How to test and track your online advertising

Introduction:

Since 1993, Ken McCarthy has been at the forefront of

innovation in the Internet industry. That was the year he gave

one of the first talks on the Internet as a direct marketing

medium. In 1994, he sponsored the first conference ever held

on the subject of the commercial potential of the World Wide

Web. Mark Andreesen, the inventor of the web browser, was the

keynote speaker. That same year, Ken wrote the first article on

email marketing published in the recognized marketing industry

trade journal.

In 1995, his book, The Internet Business Manual, was the

first book on the subject of web entrepreneurship published in

Japan. Since then, he’s been a consultant on Internet trends to

NEC, one of the world’s largest technology companies.

Rick Boyce, Director of Sales for the pioneering online

magazine, Hotwired and widely credited with popularizing the

banner ad model, credits Ken with introducing him to the

potential of Internet advertising.

KM: I happen to be in Orlando today and our guest … Mr. Mizel is in

Hawaii. And those of you who just finished our System training

event in Cincinnati know we mentioned Jonathan’s name a lot.

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When we handed out our resource sheet and our million-dollar

Rolodex we made sure his name was the very first person on it.

And the reason is, in the Internet marketing world there are

really very few people who are anywhere near as plugged in as

Jonathan is. He’s not only been marketing online since 1993,

but he’s developed just an astounding network.

He’s got a very sane grasp of the realities of business on

one hand. And on the other hand, he is one of the most likely

people to catch the next wave and one thing that goes on in this

Internet business is there’s a new opportunity every six to

twelve to eighteen months where a new medium or a new trick

comes along and the people that get it first have a huge

opportunity. Today, though, we’re going to focus on some really

fundamental bedrock essential stuff and that often gets glossed

over at Internet seminars. And we covered it fairly extensively

in the System training event, in fact, I even gave you guys a

book about it on testing; the key to direct marketing profits.

Today we’re going to really focus on what testing means in

the context of online marketing. And there’s really no one better

on the subject than Jonathan. So, Jonathan, we’ve got a lot to

cover so I’m going to invite you to jump in and tell us what this

is all about and why it’s so important.

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JM: Well Ken, as you just said there’s a lot of new, exciting,

interesting and fascinating new ways to market and they seem

to come out every six months or eight months. And the biggest

problem with following these paths is quite often we do it - we’re

seduced by some exciting new marketing technique - and then

we don’t ever actually test to see whether it works. So what I

want to do today is discuss how to track and how to figure out

what we call metrics and I’ll even define what those metrics are.

This way, if some exciting new technique like pop-ups or some

new opt-in email technique or some new program comes in to

the Internet and you want to test it, you can actually test it with

a degree of certainty that it is going to make you money.

Because what we found is, and I’m sure you found the same

thing, over the last, what, how long have we been at this now,

nine years?

KM: Yeah, ’93.

JM: We’ve tested a lot of stuff that’s come out and some of it works

like crazy and other stuff just doesn’t work at all. I’m going to

give you an example of the … list. There are sites called free-

for-all (FFA) links pages and you basically go to one of these

pages as a website owner and you’ll add your link to this free-

for-all links page. Hopefully someone will go to this page and

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click on your link and come visit your website, presumably buy.

We thought this was interesting because there are a lot of these

software programs that allow you to submit to a bazillion of

these particular programs.

We have one software program that allows you to submit

to 220,000 free-for-all links pages. And you would think if you

try this particular promotional technique, you would get some

traffic and make some sales. Well, using the metric techniques,

what we found is we got (I seem to have spent an hour working

on this thing submitting to the 220,000 links pages) and I think

we got two visitors and no sales. So really, these metric

techniques and tracking techniques are going to tell you what

works and what doesn’t and ultimately where you should spend

your time. The most important part is, there’s only 24 hours in

a day, there are only so many things we can do. You don’t want

to spend an hour getting two visitors to your website. If you’re

going to spend an hour to trying a promotional technique, you

want to try something that’s going to bring a lot of visitors in.

