February 1, 2008
Big Payouts Big Lies?
I get this question pretty frequently, and just got another one yesterday, so I thought I’d write a quick note about it.
The recent attention to this comes from a new site out there called S.eriously.com, published by an affiliate marketer for the purpose of displaying the various big payouts that some affiliates claim to be earning.
There, you see screenshots and photos of paper checks with 5 and 6 figure amounts, in some cases very high 6 figures for a month of work.
The question I get is, are they real?
I don’t watch closely enough to be able to judge whether any individual is capable of earning those big dollars and I don’t care to speculate. But I can tell you that numbers like the ones you see posted are certainly possible. They’re not even the biggest monthly payouts that I’ve seen or heard of.
But here’s the thing. There’s a big difference between gross revenue and profits. You could get a monthly check for $1M but it may have cost $950,000 in PPC advertising spend to earn it. Still $50,000 is pretty sweet profit for a month for any individual, even for a small company, but it’s not a million. (Just the same, that $1M payout may have cost $1.1M to earn.)
I’m guessing that many of these guys fall into that category.
I’m not knocking it, The business model of spend a dollar to earn a nickel is not a bad one if you can scale it. And regardless of the profit, generating sales and commissions at that magnitude is no small feat. If you can find something that produces at that volume, there’s got to be a way to make it profitable.
It is dangerous to run so close to the edge, so be careful. It’s very easy to lose your shirt in PPC arbitrage.
As for why they feel the need to brag about it? Marketing, and pretty effective marketing at that.
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Yea it would be interesting to know now much they are bringing home from those amounts. I agree that a lot would most likely be taken to cover their ppc costs.
I regularly get people asking me how to make money online. A while ago I was telling people that it’s easy, I could make them a million online in no time all they needed to do was fund me with two million dollars. Hardly anyone got the joke so I stopped saying it. It’s really not that difficult to generate big revenues with Adsense or some affiliate program if you know where to buy good traffic, all it takes is some seed capital to start buying. The real trick is keeping your margins up so you make a profit.
Our company has a affiliate program and some of the affiliates are earning six figures a month. However, many are earning three figures while spending four. The biggest earners in our program have “special relationships” with high traffic websites. This is something the average “little guy” will never benefit from.
This is a great post, although I feel like most people who ask these questions are still going to be so in awe of the check size that they won’t realize that you have to spend money to make money.
As I read this post I thought that last statement was a bit ironic - since S.eriously.com just got a free plug on Jangro Press
People like to hear a success story. Aren’t you more likely to listen to a guy who got a $100,000 check than a guy who got a $1000 check?
Good one Peter. I think you even used that joke around me. I got it.
And hey, those check sizes ARE pretty awesome. I could show you some scary big AMEX bills. Maybe we should all post a few of those. They’re a bit more sobering.
And that’s why I called it “effective”, Jeremy. We’re talking about it.
Good for him getting publicity on OTHER people’s work.
Well, I had one of those huge checks on my hands (not mine unfortunally)from a very good friend and marketer.
Hi Scott,
Michael here from Germany, just going global.
I agree with you, but to me the word “lies” comes a bit too strong, even if you put a question mark behind it.
I guess it just has become a habit to many marketers and affiliates nowadays, to show off ones results like that, doing the “i’m da biggest-MC Affiliate-(W)Rap.
Because there’s no biz like (affiliate) show biz …lol
You hit it on the head without sounding overly cynical or accusatory. I like that about your style! I look forward to many more years of the same from you, thanks.
For the PPC guys those checks don’t include actual profits, and, the profits are most likely much much less.
For Marcus Friend, the one who had the highest check is about 95% profit. He runs plentyoffish.com on a very lean architecture and no staff other than him and his wife.
Hmm,,, big payout big lies,,, is a phenomena that often use for marketting purpose,,, they offer “sweet promise” for great payout, just to attract customer/publisher. As we see now, a lot of CPC, Affiliate n Other Online Company should face a tight Competition to get Customer Choice
great post, although I feel like most people who ask these questions are still going to be so in awe of the check size that they won’t realize that you have to spend money to make money.:)
I agree with you (on you last opinion), sometime PPC arbitrage bad for people who new on affiliate marketing than promote with SEO.
Great post. I’d be interested in seeing their stats. Cuz like you said, PPC vs. Payout is definitely going to be much smaller…. either way, they’re still successful. Kudo’s to them, no matter how they do it.
