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The Future of Affiliate Marketing – Using iPhone Apps To Skyrocket Your Revenue

by Steve Scott | Join Him On Facebook

Apps are the Future of Affiliate MarketingYou’ve probably heard a lot about the income potential of mobile marketing.  But can you monetize it with affiliate marketing?  The short answer is YES!

In this guest post, Carter will talk about why mobile apps are the future of affiliate marketing.  Plus he gives some excellent pointers on how you can get started.

On a personal note, I’ve just jumped into the mobile apps market.  So I found Carter’s post to be chock-full of great information that I can immediately apply to my existing affiliate business.

In case you haven’t heard, there is a tidal wave coming.

In fact, the first waves of that swell are beginning to hit – in 2011 the mobile app market pulled in a cool $9 billion dollars. What’s more impressive than that is the fact that in 2009 it was only $1 billion. That growth trajectory is on par with few other phenomena in history, exceeding the internet and on pace to be the biggest single market since oil and coffee.

There are over 30 million apps downloaded every day in the Apple app store. There are expected be 3 billion smart phones used by 2020. Apple expects to make more money on apps than music by the end of 2012. Apple made $94 billion….last quarter.

The list goes on.

This blog post is about how to leverage this explosive market with one of the most lucrative web-based channels – affiliate marketing. Few people have tackled this combination and I want to show you exactly how you can make a TON of money doing it.

Allow Me To Re-Introduce Myself, My Name Is…

Carter. I own Bluecloud, a marketing firm that was built in internet marketing and has since switched to iPhone app marketing. Starting last fall, I launched my first major app campaign and learned more about how to make money with apps than I ever thought I could.

Since then, I’ve designed, managed, and published more than 15 apps, all of which feed my thirst to understand this gold rush and are beginning to bring in more money than websites ever could.

In early January I had an idea. I had a new account with ClickBank, Commission Junction, and others and was getting serious about some niche websites and affiliate marketing. I was staring at my freshly built WordPress site and beginning to write my first few blog posts.

Then I saw my iPhone app analytics account.

923 downloads on Monday. 972 on Tuesday. 901 on Wednesday. This was all from simply being in the app store – there’s no “ramp up” for SEO the way there is in web marketing, no months of waiting. There’s obviously a strategy behind the marketing, but the numbers I was looking at dwarfed anything I could produce with a website in under two months off organic traffic alone. My app had been in the store for 3.5 months and I had 200,000 users.

These numbers came from having my app be Free in the app store. I relied on the in-app purchases to make money. In-app purchases are when you buy something in an app – upgrades, functionality, etc.

I stopped for a minute.

What if there was another way? What if I didn’t need to sell coins or weapons in a game to make money? What if I didn’t need to rely on advertisements (the app equivalent of AdSense)?

What if I could sell PRODUCTS in the app and make a commission on that sale??

Lightbulb = On.

I fired up my iMac and started sketching out a prototype.

The Basics – How It Works

I’m going to describe the app I built and then later on will give you some ideas about how other affiliate models can be built.

I did a little keyword research on the app store which essentially deals with a lot of guess and checking. I’ve always had a personal love for fitness and health and had just signed up for the affiliate program on bodybuilding.com.

So, I went to the app store and typed in “bodybuilding” and assumed that I would find an app for bodybuilding.com that would obviously let me purchase products through my mobile device.

Wrong.

I found Bodybuilding’s app, but it’s all about exercises you can do. It has nutrition and tracking and lots of bells and whistles. But no product purchasing. Crazy, right? The biggest supplement company on the internet…and they’re not even selling their products?

My mission was clear – sell supplements through an app with all the links tagged with my affiliate code. I’d be the only game in town. And, I knew that the bodybuilding app had over 500 reviews, meaning it had somewhere in the ballpark of a million users, so people are definitely searching for these.

The System

Here’s a diagram that shows the flow of the traffic:

Bodybuilding gives affiliates a great set of XML feeds that you can use to stream some of their best products – top 50, top 100, best sellers, etc. It has all the data for each product and automatically tags the hyperlink with your affiliate code. The only issue was that it wasn’t necessarily formatted the way I wanted it to be for the app, so I downloaded the XML, re-formatted it, and uploaded it to my own server which is where my app pulled from. This gave me full control.

The app then displayed all products I had in my XML file as categories – Fat Burners, Muscle Gain, etc – the exact same way they’re grouped on the bodybuilding website. Users could download this and easily browse through all the products. It showed the discount, name, and thumbnail.

When a user clicks on one of the products, they’re taken straight to the bodybuilding website where they can read more and make the purchase. Every product is tagged with an affiliate link. Awesome!

And just like that – a free iPhone app that uses affiliate marketing to totally rock it with revenue.

WOW! So what’s the catch?