Something that will have a big impact on your bottom line, get a

lot of people to the site and convert those people to sales.

So, using the tracking and the metric techniques we’ll talk

about today, is really going to give you an idea of where your

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time and money and energy is best spent. Once you understand

what your metrics are and you have what we call a control piece,

and don’t worry I’ll define all these terms. Once you establish a

control piece, a sales letter or web page that becomes the

standard or the baseline by which every other marketing

promotion is measured against. Now does that make sense to

you?

KM: It makes perfect sense to me, yes.

JM: Okay. I’m going to back up a little bit and I’m going to go back

to 1986. Back in (and this is pre-Internet) but I think

everybody’s going to understand exactly what I’m saying

because many people understand direct mail. So this is actually

a direct mail example. This was really my first exposure to

metrics and I didn’t understand why we even had to calculate

this stuff. I thought you send out a bunch of mail or you send

out a bunch of email and you get some orders and darn it, that’s

all. I used to think, you don’t have to worry about it. You just

keep doing it and you make some money. Back then, I had no

idea tiny, tiny, almost fractional changes in response rates tend

to create massive increases in the amount of dollars you take

home.

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Now before I tell this story, I want to just say back in

school I never did very well in mathematics. In fact, I hated

math because I thought math was for engineers and architects.

I wanted to be an entrepreneur and frankly, I looked at math as

a waste of my time. Certainly nothing like math could ever

make me any money and, you know, in ’86 when I started

working in the direct marketing industry, I came to understand

math and mathematics and the understanding of basic metric

math can make you incredibly rich! We’re not talking about the

engineering kind of math. We’re talking about entrepreneurial

math. And if you’re listening to this tape and you think of

yourself as an entrepreneur or direct marketer, you don’t have

to know advanced trigonometry. I mean, this is not, highly

advanced mathematical theory. This is very simple math that

tells you how you’re doing in your marketing and that’s why it’s

so important.

Well, I started working for a direct response marketing

company selling life insurance to attorneys. What we did was

every month we mailed about 10,000 pieces of direct mail out.

We had a one percent conversion rate. So, in other words, for

each 100 pieces of mail we sent out, we would get one sale and

the average commission on that sale was $700. So, in essence,

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for each 100 pieces of mail we sent, we would receive $700 in

income. Now the mail we sent out, was direct mail again, and it

cost $2.65 a piece to send each piece of mail. And these were

the metrics I was first exposed to and I remember the people in

our department would say, for each $2.65 we spent, we make

$7.00. Or for each $265 we spent, in other words each 100

pieces we send out, we spend $265 we make $700. That was

pretty good and we were pretty proud of these metrics. It was

something the boss was interested in and we were always trying

to beat our control piece. We really couldn’t get beyond that

spending $2.65 to make $7.00.

Then what happened was our mailroom guy decided to

take a three-week vacation and we brought in a temporary

person to work in the mailroom. And this guy accidentally

changed the way the mailing was sent. Beforehand, we were

sending out the mail bulk rate, but anybody who does direct mail

knows that bulk rate is garbage rate or junk rate. But here’s

why we decided to do it; the first class mail cost a dollar extra

per piece. So, the boss figured why should we spend an extra

$10,000 a month just to send something out first class. He

thought it might get there a little bit earlier, but he didn’t really

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think that it would have any major change in the conversion

rate.

Well, this guy, this temporary worker came in and he

mailed out 10,000 pieces; instead of the normal bulk rate, he

sent it out first class mail. The boss was furious! Because he

basically spent $10,000 more than he was supposed to spend to

get this mailing out and this was a very expensive mailing. We

were spending $3.65 per piece to send this mailing out and that

month we spent, $36,500 in mailing costs and he was pretty

pissed. Because we spent an extra $10,000 more than he

thought we should have. And, we all thought this temp was

going to get fired, but something interesting happened.

