Affiliate Site Selling For $7 Billion? 7 Key Takeaways

According to the New York Times, Credit Karma is about to avoid the IPO market, and sell to a financial firm for $7 Billion.

We’re talking about an affiliate site here. An affiliate site is one that earns commissions from promoting OTHER PEOPLES products (by linking to their website through a special link).

Credit Karma was founded by Ken Lin. It is a website that has grown to have a lot of content, and it makes commissions from credit repair sites, and loan sites, and so forth.

Now while it started out as an ordinary site, this is no longer an ordinary affiliate site.

They claim that one third of all Americans who have a credit profile, have used their site.

So that’s a lot of names and email addresses they have acquired over the last several years.

They have grown to be huge, and I don’t want to make this sound like it’s in any way typical.

But it is inspiring and there are many key takeaways that can be learned here.

7 Key Takeaways

#1 You don’t have to be a product owner, in order to build a big online business

Over a decade ago, I visited the headquarters of Clickbank for the first time.

And I asked them, about which vendors were making the most sales.

They shocked me by mentioning that 8 of the top 10 account owners on Clickbank were pure affiliates, and didn’t even own their own products.

They were people I’d never heard of, guys who were simply buying traffic, sending it to their own website, and earning affiliate commissions promoting other people’s products.

While I was already a strong affiliate at the time, and was also in that top 10, I was a strong vendor too. So I had assumed the top 10 would be full of vendors.

In the case of Credit Karma, they have taken affiliate marketing to the extreme.

#2 Leads are valuable

Affiliates can make a lot of money without ever collecting a single email address or lead.

However, if you go to sell your website in the future, the money you receive is not only determined by how much you are making on a daily basis…

...How many leads, and how much data that you have on those leads, plays a huge factor.

You can’t legally share that data, but if you sell your business, then it’s legal for the purchaser to acquire the data that way.

Credit Karma collected names, email addresses, postal addresses, phone numbers, credit scores and more, from MILLIONS of people. That data is now worth BILLIONS as part of this sale.

If you’re an affiliate at a smaller scale, the same principles DO still apply. Make sure to in some cases, collect names and email addresses. And have a newsletter followup sequence that builds a relationship and promotes relevant products to them.

That way, if you ever sell your site, it’s worth more money… AND you’ll make more from your site anyway, even if you never sell it.

#3 Drop Facebook Pixels on every page in your site

Looking at the Credit Karma website, I see they have 2 Facebook Pixels being dropped on every page.

That means they can now retarget to people, with ads on Facebook, Instagram and other web properties that Facebook owns or has agreements with.

You do so much to get people to visit your pages as it is, and if they aren’t on your email mailing list, then another great way to get them to come back is through retargeting ads.

Warm prospects who have visited you before are a lot more likely to interact with you and possibly make a purchase in the future, than those who are cold (don’t know who you are).

#4 Free Software often results in more shares, than other types of freebies

While it may have been more complex to build what they have today, the Credit Karma site actually started out as a very simple piece of software.

People loved using it and shared it with their friends. So that in turn helped it to grow organically, as well as through any deliberate attempts they made at driving traffic to their site.

I’ve done this in the past also, created free software, and found that the optins tend to keep growing organically from that software giveaway for years, as users share the software with others.

For it to work, it has to be genuinely useful, and be better than the other tools going around that people can obtain for free.

It’s not always easy to do this, but if you do have a great idea for software that you’d like to make freely available in your chosen niche, it can in many cases, prove to be more valuable than other forms of free gifts that get people to opt in.

#5 Optins aren’t everything

There are plenty of opportunities to get your credit reading, etc, from other sites outside of Credit Karma, without giving your name and email address to Credit Karma.

They have such useful pages and recommendations, that their site profits regardless of optins.

I personally have found that sometimes, as an affiliate, going to an opt in page is not the right way to go.

Sometimes it’s better to run ads, that go to a ‘bridge page’ or a ‘quiz’ or an article, that then leads directly to an offer that I’m promoting.

If that produces more profits, then go with that.

#6 There is a lot of money to be made in Affiliate Marketing

Now while Credit Karma is an extreme case (potentially about to sell for $7 Billion), I see new affiliates starting out every year, and making piles of sales online.

This does not happen to everyone, I’m not saying it’s push-button easy, I’m not saying it’s ‘typical’ but I regularly see newbies, coming in, and doing extremely well, within a matter of months.

There are a lot of high converting offers in many niches (health, wealth, relationships, alternative beliefs, finance, education, and more).

And it isn’t rocket science.

Here’s a simplified equation of what is in play as an affiliate:

(Leads x Conversion Rates x Avg$ Per Customer) - Ad Spend = Affiliate Profits

For example…

If it costs you $1000 to send 2000 clicks to an offer, and that offer converts at 2%, and you earn on average $40 per sale:

Leads = 2000 clicks
Conversion Rate = 2% (0.02)
Avg $ Per Customer = $40
Ad Spend = $1000

(2000 x 0.02 x 40) - $1000
 
= $1600 - $1000

= $600 (Profit For The Affiliate)

If you’re not in profit, then:

• Either the traffic that is purchased is not the right audience (and conversions will suffer)
• Or the offer is not a proven one (conversions aren’t good)
• Or you’re paying too much for the leads
• Or the average commission $ is just too low.

I know I’ve gone off on a tangent here, but I wanted to mention this because, there IS a lot of money in affiliate marketing, but sometimes people over-complicate things when it comes to figuring out what’s going right and what’s going wrong.

Sometimes words in your ad itself, or on your landing page, are all the difference between a conversion rate of 0.3% and one that is 2% or higher.

Sometimes it’s a matter of needing to try several audiences to find the winning ads.

And sometimes it’s a matter of capturing leads, and following up with those leads with an autoresponder series of emails, that takes a little time to get the sales, but can lead to more sales of other products long term.

#7 Dream big and take action

It takes just as much energy to dream big as it does to dream small.

You are not protecting yourself or anyone else, by dreaming small.

Small dreams = less motivation to carry on.

I don’t see people who aim for the sky, and reaching the top of a skyscraper, being too disappointed.

I also don’t see people aiming for the top of a skyscraper, reaching the sky either.

It’s really important to eliminate any invisible glass ceilings, and have a dream that truly excites you.

Make a plan and work towards it.

Ken Lin had a dream and he chased it. His vision became more clear as he went along, but he took action.

I see the biggest difference between those who succeed at Affiliate Marketing and those who don’t, is that those who succeed are the ones who dream big, and take a lot of action.

When they take action and mistakes are made, they embrace the lessons that are learned along the way as part of the journey.

They are willing to take a lot of swings at bat, and all the mistakes make them self-correct, learn lessons, and eventually hit the ball out of the park.

I hope you enjoyed this article, and that it helps inspire you to take action in your online marketing dreams.

In the coming weeks I’ll be sharing several more affiliate marketing tips and videos with my newsletter subscribers.