Where does your business fit-in?

The once a year rush…

The every holiday surge…

The B2B…

Or the product launch…

With Google’s and others’ free tools on the internet, a small business owner can get very good insight into business seasonality, and shopping search trends. If you have good relationships with your suppliers and manufacturers, it’s often possible to design pre-release campaigns for upcoming products. Search engines place some weight on the first websites to write about specific products or services. If you’re that website, you can gain considerable traction in natural search rankings, and possibly a huge sales boost once the product is launched. This is just one example of how trends like this can be used, but the possibilities are endless and the data is free.

A great example that I found this weekend, is B&H Photo. They sell a variety of non-photography related computer and technical products. What quickly caught my attention is that many these products are being sold well below any other online retailer’s price, even cheaper than anyone on eBay. I don’t have access to wholesale computer accessory costs, but I imagine that they aren’t making much money, if any, on their computer product sales.

So how is this smart marketing?

When an established website like B&H draws sales from non-core products, they gain additional customers and brand exposure. What they gain by selling at cost, is the opportunity to sell other products for profit, and they gain repeat customers. In the end, if the amount of money spent marketing and supporting non-core products is minimal, there is absolutely no downside to this practice. If they aren’t making money from those computer related sales, they’re making money from those additional customers that are also interested in cameras, memory cards, photography accessories, and more computer accessories.

A good idea for some but not for everyone:

This practice can be a strong marketing technique, however, it will not create a sustainable business model for everyone. A businesses that can most effectively harness this technique must have a strong search engine presence, or the ability to draw sales and traffic at little to no additional cost. This technique is probably not a good idea for a startup business unless you really know what you are doing. A business must also have access to related but non-core products at a very competitive price.

Obvious potential pitfalls:

• Some strong reserve must be used to not cannibalize existing profit margins, as it extremely easy to sell short on everything. Don’t make everything a loss leader, only those non-core products that you are adding.
• Another danger is accidentally migrating from one core product type to another. It needs to be clear to yourself and to your customers what your business is there to do. If you are a photo shop, that sells some computer accessories, it should be clear that you are not a computer accessory seller that has some photography equipment. This is absolutely key in protecting your brand, and sustaining your business model.
• The other products that you decide to sell must be related to what your business does. If would make no sense for an online flower shop to start selling car parts. You need to be careful not to dilute your brand, message, and what it is you currently do with completely unrelated products.
• You do not ever want to enter an arena that will create a lot of additional customer support requests. This is a quick way to nullify any gain you get from additional customers and sales.

The big picture:

It’s sometimes difficult to grasp the concept of loosing money on one place to gain money in another. If you have the ability to step back and look at the big picture, you will find that there are numerous areas where a loss here can create a huge gain somewhere else. Small steps should always be taken when testing out a system that has both the potential for a loss and a gain, but I think that many will find that this is a useful, appropriate, and completely possible marketing technique.

Do people actually respond to fake, photographs? Only your own testing can tell for sure, but one thing’s for certain, if the images on your site are actually unique and speak to your customers, you have an advantage over everyone else.

Here’s my favorite examples of the too-stock photography that we see everywhere!

The collaboration

Great ideas come from conflict and discussion, not cooperation. If everybody’s happy, then chances are nothing is getting done.

The corporate team

When you take a picture of a bunch of models in business suites, you end up with… A bunch of models in business suites!

The business professional

Hmmm. Just out of college and standing around dreaming. My advice is to stop standing around and get to work.

The customer service rep

If it were this much fun to work in a call center, they wouldn’t have the highest turnover rate of any job.

The grunge factor

Nothing says professional like a scruffy face or a crumbling wall…

However, You shouldn’t take this as a recommendation to put a bunch of low quality pictures on your site. But, trying to find some realism isn’t a terrible thing.

Do this:

• Show realism!
• Connect with your visitor!
• Don’t choose a photo just for a pretty face!
• Choose photos that have some relation with your service!
• Use only clear, sharp, and high quality photos!
• Take time when choosing any stock photo for your website. Make sure you can easily explain why you chose that image!

Here’s an interesting article about how people in photo’s can affect your website’s conversions.

