Journey Into Internet Marketing – Part 4 Tutorial

Clickbank & Affiliate Networks

Overview


This is the fourth part of the tutorial series “Journey Into Internet Marketing”. If you have not done so, it is recommended you read over Part 3 – Introduction To Affiliate Marketing first.

This tutorial will be discussing one of the largest affiliate networks – Clickbank, and how it can be used to immediately start selling merchants products online.

1. What Is Clickbank?

At the time of writing, ClickBank is the largest affiliate network for digital products such as ebooks, mp3s and videos. It operates as a marketplace where merchants, affiliates and consumers congregate and interact with each other.

ClickBank currently has over 12,000 merchants and at least 100,000 affiliates that are members of the network. It is such a busy network that an average twenty transactions are made every minute, and over 25,000 transactions are made on a day to day basis.

In the Affiliate Marketing tutorial, I make the point that affiliate networks take on the responsibility of recruiting affiliates, tracking sales and arranging payments. ClickBank is no different.

A merchant who wants to sell his or her digital product with ClickBank will have to register an account. Setting up an account is free for merchants. The merchant will be required to provide personal information as well as banking details. The information provided by the merchant will be used by ClickBank to send payments.

When the merchant is ready to start selling products through ClickBank, they will have to activate their account with a fee of $49.95. The merchant is then required to provide information relating to the price of the product and the commission rate they will pay affiliates who promote their products. Finally the merchant will have to setup a sales page with a link to the ClickBank payment processor.

When a customer buys a product from the merchant’s sales page, Clickbank will process the order, get the payment approved, handle customer billing, customer enquiries, as well as customer refunds. Most of these activities are completely transparent to the merchant. For the services that they provide, ClickBank charges a fee of $1 + 7.5% from each item that is sold across its marketplace.

If the customer was sent to the merchant’s sales page from an affiliate’s website, ClickBank will also be responsible for handling the payment of commission to the affiliate.

How does ClickBank work for affiliates?

Like merchants, affiliates are required to sign up for free accounts. After registration, ClickBank provides each affiliate with an ID that is used to process commissions for the sales they generate as affiliates. An affiliate can then go to the marketplace and choose as many products to promote as he or she wants.

The next step is to create a landing page for that product. The function of the landing page is to get the people that visit the landing page to click on the link to the merchant’s website. The link to the merchant’s website will be embedded with the affiliate’s ID and this will enable ClickBank to identify which affiliate is responsible for generating the sale.

As soon as a visitor clicks on the link on the affiliate’s landing page, they’re taken to the merchant’s website and a cookie is stored on the visitor’s computer. The cookie stored includes the affiliate’s ID, so that anytime the visitor buys the product from the merchant’s page the affiliate will be credited with the sale (as long as the cookie hasn’t expired), and will receive a commission.

The maximum commission that can be earned through ClickBank is 75% of the sale price. That is quite a generous payout, and many of the top merchants actually offer a 75% commission for their products. High commissions are very attractive to affiliates because they want to earn as much money as possible for their marketing efforts.

The sale price of a product and its conversion rate also influence how lucrative it will be to an affiliate. If two products have the same conversion rate, and one sells at $200 with a commission rate of 30%, it will be more profitable than another product that has a commission rate of 75% but sells for only $40. On the other hand if two items sell at the same price and pay out the same commission rate, the one with a higher conversion rate will be more profitable than one with a lower conversion rate. It is therefore important to bear all three factors in mind when choosing a product to promote.

Consumers of digital products can also use the ClickBank marketplace. The difference is that unlike for affiliates and merchants, consumers are not required to register accounts before they can buy products through ClickBank. Consumers can browse through the marketplace and look for products to buy, or they can search for specific products using the search function. Users can also go directly to a merchant’s sales page, or go via the landing page of an affiliate.

2. Setting Up An Account

Joining ClickBank as an affiliate is free. At the top of ClickBank’s website is a link to the Signup page. When you click on the signup link you will be taken to a form. The signup link is enclosed by the green rectangle at the top of the screenshot below.

You will then need to complete the signup form below.

There are also a number of policies that you are expected to read and accept before clicking the submit button.

After you enter all the required information and submit the form, you will receive an email with a confirmation code. This code is required to complete the signup process.

After signup, you can login to your ClickBank account by clicking the Login link at the top of ClickBank’s website. The Login link is enclosed by the green rectangle at the top of the screenshot below.

This is what the Login screen looks like…

After logging in, you will then be taken to your account page where you can access information such as the products you are promoting, your current and previous earnings etc. Information such as postal address and phone number can be updated and saved.

3. Finding A Product To Promote

The easiest way to find a product to promote is to go to the ClickBank marketplace at https://www.clickbank.com/marketplace.htm You will be faced with a screen like this:

You can then search for products in specific categories and subcategories. The sub categories loosely correspond to niches, so if you have already done your niche research you can just select the sub category that matches the niche you had earlier decided to focus on.

The major categories that you can select are as follows:

Money & Employment
Business to Business
Health & Fitness
Home & Family
Computing & Internet
Money & Employment
Marketing & Ads
Fun & Entertainment
Sports & Recreation
Society & Culture.