They feel the need to brag about it in order to keep people paying attention to them (and what they are selling)…
I wonder what percentage of ppc campaigns could be spending 1.1M to make a million and still are only bringing in 1M? I guess not for that long if they are. Does anyone know how long on average it would take for a ppc to break even and start to turn a profit?
It looks true enough, but mind-boggling figures. I didn’t have the will to go any further than The plentyoffish guy with his almost $1million check. Makes my $100 adsense checks look quite pitiful.
I think some of those top affiliates are making the money that they claim they make. But for the rest of them I think they are all full of it!
A lot of affiliate marketers use the old “Amway” approach. Does anyone remember Amway?
Look busy, act busy, act rich…sell ‘em!
Well guys, I’ve got to get back to my $1000 a day blog…
Chris
Yeah its also a sort of intelligent linkbaiting, i printed the check of this guy as a motivation for me, as im standing at 100$ adsense earnings at the moment.
Great point. HUGE difference between profit and earnings. I would rather earn $1000 a month, and spend only $10 than what many people do.
I think many of the big name guys are legit, but I’m more interested in the non-internet marketing niche. It seems like its a circle of earning money by telling people how to earn money. I don’t agree with that unless you’ve done it elsewhere and it’s provable in that way.
In the NFL this is the sort of stuff that gets you a 15yrd penalty after a touchdown or fined. I mean is that really necessary to take a picture with your paycheck!? In any business salary is confidential and here are guys that love to flaunt it. Good for them, I’m proud of them but do you ever hear anyone talk about how many hours they spent over the last month to earn and like you said nowhere does it give the full story about what they spent to earn that.
Showboating! 15-yrd penalty in my book!
Hi
Any particular reason why you posted that picture with Shoe’s legendary check in this article, considering the subject?
Nope, nothing more than that it’s one of the more well known check photos.
I have no doubt that Jeremy has received a number of checks that large.
BTW, I’m not calling anyone a liar. It was reflective of the question posed to me.
Interesting post, and very interesting comments.
The reason these guys are showing off, is probably a little for ego, but also to build themselves as an authority. When their names are like a brand like Shoe, then you get incredible traffic and link love which makes you more money. Also I see people talking about buying clicks to sell clicks yeah some people make money that way, but all you have to do is build a great site, and get traffic naturally. It takes years, but it works. I don’t pay for hardly any clicks anymore, and I see well over 12,000 unique visitors per day.
“There’s a big difference between gross revenue and profits.”
I agree with you. It’s important to take earnings claims with a grain of salt unless you have the real inside story on how the money was made - what amount was invested/spent on advertising/marketing. Even then, it’s may be difficult to ascertain the actual profit made because off-line methods may have been used as well as organic search engine optimization.
Self-promotion is vital if someone truly wants to become an authority on their subject matter. Therefore, you really can’t blame these people for doing it. As someone once told me: “you have to toot your own horn sometimes because no one else is going to do it for you”.
Unfortunately, in the online marketing community, there are a lot of scam artists out there. So for anyone who is utterly impressed with earnings statements and considering doing business with them, remember to check the background of the person out thoroughly by speaking with people they know or have dealt with in the past and doing some digging around forums/blogs. Searching by using their names sometimes yields very interested results. Organic listings showing complaints by past clients or negative blog postings certainly don’t reflect well on the person. One example of a website that publicly calls people/companies out is ripoffreport.com. Regardless of how well-known someone is, it is always a good idea to do some background checking online.
Many of the affiliates that I talk to are like gamblers. They tell you how much the check was but they never tell you how much they lost (spent) the night before. It can be very profitable but
i really dont understand why someone has to spend money to earn money, often happend to me…i bought some ebooks and never made a dollar out of them.
Btw great article
Those were my thoughts exactly – ‘are they real?’
When I first started looking at how to make money online, I passed by all the A-listers (i.e., John Chow, Problogger, Cashquests, ShoeMoney, etc.).
And I ain’t gonna lie; I was impressed and (naively) thought I could do the same.
9 months later, I’m a lot wiser and a helluva lot more cynical.
It takes a lot of hard work – and I don’t think this is something a lot of the A-listers point out. I’m not necessarily saying it’s their responsibility, but if you’re quick to share your successes, I’d love to hear about the dark days too. Actually, I’d find the latter a lot more inspiring as it humanises the journey they made to get to where they are now.
Thanks for posting this. I always wondered about those big checks being shown off, but you make a good point about what their actual costs were versus what they were paid. Keep up the good work.
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