First thing you need to do to make sure you are using yahoo’s built-in analytics or configure your own analytics to report on all traffic from your yahoo campaigns and run a report by the domain that the traffic is coming from. You want to sort that report by the overall clicks from a particular domain.

Here’s an example of the report that you need (signifigantly reduced for readability).

Now if you look under the conversion column in this report, you will see that a few of these sites have provided no conversions.

These are the sites that you want to block from your PPC campaign. In this case the wealthygeek.com (3/1039 = .29%) is a conversion rate that I am not willing to pay for, so I’ll block it and others with poor converting traffic.

I would make sure that you have at least one month of traffic and PPC statistics, three months or more if you don’t get a lot of PPC traffic. Remove domains that tend to provide a lot of traffic but no conversions. If a site can’t provide a 1% conversion rate, it’s probably not worth keeping. Depending on your past history you may want to set your threshold above 1%.

Just remember that even if your PPC traffic goes down a bit, your overall cost is going to go down with it, and your overall conversion rate is going to go up.

Warning: If your ads attract poor visitors, it wont matter what website they’re on, so don’t use this method to optimize your account if you aren’t getting sales. This tool is useful only to remove sites that just send bad traffic. You should always be testing new key phrases, and new ads, and eliminating the ones that can’t provide cost effective traffic.

Yahoo also has a Q&A post as there have been a ton of question since this feature was launched.

Initially many website owners will go with the shot gun approach because they can get a lot of affiliates promoting their business, and the idea, if you get enough traffic someone will eventually buy something, generally works. It’s easy, doesn’t require a huge commitment of time, and theoretically runs itself.

The sniper approach, which I prefer, allows you to closely monitor and cater to each individual affiliate, and when affiliates are given good support and all of the tools they need to succeed, the results can be amazing. This type of program requires constant attention and thorough investigation of affiliates that want into your program.

Despite all of the hype of how much an affiliate program can do for an e-business, they fail the majority of the time. Affiliate programs are very difficult to make successful no matter what approach is taken.

Why the shotgun method often ends miserably:
When you let everyone into your program, you are going to be at some point letting people into your program that want to rip you off. Especially in click or lead based affiliate programs, it is extremely easy for an affiliate to click on their own banner, or fill out a form themselves. This may not seem like a huge problem, but once you start getting 50 affiliates making fake transactions, the ability to control the situation becomes impossible. What started out as an easier approach to affiliate marketing, just became much more expensive and far more time consuming. When programs enter this state where lots of affiliates are scamming the owner, they will most likely destroy themselves. The affiliate owner can’t find value in keeping the program going because they aren’t getting a positive return on their affiliate spending, and eventually they scrap the program. These programs can be successful, but fraud to any degree must be dealt with swiftly.

Why the sniper approach also often ends miserably:
While the sniper approach usually has the best long-term outlook, it is very difficult to get off the ground, and keep in the air. Finding high quality sites to join and promote your program, is very difficult. For every ten decent sites that join your program, only one or two will ever send you anything, and probably only one of fifty will ever be a really good affiliate. You will also need to actively seek out potential affiliates for your program, as passive promotion will rarely produce good results. Find related but non-competing sites and market your program to them.

Whatever approach you take to your affiliate program, treat it like another product, and market it like another product. “If you build it, they will come”, doesn’t apply anymore to an affiliate program than to a website.

My rules for protecting your program:

