare.
To be honest I am not a blogger I found this via a blog I read. I have to admit I am sick of going on different sites and seeing the same adverts. I know this is google. I went on roman a clothes site and now I see that advertised everywhere the same with amazon. On your site the homepage had 11 banner style ads on and this page had 6. This may be down to google i’m not sure
You’ve been retargetted. This is big business online!
Good look into the future Sam. Affiliate marketing can be tough though. I think the key is to integrate it into your blog well by writing about your personal experience you have with the product you are promoting. Also most newbies don’t cloak their links which is a must.
Interesting. If nothing else, this post prompted me to go search around the web for more on affiliate advertising.
[…] a dead link somewhere on our blog that is generating $0 revenue because the program is dead.Related:Another Reason To Focus On Affiliate Revenue And Not Direct AdvertisingNo More Excuses Why You Can’t Make Meaningful Affiliate Income Online […]
[…] other affiliate programs, […]