Goal for this month: make money with affiliate marketing

One of the goals I’ve set for this month is to get started with affiliate marketing again and make some small profits (like 250EUR before the end of the month). If successful I’ll try to scale it up and develop it onto a new income stream that supplements my current income. My online business generates a relatively nice chunk of income but it’s not really diversified, the growth is stagnating and I’m kinda worried about the sustainability. Since the holiday season is over income collapsed by 30-40% and the freefall of the dollar isn’t doing me much good either.

To feel a bit more secure I’m going to try to make money with European affiliate networks so I don’t have to worry about the currency exchange. After some market research I’ve decided to start with Flemish affiliate campaigns and later I’m also going to try to target the Netherlands. My decision to focus on these target groups has some advantages but also some disadvantages:

+ Less competition. In the US you have competition from affiliate marketers from all around the world but that’s not the case in my country. That should make my job a bit easier and I think advertising costs will also be lower here because there aren’t as many advertisers.
+ No language barrier. It’s not always easy to advertise in another language if you aren’t a native speaker.
+ It pays out in euro. More diversification and less reason to worry about the dollar going south.

- Affiliate networks and programs aren’t as developed as in the US or UK. At first sight there don’t seem to be a lot of good programs.
- Smaller population: 6 million in Flanders and about 16 million in the Netherlands vs 300 million in the US.

My experiences with affiliate networks are pretty mixed. About 1.5-2 years ago I had a very successful affiliate campaign running that made shitloads of cash with free traffic but after a couple of months it peaked and after a while I had to pull the plug on it because the returns were getting too small for all the hours I had to put into it. All my other attempts to make cash with affiliate programs made use of AdWords but most of these campaigns didn’t give a positive ROI.

Hopefully I’ll do better this time. Right now I’m still in the “analysis, learning and reading” stage but my first new affiliate campaign should get off the ground soon.

Another busy week

This week is going to be really busy as I’ll get flooded by tons of news from CeBIT - this is a European tech show in Hannover, Germany. Most major computer and tech firms will present all their latest products at CeBIT, just like at CES in Las Vegas two months ago.

Hannover isn’t really close to where I live so I can’t bring my own coverage from the show but I hope I’ll get my driver license soon so I can go check it out next year. Posting volume on DV Hardware will go up this week as I’ll try to post as much as possible about all new products and if I find some free time I’m also going to finish a couple of reviews that should have already been published a couple of weeks ago..

Within two weeks there’s also an interesting conference for SMBs in Brussels called Ondernemen 2008. Normally I wouln’t be interested in this but I received an e-mail from Google last week that they’re going to do some AdWords workshops at this conference.

It’s called Google University and there’s a beginner and advanced class. The beginner workshop focuses on the latest trends in online marketing, how to setup an AdWords campaign and how to optimize your campaign. The advanced workshop will offer tips on how to maximize your ROI, best practices to improve your reach on the Google network and tracking and analysis. People who attend the workshop will receive a AdWords cheque of 50EUR and a toolkit with AdWords tips.

Initially I was planning to go as it may help me to get some affiliate campaigns started on AdWords but then I discovered that Google has published the presentations online. You can check out the beginner and advanced presentations at Google’s website.

Dollar drops to new record low

As oil jumped over $100 per barrel and gold reached new record heights of over $960 the U.S. dollar reached a new record low yesterday. For the first time since the euro was found in 1999 the U.S. dollar crushed the psychological barrier of $1.5 per EUR.

Analysts believe the Fed will further cut the intrest rates to fend off a recession in the U.S. and that’s causing the dollar to drop.

“The euro is trading above 1.50 against the dollar for the first time since the eurozone came into existence in January 1999,” said Global Insight economist Howard Archer.

“This is primarily a consequence of the dollar being undermined by further weak US data heightening concerns over the US economy and reinforcing expectations of additional interest rate cuts by the Federal Reserve.”

Analysts said the euro was boosted by the prospect of favourable interest rate differentials between the eurozone and the United States.

Speculators generally prefer to invest or hold currencies in countries where interest rates are rising or expected to rise in the hope they can increase their potential returns.

Soaring oil prices have diverted petro-dollar revenues into the strengthening European single currency, according to ABN Amro analyst Melinda Smith.

“In addition to the fresh widening in interest rate differentials, one of the key drivers of this move appears to be the surge of oil prices as petro-dollars are channelled into the euro,” Smith said.

When you take a look at the purchasing power the dollar is highly undervalued. According to an article I read in the newspaper today a euro is fundamentally worth only $1.1 to $1.2 instead of the $1.5 it’s currently trading at. I hope the dollar will rise again but it doesn’t really seem likely in this market.

Google’s paid clicks are dropping

Google’s stock took another big hit today on fears that it won’t be able to meet Wall Street’s expectations. Market research firm comScore published a report today that indicated that the amount of paid clicks on Google’s search engine dropped 7% month-over-month in January and remained relatively flat with the same period last year.

In its fourth-quarter financial results, Google indicated some concerns in this area, though at the time the company blamed the slowdown in paid-clicks to technical changes designed to reduce the number of accidental clicks by users.

Analyst Lee Westerfeld of BMO Capital Markets slashed his price target on Google’s shares to $590 from $690 in response to the comScore numbers, along with maintaining a market perform rating.

“The issue relates to the degree of multiple-compression risk under revenue- decelerating circumstances,” Westerfeld wrote in a report.

Robert Peck of Bear Stearns noted that the click-through rate was the lowest since comScore started reporting this type of data.

“While this is one data point for domestic google.com only and from one source, which may or may not be accurate, it is a concerning data point and somewhat reflects what we have heard from [search engine marketers] — that they were not seeing a high volume of clicks from consumers possibly due to the economic slowdown,” wrote Peck, who rates Google as outperform with a $650 price target.

Some analysts weren’t quite so worried. Marianne Wolk of Susquehanna Financial Group noted that Google is taking steps to improve the quality of its links and click-throughs, which may result in some lower revenue in the short term but improve the business in the long term.

A drop from December to January might be normal due to the holiday season but the fact that there was no growth compared to a year ago is pretty disappointing.

There could be several reasons for this:
- comScore’s data may be wrong.
- Google is trying to improve click quality to boost advertiser’s conversions which may eventually lead to higher bids per click
- A change in consumer’s behaviour due to the economic slowdown in the U.S.
- Companies may be reducing ad spending.
- Web users may be developing a text link blindness, just like with banner ads a couple of years ago.

Or it could be a combination of all five reasons. GOOG is currently trading around $457 which is one of its lowest levels since April 2007.