1. Don’t start an affiliate program if you don’t have time to manage it. If you can’t allocate at least an hour a day to running your affiliate program, you shouldn’t even start it in the first place. With the exception of outsourcing your affiliate program, it will cost you more than you will get back from it.
2. Use a 3rd party affiliate management platform. Affiliates generally have a lot more trust in a 3rd party managed program. The most trusted, but most expensive, program is commission junction, while shareasale, clickbank, and linkshare are a few other popular platforms. 3rd party platforms help maintain honesty between affiliates and program owners, and provide an existing base of affiliates for your program. Unless you have a very strong brand, a program on a 3rd party platform will be beneficial.
3. Don’t be afraid to reject an application. You pay to have an affiliate program, you pay people to put up your links, you are the only entity that takes any risk in setting up a program. You have every right to deny, deny, deny. If the site looks spammy, if they aren’t related to your industry, if you just get a bad vibe, deny them.
4. Automatically decline all mega-mall, and shopping directory sites. No offense to any of these site owners, but these affiliates are almost always the ones who commit affiliate fraud. Anyone that has been marketing online for a while, knows that unless a site is offering something vastly unique and special, the site is essentially worthless.
5. Deny unrelated affiliate websites. If you affiliate program is a pay per sale program for car parts, it’s unlikely that a website offering jewelry is going to provide any valuable visitors to you. Even if they get 50,000 visitors per day, those visitors are most likely not looking for car parts and therefore are not valuable to you. Adding affiliates that have little chance of ever sending relevant traffic will only junk up your program, and make it harder to manage.
6. Closely monitor transactions from new affiliates. Affiliates that are gaming your program will usually send a few real transaction through and then slowly send fake ones. Once you have a program for a while it gets easy to spot a bad affiliate. If your best affiliates send ten transactions a month, and a new one sends ten in the first day, there’s a good chance they’re up to something. Also, monitor things like exactly what website the transaction originated from, the IP address of the transaction, etc.
7. Go out of your way to support very good affiliates. A few really good affiliates can single handedly make an online business successful. If you start seeing a few affiliates performing ahead of the pack, contact them and see what you can do to help them out. Raise their commission if necessarily (Do this before they ask for it), and just do everything you can to help them out. In the end, they will reward you for it.
8. Track everything. This goes without saying, if you aren’t tracking your conversions, then you don’t know if your marketing is worth it.

You should also not be overly protective. You do still want people to be interested in your program. Your goal is to prevent the bad ones from ever joining, and help the good ones promote your program.

Bad affiliates poison an affiliate program for good affiliates, so keeping them out is in the best interest of you and your good affiliates. When you can put more time into helping your good affiliates, the results can be great, and both you and your affiliates benefit from each-other.

Some good affiliate marketing blogs:
http://affiliate-blogs.5staraffiliateprograms.com/
http://blog.affiliatetip.com/

This should also work on myspace, and other networks that allow html, but do not allow javascript or flash.

HTML-only tracking systems:

• HitsLog
• StatCounter

There's going to be a lot more tracking programs than these, but a lot of them are unprofessional or require you to link back to them. Your current analytics program may already allow image only tracking, so I would check there first to be sure.

Configuring your tracking:
When you put html into a craigslist ad, you need to format the entire ad in html, not just the tracking image. If you don't there is a good chance that something is going to get messed up.

The best way to do this is to use an html or text editor to make your ad. On craigslist in general, I have had the best results with a writing very clean copy that reads straight through. The ad needs to be clearly written, and should be very concise. Once you are done making your ad, paste the tracking image code at the bottom of it. Then copy and paste the entire html into the craigslist ad (Don't copy the <body> or <head> tags). You should also place one or more good images at the bottom of the ad, assuming it is for a product. Pictures make a huge difference for any classified ad.

Example of complete ad code:

Now when you log into your analytics account, you should see reporting from this specific ad. This type of tracking lacks a lot of the data that full-featured analytics will have. But if you can't use any scripting, it's basically the only way to track.

There are so many how to guides that people need for running their ecommerce website's. With that in mind, this is a list of very useful how to's related to ecommerce. Hopefully this post will be a good resource for site owners, and those looking to get into ecommerce. Topics include everything from setting up a web server, marketing, to integrating a website with a payment gateway.

Please send me some feedback if there are some good how to's that should be on here.

