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Adsense Arbitrage: The Core Business Model is Flawed

dumb flow chart

Adsense arbitrage is one of those dumb business ideas that won’t seem to go away. Kind of like tag cloud pages. And the “million dollar [insert noun here]” sites.

If you’ve been out of the loop for a while, Adsense arbitrage involves buying cheap clicks and sending them to a page full of Adsense ads, hoping to make more per click than you paid per click.

That covers the basics, and that’s all we need to cover today. That’s because I want to talk about that basic, core business model and why it’s flawed.

(Talking smack on Adsense arbitrage is nothing new, but this idea just popped into my head one day, so I just had to write it out.)

Think about this concept:

Even when you get past the scammy second-tier PPC sites and the crappy MFA pages… The business logic is crap!

See, advertisers don’t spend much per click on the content network; the search results are where it’s at. But unless you own Google.com, you’re stuck at the content network in the land of low-priced clicks…

It’s an uphill battle from the start.

But let’s say you get super lucky and do days of niche research and find a keyword that will pay you $5 per click on the content network.

Well, as soon as you send some non-converting clicks to that advertiser, they’ll notice the problem, and immediately decrease their content network bids. Then you’re done. Chances are your net loss is pretty bad, because you would have spent some money on all the testing.

And that is the outcome when you found your own niche. If you’re buying lists of hot niches, by the time you see the list, the niches are no longer profitable.

Try it again? Maybe there’s another good niche?

Quit while you’re ahead buddy!

Four Reasons It Is Retarded To Start a Make Money Online Blog

The other day I read a great post over at DoshDosh about why it was stupid to start a “make money online” blog. Actually, the blog post was titled Four Reasons Why the Entertainment Niche is Great for Making Money, but the idea is the same.

It’s a great post and doing a blog outside of internet marketing is great (I’ll admit, it’s even better than doing a blog making fun of internet marketing!) ;)

The thing is, there are already too many “make money online” blogs. I can only handle reading a few, like DoshDosh, John Chow, BlogStorm, Zac Johnson, and CDF Networks. And that’s pushing it. Add in all the blogs from people that have no experience making money online and it’s just pathetic.

So if your “make money online” blog sucks, why not do us all a favor and delete it?

Free Hosting Websites - If You’re Not Established Yet, You Missed The Boat

One of the more lucrative markets of the past year was the free web hosting market. These webmasters pulled in tons of customers with virtually no advertising, then made thousands of dollars per month… then sold the sites for a healthy profit.

Thinking about jumping in yourself? It’s easy, right?

Yes, it’s a very simple formula. But the word is out and the gold has been mined.

This illustrates a very important lesson: Be at the right place at the right time! (i.e. before everyone else)

Here’s a summary of how everyone was making money with these sites:

  • Get a domain name and server. ($100/month)
  • Order a specialty control panel such as Layered Panel or Modena Panel, which does all the hard work for you. (another $100)
  • List your site on free hosting directories such as Free Webhosts.
  • Put an “upgrade” link on your site that directs users to HostGator’s affiliate program, netting you $100 for each referral.
  • Collect a lofty commission check. ($4000/month)
  • Sell the site while it’s still hot. ($8000)
  • Throw a party, because you just made over $10,000 in one month!

Pretty simple, huh?

But here’s another very important lesson: If multiple money-making blogs start talking about how to make money with free hosting sites, chances are the market is getting saturated.

And what did you expect with it being so easy?

All you can do now is look at all the successful sales and wish that you were one of them.

But if you’re sad, make yourself feel better by laughing at the people even dumber than you! (They are the ones that still plan to enter this saturated market thinking they can make easy money.)

Why exactly is it too late?

Because HostGator said so. They used to allow these free hosting sites into their affiliate program… until they got fraudulent sign-ups.