Each category has several sub categories to choose from.

It is also possible to look for specific products by entering keywords into the keyword field and submitting the query. The query will then return all products that match the keyword you submitted.

The products that are offered are usually ebooks, courses, video sets, audio sets, software and anything that can be delivered digitally to the buyer. ClickBank does not support physical products. At the end of this tutorial, we will take a brief look at alternative affiliate networks that do support physical products.

You can then narrow down the search by entering the keywords you want to search for. The product type drop-down allows you to select products that have standard billing, or those that have a recurring billing.

It is also possible to specify if you want products in any of the following languages: English, French, Spanish, and German. The criteria by which the results can be sorted are:

Popularity
high gravity
low gravity
$ earned/sale
% earned/sale
future $
total $/sale
% referred.

The criteria above are actually useful statistics that can help an affiliate determine the potential profitability of a product. Let’s look at what they mean in a little more detail.

Popularity: This statistic indicates the volume of sales made over a recent timeframe.

$ earned /sale: This statistic refers to the amount of commission that the merchant pays affiliates for each product sale, and takes into account: refunds, charge backs, and sales tax. If you know how much you are going to spend on promoting a product, then you could set a minimum threshold $ earned/sale to make sure that each sale generates a profit for you. Obviously a higher $ earned/sale is preferable, but you have to bear in mind the conversion rate of the sales page. A product that pays out a commission of $100 but converts at 1% will earn you less money than another product that pays $50 but converts at 3%.

% earned/sale: This statistic refers to the percentage of the sale price that the merchant pays affiliates as commission for each product sale. Commissions generally range between 40% and 75%. With 75% being the maximum commission payable. This statistic should never be used in isolation. You need to know the sale price of the product and if possible that conversion rate as well. All these numbers in concert will give you a more accurate idea of how profitable a product is likely to be.

Future $: This is the average amount of money earned by an affiliate when they refer a buying visitor to a merchant’s website. This statistic is only relevant when there will be recurring bills such as membership subscriptions. It takes into account the average period that people keep their membership as well as the value of the monthly subscription. When a product involves rebilling, it is important that you considered the future $ in addition to the $ earned/sale. Even better, you can just use the next statistic instead.

Total $/sale: This is an estimate of the total commission that can be earned by an affiliate from the sale of a product. This includes the initial purchase plus expected future subscription billings. For products with rebilling, this statistic will give you a more accurate reflection of potential earnings.

% referred: This statistic simply tells us what percentage of a merchant’s sales come from affiliates. A high percentage suggests that the merchant is happy to let affiliates do the marketing of the product. It also suggests that the merchant is well established, and has been able to recruit a sizeable army of affiliates who tend to keep on promoting the product. A low percentage means that the merchant sells a good chunk of the product themselves. This means the merchant is actively marketing the product and very likely competing with the affiliates. This is not ideal. A low % referred could also arise when a product is fairly new, and doesn’t have a lot of affiliates promoting it.

gravity: The gravity statistic is based on the number of affiliates that have sold a product recently. Unlike the other numbers, it is not a “real” number. A high gravity suggests that the product has been popular recently. If the gravity is high it means there are a lot of affiliates promoting the product, and you can expect competition to be stiff. A low gravity, on the other hand, means the product is not very popular with affiliates, and there will not be a lot of competition from other affiliates.

If you want to promote a product that has a track record of converting well, then you need to select products with high gravity. On the other hand, if you want to be one of the first affiliates to promote a product that could turn out to be a hidden gem, then look for products with a low gravity value.

4. Hoplinking & Tracking

Hoplinking is a coded URL that is provided by ClickBank to affiliates for every single product that they choose to promote. It usually takes the form of http://abc.zyx.hop.clickbank.net where ABC is the affiliate ID, and XYZ is the product code.

From the above, we can see that a hoplink provides two vital pieces of information;

The Clickbank ID of the affiliate

Clickbank code for the product being promoted

Hoplinks allow ClickBank to track what affiliate is responsible for generating a referral to a merchant’s website. It also lets ClickBank know which website to redirect the visitor to.

The easiest way to create a hoplink is to login to your ClickBank account, and then go to the Marketplace to find a product you would like to promote. Under the product listing you will see a ‘Create Hoplink’ link. Click on the link and a Hoplink that is unique to you will be created. You can then use the hoplink on your landing page to direct visitors to the merchant’s sales page. The screenshot below shows the ‘Create Hoplink’ link enclosed by a blue rectangle in the 1st Marketplace listing.

Let’s take a more detailed look at how hoplinking actually works;

When a visitor to an affiliate’s website clicks a hoplink ClickBank redirects the visitor to the merchant’s sales page. As this happens, ClickBank’s computers will log the affiliate ID that is embedded within the hoplink and then create a cookie with the affiliate’s affiliate ID. The affiliate ID is then stored on the visitor’s personal computer for 60 days. If at anytime during the following 60 days that visitor buys the product from the merchant’s site, the affiliate will be credited with the sale and will receive a commission from the merchant (via ClickBank) for his or her efforts.