Servers / Networking / Programming Setup:

• The perfect Fedora 5 server setup - While I don't like the virtual control panel that the guide recommends at the end, this is a perfect step-by-step guide to setting up a Fedora 5 Linux server. This guide covers setup for PHP5, mysql, SSL Support, ProFTP, and a few others. The guide states that it is for 64 Bit systems, but I have setup five, 32 Bit systems without any additional modification.
  Fedora Core 4, Fedora Core 3 setups are also available.
• Setup a Windows XP Web Server - Also php.net has an excellent guide on the overall steps to setup php and Apache on windows. The php.net version tends to leave out some things that later may cause errors, but the comments section of the article probably cover all of the missing information.
• Windows XP Apache Virtual Hosting - Having needed to setup a Windows XP server recently, this guide covers both the setup, and how to use virtual hosting on the server allowing multiple websites to exist at the same time. I have a company server that was setup using this and the previous guide running several websites, very effectively.
• How to make Cat 5 / 5e Patch Cable - I've saves myself a few hundred dollars in under a year, by making all my own Ethernet patch cable. You can get cat 5e cable and connectors really cheap when you buy them in bulk. If you think you may be needing a lot of cable in the future, this is the way to go. It may take a few tries to get your cables nice, but once you get it down, you cables are just as good as anything.
• 13 *nix command line tricks - A quick tutorial on a few command line codes that are very useful but often not known, not used, or one's that we forgot.
• Top 5 PHP security holes - After running a server scan I was referred to this excellent resource on the major security problems that websites commonly have with php. Since almost all of these problems are due to use error and poor programming, they are all fixable.
• Integrate Linux PHP with a MSSQL database - After working on a few of these integrations, one successfully, and one failing, this is the best overview on the topic that I have found. Easysoft.com also has another good guide, but it is geared to using their own paid extension, which is expensive. I don't recommend performing this integration unless you absolutely have to (Just save yourself the time, and switch the site to a windows server), but these should get you pointed in the right direction.

Web Design / Hosting / Usability:

• How to make a horrible Oscommerce site - From Jason Chance, this is a great, humorous guide on how not to make your oscommerce website.
• 10 Ways to ruin visitor experience on your website
• 10 easy steps to a horrible ecommerce site - Another from Jason on sitepoint.com, this is an extension of the oscommerce version, and covers mistakes that all websites should avoid.
• B2B Usability - From Jakob Nielsens Alertbox, a guide to usability from a B2B vs. a B2C standpoint.
• Top 10 mistakes of web design - One more from Dr. Nielsen, on the top 10 mistakes that website creators make. Weblog mistakes is another valuable article for blog owners out there. I admit that 'Irregular Publishing Frequency' is one that I rarely adhere to...
• Shopping Cart Abandonment - Don’t do this… - 3 simple tips to lowering shopping cart abandonment rates.
• How to ruin a web design - This is a good article covering how to not over think a design project, and that often more people working on something means less quality.
• How to choose a web host - This is a good overview to help people that aren't quite sure what they need, pointed in the right direction in choosing the company to host their website.

SEO and Marketing:

• How to Conduct Keyword Research - This is a great introductory guide on finding relevant keywords for a SEO or PPC campaign.
• 5 most common SEO mistakes - 5 simple SEO mistakes that are often overlooked.
• Ultimate guide to link-baiting and social media marketing - From one of the most authoritative persons on link building anywhere, Andy Hagens tells us how to properly build linkbait. I would consider this the definitive guide to linkbaiting. What is linkbaiting you say?
• List of the best directories - This is the best list of web directories out there. Directories are separated by value, and prices are listed next to each directory.
• How to market to other business owners - From entrepreneur.com, this is my '7 commandments' on marketing B2B products and services. I highly recommend printing this one out and looking it over any time you need to deliver a message to a B2B audience.
• How to add $1 Million in revenue to your business in 1 year - From Andy Beal at marketingpilgrim, this is written with an SEM agency as the intended industry target, but it can be applied in theory to almost any ecommerce business.
• How To Generate Targeted Site Traffic Without Search Engines - This is an awesome guide on building traffic without completely relying on search engines for it.
• Top 10 business mistakes, marketing firms make - Another from marketing pilgrim, this can also be applied to just about any business.