Now they have adjusted the commission rates:

If you are referring clients to HostGator from a free hosting service that you run, you are not eligible for the standard commission rate listed at http://www.hostgator.com/affiliates.html. Instead, you must contact our affiliate department to work out a special commission rate.

In other words, the big commissions are gone!

And everyone is screwed now! (And it’s not like other hosting affiliate programs will welcome these sites with open arms…)

It Seemed Like a Decent PayPerPost Alternative…

smorty logo

There was a little buzz around Smorty, a PayPerPost-type service, so I figured I’d sign-up and test it out. (Plus, I had been rejected by PayPerPost anyway, since I didn’t display monthly archive links…)

Then I checked the rules and they have “over 25 criteria” that they look for before accepting your blog. Pretty strict, but I thought this blog (live for 2 years, multiple posts per week, etc) was pretty good.

Well… they did not!

Since I have my blog at http://internetmarketingsucks.com/blog/ instead of at the root URL http://internetmarketingsucks.com/, it was declined.

I guess it would have been fine at http://mylameblog.blogspot.com (according to some other bloggers that use Smorty,) but my URL choice wasn’t good enough. The fact that my blog is just one of the many beautiful sections of my website means that Smorty is just missing out.

Regardless, what a lame policy. I encourage everyone to boycott Smorty because of it.

Why the boycott? Because having a lame policy is a great reason to boycott them!

Huge $4000 Blog Anniversary Prize Drawing (With an Entire $25 in Cash!)

Today I’m going to spread the word about another huge contest (http://www.davidairey.com/graphic-designer-prize-giveaway) that’s going on in the blogosphere, but first, think about this…

How do you value a specific service? I’m not talking about something with a retail price, but more like a one-time deal. And to complicate things even more, the ’something’ in question will actually be given out for free!

Do you make something up? Base it off an hourly rate? Or just say $47 because that is the typical value of a free ebook?

It’s like the prices at overstock/warehouse style department stores. Their tags might be marked at $99.99 retail price, but you get 75% off, for a total of about $25. Great deal, right?

But what if most normal department stores are selling it for $29.99 to begin with… so that $99.99 “retail price” was total BS. (The MSRP seems to always get lost in the whole process…)

Anyway, I got sidetracked thinking about that shady sales tactic from department stores. (Maybe internet marketers took a lesson from them…)

What we’re really here to discuss is how to audit a $4000 prize package to see if it is indeed worth $4000. And we’re doing that because David Airey’s blog is one year old next month, and he’s having a giveaway to celebrate… a $4000 giveaway!

To get a chance at the grand prize, all I have to do is link to his blog (see above,) subscribe to his RSS feed for a secret word, and link to some sponsors (see below.) If you want in, you need to do the same.

Here are some of the prizes we need to consider:

Wow, that’s too much to audit, and it’s not even the complete prize list!

But it’s enough to convince me, a humble blogger, to sell out! Hell, I’d write about it if the $25 cash was the only prize. :)

(The deadline for entries is Wednesday, September 26th 2007, and the winners will be announced on Monday, October 1st 2007.)

(P.S. If you enter, be sure to email David and let him know about your post and the secret word!)

How To Pull In Quick Cash With a Myspace Resource Site

myspace friends button

What’s happening to me? I just gave you a totally free Myspace Resource Site script, and now I’m giving out my money-making secrets?

Nope, I’m not doing it out of the goodness of my heart. (Give me a break, I’m still an internet marketer!) I’m doing it for a chance at a $100 grand prize in BlueJar.com’s group writing contest!

To win the contest, I have to write a “how-to” blog post. So I’m writing out a step-by-step process about how to set-up a Myspace resource site and pull in loads of cash! (Your results may vary.)

OK, let’s get down and dirty and stake our claim in this cutthroat world of myspace resource sites:

1. Check your conscience at the door.

Read this, which talks about how you can’t use Myspace for commercial purposes and whatnot. And this article, about the whole business of myspace resource sites.