What I like so much about Steve Scott is that he’s a straight shooter and will tell you everything you need to know, both good and bad. I’m the same way.

What’s crazy is that there really isn’t a catch. The only thing to think about is that you have to make the app more than just an XML parser like I did above because Apple has gotten very strict with their Review Guidelines – they simply won’t let this into the store any more (believe me, I’ve tried). I was lucky enough to get it in there for about a week before I pulled it (for various reasons) but definitely would have to add more functionality if I wanted to get back into this.

There are LOTS of ways to do this – using native functionality specific to the iPhone, GPS and other relevant actions, maybe some different screen displays. You’ll notice the “Info” button on the top of the navigation bar – that drops down a form that allows a user to opt in for email. And believe me, you’ll get plenty of email addresses from this kind of thing.

Did It Work?

In a word – YES

Like I said, I had it in the store for a week and managed to get just over 800 users. Translated? $239.

I also had 40 people opt in for the email newsletter, which I put on a 6 part auto responder and made an additional $44.

You’re obviously wondering why I pulled this app. The biggest reason is because it required a lot of upkeep based on how I built it – I had to manually update the XML and keep the installations fresh. By the end of the first week I was getting a lot of people who were pissed that the product prices weren’t accurate – when BB changes their pricing on the master XML feed, I would have to re-export it, modify it for my own structure, then upload it to my own site. This included sales and promotions.

If I were a full time affiliate marketer, I would have invested in having this process automated, but it’s just not what I focus on. There is obviously a winning idea here and hopefully one of your readers out there will take this and run with it.

How You Can Use iPhone Apps To Power Your Efforts

Beyond my example above, I want to make sure you all leave with a real strategy and tool set that you can leverage into a long term and sustainable revenue stream. I’m going to provide you with three ways iPhone apps can drive your business.

Before I do, a quick note about being in the app space. If you’re unfamiliar with it, I urge you to read blog posts on my site or browse around the web to learn about getting started with apps. You need to become a registered developer with Apple ($99 a year) and then build your iPhone app programming with developers. I have a free eBook that walks through this entire process if you’re interested in learning more about how to go from newbie to app power house.

Similarly, Android accounts for 50% of the market now. The process is a bit more free market with Android, but follows the same general pattern. If you have an app built for iPhone/iPad, you should get it built for Android as well.

Now – on to the ideas.

1. Massive Email Opt In Potential

Hands down, the best way to create long term revenue in internet marketing is with an email list. It’s no coincidence that everyone talks about how much money is in the list and that’s not changing any time soon. There are ways to build relationships via mobile apps, but it’s a much different experience.

You can promote upcoming product launches, promotions, and deals for exclusive subscribers inside your app. MailChimp already has a dedicated API for iPhone that makes the integration seamless. You can pop in an Aweber form easily to drive your already growing lists. The numbers are staggering – you can easily get thousands of email signups in very short time.

Similarly, you can create user accounts within your app by asking users to put their email address in. This will give them a great reason to provide their email address and give you the information you want.

Bottom line – if nothing else, iPhone apps can give affiliate marketers an amazing boost in email opt ins.

2. Full On Sales Pitch

One idea I’ve always thought would be awesome would be to take the long form OptimizePress type sales page and build it into an iPhone app. You could break up the entire pitch into beautiful presentation. Here’s a very quick mockup I did using Steve’s book as an example – I built this template for iPhone/iPad a while ago that allows you to feature beautiful, high res photography, play videos, and sell content in the app. You can only imagine how awesome this would be for selling a specific affiliate product.

3. Drive Web Traffic

Apps can drive very nice web traffic if you build them correctly. I have one app that gets almost 50% of the downloads to go to the website and accounts for 70% of my sales. That’s almost 50 visitors a day. It provides an awesome boost for any web presence.

Similarly, the iPhone app community is dominated by people making games and trying to build brands. There are very few people using apps to sell things. This means that nearly all those names are untaken. The equivalent of this is URLs in 1997. Put it this way, I reserved app names such as “Addictive Games.” and “How To Use Instagram” and already have people calling me asking to buy them. Oh, and it’s free to reserve these names.

My point is that you can own an app in the exact space you want to be in and be first to market. In the next year, when SEO and web trends catch up to app marketing, people will start searching for apps the way they search for websites. Owning an app called “Football Gambling System” is worth it’s weight in gold for any affiliate marketer.

Join the Party or Give Me Your Cup

In the coming months you’ll hear more about mobile marketing than any other industry. It’s the #1 requested skill set on Elance and Odesk right now and everyone I know in the marketing world is doing something with apps.

Affiliate marketers have an enormous opportunity to leverage this platform to crush commissions everywhere they turn.

Now, it’s up to you.

Good luck and thanks Steve for allowing me guest blog for you!