Payments:

• Six Payment Gateways Reviewed, The Chargeback Challenge, and Solve the Payment Processing Problem are all written by John Conde from the merchant-account-services.org blog. These are all great articles and should be considered essentials for website owners looking to accept credit cards on their website.
• How to accept credit cards on your website - This is a simple guide that I wrote a few months ago covering basic option to accepting payments online.
• Integrate a website with Authorize.net using php 5

Other / random useful stuff:

• Microsoft Windows Power Toys - If you don't know what these are, check them out. Extremely helpful, and can safely change a lot of things on your computer that you couldn't before. I highly recommend the Tweak-UI, Clear Type, Virtual Desktop, and the Image Resizer toys.
• Magazines for small business owners This is an article covering some good business magazines for print and online for business and website owners.

Web Server Control Panels:

• Plesk
• cPanel
• Webmin
• cube panel
• CWIPanel
• ISPConfig

Getting Information (Where I go when I need help):

• Digitalpoint Forum
• Sitepoint Forum
• Webmasterworld
• WebProWorld

Freelance Marketplaces (If I need programming/ design work):

• GetAFreelancer - #1 choice
• Rent A Coder

If you know of any really good how-to's or guides for ecommerce do-it-yourself'ers send them to me. I may add them to the list.

A while back I found a table that compared the click through rates of Natural and PPC search traffic. I cant seem to find the original source any more, so my apologies for not citing the source of this information, although it was a reputable source.

I have placed the data from that table into an easy to follow graphic model of a common search engine result page.

To put it simply, if you are only marketing to the natural search or the PPC search environment, you are loosing out on a huge potential percentage of visitors. Most search marketers will agree that a marketing campaign should be split between natural search marketing, PPC marketing, and other mediums of advertising on the Internet. Even if you have a #1 ranking for a search phrase, you could be loosing 50% or more of your potential customers to those that click on PPC listings.

Obviously this data may not be appropriate for every situation, such as non-commercial sites, sites that have no budget and by some miraculous event have top search engine ranking, or sites that rank high naturally but have ridiculously high PPC competition and cost per clicks.

Otherwise, I think it is almost always best to spread out a marketing budget. Work some on a long term SEO campaign for natural rankings, and work some with a short term PPC campaign. Having success in both PPC and natural search areas can make the difference between an ecommerce website, and a very successful ecommerce website.

A word of caution about the #1 PPC spot.
In my experience the #1 spot on any high traffic PPC listing will get you a large bill and a lot of worthless clicks. If you do decide you want this spot and you're advertising for high cost per click and / or high volume search phrases, you should track your campaign very carefully to ensure you get a positive return from it. I have seen companies burn through tens of thousands of dollars in a few days without anything to show from it, by going for the #1 spot on a high traffic broad search phrase.

So taking the 'bold' assumption for this post that there can be no positive SEO benefit from paid links, can it still be worth it to purchase text link advertisements?

My answer is absolutely...

I have experience buying text links with several companies. I have been buying text links for over three years, and I track my text link purchases very closely, and through this tracking I have developed a system for text links that works well, and prevents the loss of excessive money on text link advertising.

Rule: Make sure that you are purchasing text links only for the purpose of receiving relevant, qualified traffic, from real websites. Take SEO completely out of the picture when purchasing text links. If you buy text links only based off the Google Page Rank where your link is located, then this article is especially for you.

What you need to purchase text links:

• Tracking software that can track from a domain or from a url tracking code (EX: mysite.com?source=thissite).
• A predetermined monthly budget for text links.
• Time and Patience.
• A place to buy relevant text link advertisements.
• Optional but very helpful: Microsoft Excel, or another Spreadsheet Application.

From personal analytics based knowledge of how website traffic and visitor behavior can change over a period of time, I recommend testing each link for a minimum of three months. Three months will give you enough time to test the potential of any individual link, and accurately determine whether it is cost effective or not. Sometimes six months is necessary to achieve an accurate model of the potential of a text link, but three months is normally sufficient.

Steps to obtaining good text links:

1. Define how much your visitors are worth.
2. Find relevant topics to your website.
3. Find websites in those relevant topics that allow advertising.
4. Purchase links on those websites that meet your minimum criteria.
5. Track visitors from those websites for a minimum of three months.
6. Analyze your data and determine if the link is acceptable.

1. Define how much your visitors are worth.

This is a step that can be done at any point in the process of your website, but must be done before you review your text link effectiveness (Step 6).