2. Download the script.

This is pretty simple: just read this blog via RSS and you’ll see the download link at the bottom of each post. (More info here.)

3. Get a domain name and hosting.

This is the only step that will really cost anything, but it’s pretty basic. If you know what you’re doing, just pick your favorite host and get setup.

If you don’t have any hosting or know what to do, you can use my affiliate link and sign-up at Dreamhost since they offer tons of space and bandwidth, plus a free domain name, all for $7.95 per month. (Or HostGator, because they’re supposed to be pretty good, too.)

Domain name tip: I don’t recommend using the word “myspace” in your domain name because that would directly infringe on their trademark, and they might just shut you down. But you can use words like profile and layouts without hassle.

4. Edit and upload the script.

This is pretty simple too, just read the Install.txt file that came with the script.

Remember, the more you edit the images and the CSS file, the better. A lot of other sites will be based on a similar script, so you want your website to at least look different than them.

(It should end up something like this.)

5. Create your own myspace profile.

Now that your site is up, it’s time to get ready for marketing…

Go to Myspace and sign-up for your own profile, which will relate to your new website.

Once you signup and have to pick a name, choose something like “myspace.com/yourdomainname” so people can relate your profile to your actual website.

Add a picture, too. If you aren’t a cute teenage girl, you could just use your website’s logo. Or a funny picture of Borat. As long as it attracts attention, it’s good.

Now make your profile pretty. Real pretty. Even if you use a layout and graphics from someone else’s site, you want to convince anyone that sees your profile that you are a myspace layout expert. That will lead them to visit your layout site.

To be sure they do, put links to your site all over your profile. At least have a banner in the top corner and a text link in the About Me section, but the more the merrier.

Remember: The target market here is teenagers. You’ll be dealing with teenagers, so get used to it by scanning a lot of profiles on Myspace to get a feel for how they interact. You need to fit in, and you don’t accomplish that by acting professionally - you act like a kid again!

6. Make friends

If your profile is set, it’s time to show it off.

Which means we’re going to do some real work: getting friends, leaving comments, and socializing.

No bots allowed. We’re doing this the old-fashioned way (so you don’t get banned for spamming…)

The easiest way to start is to look for Myspace groups that are focused on HTML, layouts, graphic design, etc. Join them and add your fellow members as friends.

*Just don’t spam the groups. Everyone will HATE you!*

Next, find very popular myspace layout profiles, and add them as friends. Add all their friends, too, for good measure.

Note: Don’t add that many friends per day. Start out slowly so that Myspace doesn’t ban you.

7. Beg

If you have been nice so far, you might have a few friends. And you’ll want to leverage your friends to help yourself.

For example, see if you can do a “w4w” or “s4s” with someone. It would be like sending bulletins for each other or doing a link exchange between your profiles.

Ideally you can get someone popular to help you, but it won’t be that simple. You could offer to return the favor once you have a more popular profile, or to link to them from your real website. Anything to convince them to spread the word about you.

8. Link Exchanges

Since you can’t spend all day on Myspace (well you probably could, but try not to…) do some link exchanges with other webmasters.

By now you should have at least a few people visiting the site. So head to the DP link exchange forums and the MSP link exchange forums.

Do lots and lots of link exchanges. (Don’t worry about doing too many, just look at the amount of links plastered on both sides of this site.)

Not everyone will exchange links with a new site that has very little traffic and no PR, but some people will, so just keep at it.

Tip for your linking code: Use good anchor text, and use the Title attribute of the a tag.

For example: <a href=”http://www.mysite.com” title=”myspace layouts”>Myspace Layouts</a>

That’s what you would request someone else place on their site when linking to you.

Along with that, Myspace Toplists (like this, this, and this) are great places to submit your site. You have to place a reciprocal link though, so it’s basically a link exchange.

9. Repeat

Steps 6, 7, and 8 should be repeated daily.

