Highlights of today's Perry Marshall teleseminar featuring Amit Mehta, renowned creator of the highly successful PPC Classroom

First the bad news (but don't panic. There are some solid solutions and defensive strategies laid out later): "Affiliate marketing is officially dead on Google Adwords," says Amit Mehta of PPC Classrooom fame. "If you don't believe me now, you'll believe me six months from now."

His message is clear: If you survived the carnage up to now and don't adapt to the New World of PPC for Affiliate Marketers, don't bet on emerging unscathed by the end of Q2-2010.

"Google Adwords has been on a ban rampage. I have friends who were spending $50k a day, merchants with real products, who got banned. I got banned. If you are suspected of doing anything borderline shady in the past, even if you're not doing it anymore, you will get banned. 95% of affiliates in certain markets have been completely wiped out. People you normally saw all the time, their ads are gone."

Amit points out that this is a tremendous advantage for those who survived. "As long as you know how to play the game, this is the time to use Google Adwords. This is the time to learn the system because the profit to be made is enormous. Anyone promoting an established company and not just flogging affiliate promos, if you are in that position you stand to make enormous profit. This is a time of huge opportunity because it's like, wow - all the competition is getting wiped out!

"The Google bots can now determine what percentage of the links on your pages are external links. If you have more than one or two external links, you get flagged as an affiliate. They're looking for how many external links you have on your landing page and if they don't like what they see, they will shut your traffic down, as easily as flipping a switch. So that puts a lot of affiliates out of business."

Why is Google shutting down affiliates? "As far as Google is concerned, search affiliates don't add value. For Google it's like dupe content. For example, a dog training e-book: Google doesn't like the idea of someone going through five different search results that are promoting exactly the same e-book. They see that as basically duplicate content. They call it affiliate spam. Unless you are adding a lot of value, and it's unclear exactly how you're supposed to do that, they basically don't want search affiliates. They want to get rid of them."

What's the solution?

Basically, get rid of the affiliate links on your landing pages and turn them into strictly opt-in pages. Learn how to create high-converting opt-in pages. Develop solid relationships with your prospects and market your affiliate links via email to your lists.

"It's not true that Google doesn't like opt-in pages," Amit points out. "Google likes lead generation." Learn how to create killer opt-in pages, learn how to calculate your visitor value so that you know what each opt-in is worth as a potential lifetime customer. This can be a really good way to get around some of this affiliate stuff because once a person opts in, they become your customer for life. Your affiliate marketing then takes place through email. You own the process, not Google. "So that's what I would recommend: If you are promoting an information product, use opt-in page and then you can promote your affiliate offer on the back end."

Perry Marshall says he's also experimenting with other ad networks. He used Ad Brite as an example. For offers with a certain amount of mass appeal, you can get pretty good traffic. Again, you have to take the time to learn the ropes so that you know what you're doing, but the effort can pay off.

"I was able to get acceptable conversions, but only after I eliminated some of the top sites that were giving me the most traffic with the worst conversions at the highest cost." Marshall stressed that it depends a lot on what your offer is and what kind of web sites are running those ad networks. The media buy world is skewed more to consumer offers and the stuff that Google tends to not like, such as weight loss and the other stuff that attracts massive numbers of affiliates.

Both Perry and Amit raved about the impact of using banner ads on the content networks.

Banner Ads

"Google has had banner ads for awhile but not a lot of advertisers have really taken advantage of that," said Amit. "So I've been dabbling in banner ads recently and it's absolutely incredible. It's a freaking gold mine. With text ads you get like point-two percent click-throughs. With banner ads it's 2 and 3% clickthrough rate, 10 times the CTR. So if you get exactly the same number of impressions as your text ads, you will get 10 times the traffic.

"Even if you take the text in your text ad, put it on a banner and add a simple graphic, the CTR increase is huge! You can start really simple, and here's the thing: In Google's content network, they look at your landing page quality, and they look at your CTR on the placement. That determines your ad rank on the content network. When Google sees that your CTR is 10 times higher, guess what's going to happen? Your CPC will plummet. So you'll end up with 10 times the traffic at about a fifth of the cost!"