You are essentially going to define the desired action that you you want each visitor to make and then define a value for that action. There are a number of possible actions depending on your website including a sale, a lead, a visitor, a comment, or anything else that you would consider a conversion. Once you define the action, you need to place a monetary value on that action. You can normally do this by calculating how much you make on the average conversion. This can be very difficult for lead generating sites or non-sales, but you must calculate some baseline value for the text link tracking to be effective.

I normally use text link ads for lead generating sites, and a lead is what I would consider to be my desired action for these sites. A simple example would be calculating the value of a lead to be $50. This number is now my base reference I am going to use to compare the cost of my text links with the return that I get from visitors referred by that website.

Note: The $50 is a fictitious number, and you need to find your own value for a conversion on your website.

2. Find relevant topics to your website
The goal of this step is only to identify suitable topics that your website could benefit from advertising on. We're not trying to find actual websites yet.

There are likely to be a number of related topics that your website will fall under. Targeting these topics in addition to the one's your website is primarily focused on will increase your advertising options, but will keep your visitors targeted.

For example, if you sell web design services, similar topics could include web hosting, php programming, SEO, pay per click advertising, etc. These topics are similar but are not overly broad. An example of an overly broad topic would be computers. Yes, computers are related to web design, but the chance of someone searching for computers in reference to a web designer is relatively low.

3. Find websites in those relevant topics that allow advertising.
This is the most difficult step in the process. Finding websites that allow advertising, but at a cost that is low enough to make it worth advertising on is not always an easy task.

I strongly recommend against advertising on large website networks. While these sites could potentially provide a lot of traffic, they are very expensive to advertise on, and more often than not, they send un-targeted traffic that is a waste of money for text link advertising purposes. If you are on a branding mission and money is no concern, then by all means spend away.

There are several text link selling websites that have a large inventory of affordable, quality websites to advertise on. My personal recommendation is Text Link Ads and Adbrite, but Text Link Brokers has always been highly recommended to me as well. Linkadage is another site that normally has a large inventory on it, but most sellers are only trying to make a quick buck based only from Google Page Rank. You may find good sites there, but expect a lot of no-traffic links for sale.

Through these text link services you can easily purchase text links on targeted websites. They have hundreds if not thousands of websites that are on their advertising networks. The best thing about using Text Link Ads and Text Link Brokers is that they completely manage the billing, and placement of all of your links you have through them. Once you build up a decent quantity of websites you are advertising on, this makes your life much easier. You can cancel links, add more links, and manage your existing link text.

If you would rather find websites yourself, you can search by the relevant topics you listed in step 1. Search for blogs and websites that are related and offer text links already. It is normally a waste of time to solicit to websites that don't offer advertising, as it will be taken as spam, and will be unlikely to even get a reply.

4. Purchase links on those websites that meet your minimum criteria.
The best sites that I have found to advertise on are blogs, and high quality information websites. There are blogs and information websites on just about every topic imaginable, and these sites generally provide very good referrals. They may never send a high volume of traffic, but the traffic that they do send is normally very good. Alexa rankings are not accurate unless the Alexa ranking is very low (sub 10,000). If you can, look at the actual websites, and find ones that are high quality and meet your requirements.

3 Things You Want In a Text Link

• The first link on the website
• Homepage and Every Page Links
• A Price withing your budget
• A title that entices visitors to click on your link

Getting the first links:
Assuming you're using a text link ads or similar service, the first thing you should do is monitor the new inventory daily. Find out when new text link inventory is added and check for links during that time. You may be able to get email notifications when new links are added as well. The goal is to get the first link position on any given website. To do that, you need to buy links soon after the website is purchased. Having the first position when advertising on a website is essential to get the most out of that individual text link.

The pages you want your links on:
Next, you want to look for links that are on the homepage or on the home page and every other page on the website. We're not getting links for SEO, so you can request to use a nofollow tag. Personally I don't worry about it too much. Google and other search engines are pretty good at seeing paid links, and there is nothing wrong with purchasing link as long as you aren't doing it to manipulate search results. If you're in doubt, use nofollow.