After 60 days the cookie will expire, and the affiliate will no longer be credited for the purchase made by that visitor, unless the visitor happens to return to the affiliate’s website and clicks on the hoplink again. In which case, a new cookie will be stored on the visitor’s computer, and it too will be expire after 60 days.

Hoplinks also allow ClickBank to track hits and conversion rates. So when an affiliate logs into his or her ClickBank account, they will be able to identify how well the different products they’re promoting are converting into sales.

After creating a Hoplink, it’s important to test it to make sure you are credited with the commissions for sales you promote.

To test your Hoplink, you can enter the Hoplink directly into your browser’s address bar and hit Enter, or click on your Hoplink directly if you’ve inserted it into a web page. Once you’re on the merchant’s website, click the ‘Buy Now’ button, which should take you to the ClickBank order form. If you scroll to the bottom of the order form, you should see [affiliate=yournickname] If you do not see this, then something is wrong. Try regenerating the hoplink, and go through the process again.

The screenshot below is the bottom of a ClickBank order form showing [affiliate=yournickname] right at the very bottom.

Hoplink theft is increasingly becoming an issue with affiliate sales across all major affiliate networks – not just ClickBank. Hoplink theft occurs when the affiliate ID in a hoplink is replaced with another affiliate ID, resulting in the affiliate who actually generated the sale losing out on the commission. One way to reduce this is to cloak hoplinks, and ClickBank even advise their affiliates to do so. Cloaking prevents potential thieves from seeing the actual URL of the hoplink, and this means that they won’t be able to replace the affiliate ID with theirs.

ClickBank now provides Hoplink Shield which is a free tool that encrypts the affiliate and merchant nicknames in hoplinks. The Hoplink Shield now provides a layer of security and protection against hoplink theft, and it is no longer necessary to cloak your hoplinks yourself. It also protects hoplinks from adware/spyware that auto-swaps the affiliate ID with the perpetrator’s ID.

Payment

Affiliates receive a commission from Clickbank for every product sale they generate. The commission can vary from 1% to 75% and is calculated net of ClickBank’s fees of 7.5% + $1. The maximum commission paid out by ClickBank is $150.

Before an affiliate gets paid for their first commission, they will need to reach a payment threshold that is defined by them. The default threshold is $100, but can vary from $10 to $100,000. The other criteria that must be met is the Customer Distribution requirement which is as follows:

Sales made with 5 or more different credit card numbers; and,
Sales made with two different payment methods (either Visa, MasterCard, or PayPal)

The requirement helps to stop Affiliates fraudulently collecting rebates and/or discounts on their own purchases.

Affiliates in an eligible country will have to receive three paper checks from ClickBank over a three-month time period before they are eligible to receive payment via direct deposit. Affiliates who live in countries that don’t support direct deposits can still receive wire payments from ClickBank.

In the case of refunds, ClickBank requires affiliates to forfeit the commission they received for the product for which a refund is made. Customers have up to 60 days to claim a refund.

5. Clickbank Alternatives

ClickBank is one of the premier affiliate networks in the world, and is unrivalled as far as digital product marketplaces are concerned. Having said that, ClickBank does have its limitations. For one, it only caters for digital products. The other issue is that not all countries are eligible to use the ClickBank system.

Affiliate Marketers who want to market physical products and those that don’t live in an eligible country will be unable to use ClickBank. All is not lost though, because there are many other affiliate networks that make up for these limitations that ClickBank has. Here are a few alternative affiliate networks:

PayDotCom
This is another affiliate network that supports not only digital products, but physical products as well. There’s even better news… PayDotCom supports services too e.g. video production. It has over 600,000 affiliates and pays commissions ranging from 5% to 80%.

PayDotCom is very tightly integrated with PayPal, and offers a feature that is loved by all affiliates. Unlike with ClickBank, affiliates get paid instantly with PayDotCom. So there is no waiting for 30 days to receive commissions that you have made.

PayDotCom’s website is at PayDotCom.com

ShareASale
ShareASale has been in existence since 2000 and is one of the largest affiliate networks that supports different Affiliate Marketing models ranging from PPL to PPC and PPS, and even PPH (pay per hit). ShareASale supports physical products unlike ClickBank. The network supports affiliates from all parts of the world, so the chances of being accepted are very high indeed.

ShareASale pays affiliates on the 20th day of each month. As long as an affiliate earned a minimum of $50 before the end of the previous month, they will receive a commission payment by check or direct deposit.

ShareASale’s website is at ShareASale.com

Commission Junction
Known as CJ for short, Commission Junction ranks as one of the largest affiliate networks in the world, and is owned by the advertising company, ValueClick. It is reputed to power 53% of the top affiliate programs that are run by web retailers. Commission Junction runs a world-wide program, and it is used by most of the large retailers in the US and UK, and is supported by thousands of affiliates.

Commission Junction supports different Affiliate Marketing models from CPA to PPS, PPC and PPL. CJ is available to affiliates in most countries of the world.

Commission Junctions web site is available at cj.com

Conclusion

This concludes the tutorial on marketing a Clickbank product.

It is now recommended you proceed on to Part 5 – Introduction To Search Engine Marketing.