Banner Ad Tips

1. "You need to know your metrics," Amit cautions. "Because you're going to get a lot more tire kickers, a lot more lookie-loos, a lot more serious people clicking on it. Know your metrics, you need to split-test, you need to have a high-converting landing page, and you need to continuously test. Otherwise you will get burned because you will get so much traffic." You also need to keep a close watch on your placement reports, eliminate stuff that's getting lots of clicks and making no sales or reducing your CTRs.

2. Google accepts banner ads in 8 different sizes, but there are two sizes that get about 3/4 of the traffic: 250 x 300 and 90 x 728. The next best is 336 x 228. "I don't bother with the other sizes," says Perry. "They don't get enough CTRs and there are not as many places to put them."

3. If you can do all your testing with one or two sizes, it simplifies everything.

4. "Another big tip on banners is don't make them flashy," says Amit. "You don't want it to look like so many other banners with all these crazy colors and graphics and pictures. You don't want animated gifs and all that junk. If a banner looks like it's part of the site and doesn't look really flashy and obnoxious, it tends to do really well. The simple ones killed the flashy ones in every test."

5. If you can afford it, job the banner work out to people who know what they are doing. They will usually come back with things you would never have thought of, plus they know which typefaces work the best, etc.

6. "Take a look at your placements and see what your competitors are running for banner ads," Amit advises. "Take a look at those to get some ideas, and start testing different elements."

7. YouTube is also a good place to put banner ads, particularly the 250 x 300 size. You can identify topics in YouTube that are related to what you sell. Find videos that have a lot of activity and put ads there that resonate with that market. Not only that, but you can get ideas on what kind of images to put in the banners from watching the videos. Although YouTube traffic does not convert as well as other (Google content network) sites, "there's a ton of traffic, unbelievable quantities of traffic on YouTube," says Perry. "Especially if you have a consumer level offer that has mass appeal to a significant portion of the population. Like 2, 3, 5% of the population could be candidates for your offer, then there's big bucks to be made with banners on YouTube."

Produce Your Own Product

Another way to prepare for the ongoing Google rampage against affiliates is to make your own products, Amit suggests. "It's a gold mine, because markets where there used to be 50 advertisers now only have 5, about 10% of what there were six months ago. Or you have to get really good at hiding the fact that you are an affiliate, but guess what? Google is really smart. They will eventually figure it out." (Moving your offers off your landing pages and using email marketing via opt-in pages is the safest play to keep Google from slapping you right out of the marketplace.)

"If you're an affiliate and you're promoting Clickbank products, keep doing that," says Amit. "But quietly, do some market research in Clickbank, find out which companies are doing well, see what offers are doing well and create your own. And you can absolutely clean up" because Google is doing a pretty good job of thinning the herd and eliminating competition. "Just go through the trouble of creating your own product. Create a mailing list and promote your own and other affiliate products through emails. This will give you many times the customer value you had as an affiliate and you'll make ten times the profit."

Perry drew a neat analogy of the real value of getting prospects through PPC advertising. You get them on your list and develop a relationship with them over time. They're not your immediate customers, but they will become your customers somewhere down the road. So it's more like farming now, not hunting. You don't blast away and grab their money; you cultivate them and grow a relationship until eventually you begin to reap sales.

One final tip from Perry

On the key question: Is there still a way to make a killer income in affiliate marketing? Perry reiterated an approach I've seen in many of his recent newsletters. Go and find a company that has no idea how to market on the Internet. Say, for example, a rubber-gasket maker. Broker a deal with them to pay you $10 for every sales lead you send to their web site. So what you've just done is created your own CPA network (cost per acquisition) with no competition. All you need is three or four of those deals and you've replaced your day job. And Google is never going to shut down a rubber-gasket manufacturer. So there is a sweet spot where Google wants as much as they can get.

"The point being don't try to take the path of least resistance and just do what everybody's doing. Figure out what you do in the world that is unique and where you can contribute, and build it out. Own it, be the king of the mountain and Google will love you if you do that. I always encourage people to be aware of where you have been in your life, what jobs have you had, what magazines have you subscribed to, what do you know about that most other people don't. Because that can be the cornerstone of a unique online business."

Seems to me it can also be a great way to fund your affiliate marketing efforts, and provide a strong fall-back position if you do end up being crushed by the cruel giant that Google has become (largely through the efforts of affiliate marketers, as Perry Marshall was quick to point out).