Carter Thomas

Bluecloud LLC

Carter Thomas is the voice behind Bluecloud, blogging and consulting in the mobile world. He owns and manages over 15 iPhone apps, many of which he designed and marketed himself. He has mastered the secrets behind how to make money with apps and is constantly creating new, innovative marketing strategies that drive huge downloads and revenue. Beyond the app market, Carter owns three other companies in the retail, direct marketing, and internet marketing.

Take Action. Get Results.




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{ 10 comments… read them below or add one }

Thomas @ Mobile App Tycoon

EPIC Post! It’s great to see that there is potential to do affiliate marketing with iPhone apps! I’ve thought about it before, but not that I see that it is definitely possible I will totally keep it in consideration for my future apps!

I have one question for you. You say: “And, I knew that the bodybuilding app had over 500 reviews, meaning it had somewhere in the ballpark of a million users, so people are definitely searching for these.”

My question is: What is the formula you use to “calculate” how many users an app has based off of how many reviews it has?

Reply

Carter Thomas

Hey Thomas,

Glad you liked it. Answer to your question is that over the past year I’ve done about 20 “match backs” with apps where I know the final download number and then compared it to the review rate. For Free apps, I found that the ratio was around 1:1500 reviews/downloads, with a sliding scale from 1:1000-1:2500.

The scale changes based mostly on the timeline for which these reviews are placed, meaning the more spread out they are, the larger the ratio. I looked at the BB app and found that it was closer to the 1:2000 ratio, which is what gave me the 1M number.

Hope that helps!

Carter

Reply

Chris @ NPI

Hi Carter, great article. One of my friends told me, that there is also one great way for maiking money via mobile apps – prepare basic version of app for free, and take money for additional features.
BR, Chris

Reply

Carter Thomas

Chris –

You’re exactly right. That’s called the “freemium” model, where you convert free users into paid users. What that means is that when a user downloads your free app, they “upgrade” or “unlock” features in the app. This can be as simple as unlocking levels or as complex as purchasing currency in the app that can be redeemed.

Another option, which I have seen work well but also fail miserably, is to create a Lite and Paid version of your app. The lite version gives users a taste of what you’re doing, then then can move over to the paid version. Typically you see a 5-10% conversion on those upgrades, which can be boosted by promotions and other incentives offers.

Thanks for reading!

Carter

Reply

Albert

Isn´t it better to have a “responsive” website? With it you would´t only handle iPhone and perhaps Android, but also the other mobile devices. You would not have the hassle with the Apple registration and fee. And the customer does not have the hassle to download the app, instead he can straight on use the website. I do NOT think that for affiliate marketing it is really necessary to have all those functions you get with native apps.

What do you think?

Albert

Reply

Carter Thomas

Hey Albert,

You’re right in a lot of ways – mobile websites, specifically HTML 5 and CSS3, can deliver a cross platform experience for a lower cost. The cost of these sites is actually comparable to building an iPhone app, but you don’t need to have the developer fee.

The biggest difference is the downloads and eye balls. If you build that mobile website and just have it in cyberspace, you still need to go out and drive massive traffic to it via content, advertising, emails, partnerships, etc. When you put an app in the app store, you’re going to get a few hundred downloads in the first week (assuming it’s free and has a good marketing strategy).

The most amazing part of the Apple store is how powerful the market is to drive free users. By being on a “just released” list or having updates can get you thousands of eyeballs without having to compete with the millions of other affiliate sites out there.

Carter

Reply

Jane

I’ve seen Pat from Smartpassiveincome doing this app thing and also quite some other bloggers who take their business to the next level.

I agree with Chris – prepare a free version and put some exclusive features behind the wall for premium buyers.

Reply

Rob Cubbon

Really interesting post from Carter. I’ve been cautious about moving into Apps, primarily because I don’t know how to make them myself and I didn’t want to get taken in by all the hype. But, Carter’s mentioned two things that I hadn’t read before. One, that an app that is essentially a store with affiliate links – sounds great. Two, apps are great ways to build lists and drive traffic. Excellent info. I’m off to download Carter’s free e-book. Seeya!

Reply

Carter Thomas

Hey Rob,

You bring up some really good points about the app market (and any hot market in general), the biggest being how you can avoid getting sucked into the hype instead of the business model. I see this all the time – people selling and looking for a turnkey solution that will print money.

There is still a big hole in the market with apps. Most of the marketers and developers out there are looking at apps as products, whereas this article discusses how apps can also be tools. There are ways to capitalize on a hot market without competing directly with everyone else. The affiliate market will essentially become a secondary market within apps, which is untapped at this point and ready to rock.

Good luck with everything and I hope you enjoy the ebook. Please stay in touch if you ever want more information.

Best,

Carter

Reply

kevin redman

What a great article I have a fitness site and this is what I have been thinking about doing for a long while. Signing up now and hoping to learn more

Reply

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