Check your Myspace account at least once a day and add new friends, comment on current friends, and join in the discussion boards on group pages.

Then back to the link exchange forums looking for more webmasters.

10. Expand your advertising

As more people visit your site, your choice of advertising gets more important.

Adsense is built into this script, but there are other options you can try. Sticking with Adsense is OK, but you’ll be getting about 1 cent per click…

CPA affiliate offers are a good addition. Ones that might work well include those “free iPhone” offers. Anything free is good, especially the forms that only require a visitor to submit their email or zip for you to get paid.

Closing a sale to a myspace resource site visitor isn’t easy, so CPM and CPC ads are good choices. Affiliate links… not so much.

Note: Ad/affiliate networks frown on advertising on myspace, so make sure you only place ads on your own site.

11. Add more content.

Got any traffic and revenue yet?

Now that the basics are behind us, it’s time to set your site apart. You do that by getting cool stuff and posting it on your site consistently.

Sources for new stuff: User submissions, MSP Freebies forum, or steal them like everyone else. (Note: I’m not advocating theft, but chances are 10 people have stolen a given layout before you, and that’s how you found it!)

You could buy stuff too if your budget allows. Again, the Myspace Pros forum is the place to be.

Or you could leave the site “as is.” That’s fine too. You’ll just sacrifice some revenue for more free time.

12. Personal marketing: Seek out lame profiles.

This could be seen as very helpful or very spammy, depending on how you do it, but…

You could browse Myspace looking for people who still have the basic white/orange layout, and then let them know how easy it is to get a cool layout if they visit your site.

Ideally you could find someone with lots of friends, because getting your link on their page would pay off nicely.

Just don’t send too many random messages.

13. Repeat.

Keep working on advertising and marketing!

Improve your site daily for maximum success!

14. Relax.

Now that you have some traffic coming in, the site runs itself. That’s the beauty of it, and why it’s worth the hours of work in the beginning.

More traffic means more people will end up putting your content (along with your link) on their profile pages. And then people will see that, visit your site, and add your content to their site. And that will continue on autopilot. :)

15. Sell.

Now it’s time to face reality.

You never know when the whole Myspace fad is going to collapse. Maybe Myspace will crack down on all the resource sites that are profiting off their name. Maybe everyone will switch to a new site.

Either way, you don’t want to be around when it happens. So make your site popular, maybe even build more of them, but eventually sell them off.

16. Build Facebook apps.

Hey, unless your sites get to the level of WhateverLife, you won’t be able to retire. So get to work on some Facebook apps before that market is too saturated!

Good luck and have fun! :)

Today’s Free Gift: Valid XHTML Myspace Resource Site Script

myspace friends button

Friday seems like a great day for a free gift, doesn’t it?

On that note, what I have for you to download free of charge is a Myspace Resource Site script. It’s a complete myspace resource site in a .zip folder. You just upload it and, like magic, you have your own full-featured site with myspace layouts, generators, codes, glitter graphics, profile tweaks, and whatever else you see on all the myspace sites that look exactly the same…

This script is a lot like the crappy ones floating around on freebie sites, but with a key difference: I re-coded the whole thing so instead of it having a crappy table-based layout, it now has a sweet div-based layout styled with CSS, and it’s valid XHTML 1.0 Strict.

I don’t know about you, but I think that’s pretty cool! (Disclaimer: Due to some of the features and PHP code used, not every single page will be valid, but most of it is.)

Want the download link?

I thought about posting the download link here, but after all this talk about RSS subscribers, I think I’m going to make the download link a special bonus for feed subscribers!

So if you’re not a subscriber, now is the time to click that orange square in the top right corner and subscribe! It’s free, simple, and painless.

If you’re already a subscriber, you’ll see the download link at the bottom of this post in your feed reader!

Update: This script is no longer available, but a slightly better one can be found by clicking here. (It’s still free.)

Test it out and let me know what you think in the comments! :D

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