The right price:
The links you find should be within your predetermined monthly budget. For text links, it is common to find links in the $15 - $20 per month price range. For links on more trusted and higher traffic websites, they can get well into the hundreds or even thousands of dollars per month. I recommend against purchasing high dollar links unless you have the money, and have some experience purchasing text links. The high price text links can be well worth the cost, but you can just as easily loose money on them.

The right link text:
Like any advertisement it is important to have a relevant call to action in your text link. Since the maximum characters in a text link is often too low for any real promotion, a question is often a great way to get visitors to click on your link. Since you aren't charged per click, you want as many qualified people as possible to click on your text links. Text like 'Need a low cost website?', or 'Want to get more traffic?' would be appropriate, relevant, and would entice visitors to click on the link assuming that those links were applicable to your site.

5. Track referrals from those websites for a minimum of three months.
Tracking your text links is absolutely key to finding out whether they are worth the money or not. Lets face it, if you aren't getting any SEO benefit, so why would you want to keep paying for a worthless link.

I have used several tracking systems, and the best I have found for this purpose is hitslink. Hitslink is cheaper than other more robust tracking systems, still offers the necessary features and is easily configurable. I'm sure that there are hundreds of possible systems out there, probably in the same price range as hitslink, so by no means do you have to use any particular system. Just make sure that you can track and label visitors from a domain or by using a url tracking code.

Setup your link tracking based on the url of the website that your link is on (Ex: mysite.com). You can also append a tracking code to the end of the links you are advertising (Ex: mysite.com?source=thispage.com). I don't like adding anything to a url if I don't have to, simply because complicated url's don't look as nice as clean ones.

Also make sure that if you are targeting a topic on your website to use the specific page for that topic, if applicable. This can help increase the chance that visitors will complete a desired action.

6. Analyze your data and determine if the link is acceptable.

After the initial three months is up, it's time to analyze your text link. Build a report for the three months of traffic from a particular text link. You should have the total number of referrals from that link, and the number of conversions from those referrals. If you are basing your visitor values from a per sale percentage, you should have the total dollar amount generated by those referrals.

Using the example earlier of $50 per lead, I'm going to make a simple table showing whether a text link was effective or not.

Lets assume that I pay $30 per month for a text link on a website. I tracked all of the visitors and all of the leads from that link for a period of three months.

Since I value each lead at $50 and I received 2 leads, I made $100 from the referrals that the website sent me. It cost me a total of $90, therefore my Return on Investment (ROI) is ($100 - $90)/$90 or 11%. This means that for every dollar I spend, I get back one dollar and eleven cents.

11% is nothing to brag about, but it is a positive return which is what is important.

With that in mind, as long as I receive a positive return on a text link, I stick with it. I also will sometimes stick with a site for another round of three months if I still have hopes for it. If I don't think that I am going to pull a positive return from a link, I drop it. Six months is definitely long enough to get a solid prediction, so after six months, if the site isn't worth it, get rid of it.

It is common for sites to send very few visitors some months, and a lot on another month. For this reason three months is the absolute minimum amount of time to develop an accurate model of what you can expect from a website.

Bi-annual review:
After a website meets the minimum requirements for three months, I review it every six months after to be sure that it is still performing. If is fails for a six month period, it gets dumped. Websites and their traffic often change, so it is important to do the six month review. If the links are very expensive, then a three month review would be more appropriate.

Wrap-up:
Hopefully you have plans to increase your budget as time goes on. This way you can keep good links while adding and testing more link to your portfolio. Excel is the best way I have found for tracking a small to medium sized number of links. I imagine that there are some software programs that can keep your links organized, but Excel us easy, most people have it, and it works perfectly for this purpose.

Be prepared to buy links that have absolutely no return. Some of the most promising sites I have advertised on were worthless, while ones that I thought had no chance, paid for themselves ten times over per month. Unfortunately, it's not uncommon at all to purchase bad links. Some links just wont send you more than a single visitor. Others will send you ten or more a day. Keep experimenting with sites and link text, and you should eventually be able to find a system that works for you.

A great blog related to text link advertising run by text link ads is the Link Building Blog.