What happened was, we saw instead of a one percent

conversion rate, we saw a two percent conversion rate just by

making that one change. So our conversion rate went from one

percent to two percent. In other words, it doubled. For each

100 pieces we sent out, we were spending an extra dollar per

piece, right? So we’re spending extra money to get the mail out,

but we’re making an incredible amount of money back. In fact,

the numbers were; we spent an extra $10,000 on mailing, but

brought in (because the conversion rate was so much higher) an

extra $70,000.

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KM: Wow!

JM: It’s worth the money. That’s really important to understand

because it’s the perfect example of the difference between one

percent and two percent. The difference between one percent

and two percent is 100 percent and that’s what you need to

understand. Tiny little changes in conversion rates create

massive increases in the dollar amounts of revenue. In fact, the

boss decided we’re never going to mail bulk rate again and all he

could think of was (he added up in his head) that’s income of

$50,000 extra a year. Well, what else can we send first class?

KM: Wow!

JM: How else can we spend our money? And I’m not saying this

because I want to slam bulk rate postage. I mean, although I

would never use bulk rate postage, you have to test it out. This

test was done totally by accident and it generated an extra

$850,000 of revenue for this agency every year. And this was

totally and completely by accident. We didn’t even know, and no

one wanted to do it. It was completely by mistake and the point

I’m trying to make here is the changes you make, if you track

and you test, can really have a big impact on the money you

make. The only thing you need to know, is that is the reason we

track, we don’t track because we like math and we don’t track

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because we’re anal or we don’t track for any other reason that

an engineer or an accountant or someone would track. We track

because we want to make more money. We don’t track because

we love it. We love to make more money, we love to make

more income. Therefore, we have to track and we don’t really

have a choice.

So that’s my intro to tracking and my introduction into why

we need to test different variables and how those variables and

the outcome of those variables can really impact us in the long

term.

KM: If somebody has something that’s modestly successful, they

should really think about ways of varying their offer and their

presentation because they may be sitting on an untapped gold

mine.

JM: Absolutely! You and I both know people and businesses who

have made little changes and all of the sudden they’ve taken

their business from $100,000 a year to a million a year. Just by

making, I mean, not usually a headline, but something like

changing the pricing structure or changing the offer. And that’s

significant, especially if you’ve got, like us, three or four web

businesses. Different products, different campaigns, different

promotions.

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Corey Rudl, many people have heard of him, is a great

marketer and a good friend and Cory and I were talking a few

years ago. In fact, Ken, I think you were there. He said, “You

know, everybody is looking for the big blockbuster. Everybody’s

looking for the $10 million a year hit.” And he says, “And to me,

that’s great, but hits come and go.” He said, “Give me a whole

bunch of stable promotions I can make money on. Give me 10

promotions that make 100,000 a year and I’ll make my million

that way.” In other words, if you’ve got five or six products,

think of each one as a separate promotion and really go so far as

to think of them as separate web businesses. And I say, well,

this web business makes me $5,000 a month. This one makes

me $3,000 a month and this one makes me $10,000 a month

and this one makes me $7,000 a month. This way, you’re

diversifying your entire product plan. And also the way that you

think about your campaigns, instead of saying, we spend a lot of

money on marketing and we make a lot of money on sales and,

hopefully, we make more than we spend. That doesn’t cut it

anymore.

KM: There is also another intelligence to that and Cory eludes to it,

even a big hit can fade away. Markets change and who knows

what can happen. If you have a lot of smaller projects that add

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up to a lot in aggregate, then if you lose one or two of them, it’s

no big deal. Where as, if you put everything you’ve got into one

deal and that goes bad then you’re in a jam.

JM: Right. In fact, exactly right and having four or five different

promotions means you can say, well, gosh, let’s try to tweak this

one. Let’s try to bring this one from $3,000 a month to $10,000

a month. And sometimes you can’t do it, but sometimes you

can. Or, you can only get it to $5,000. Sometimes you test and

test and test and you can’t even beat $3,000 so you leave it the

same. Which is, the next definition I want to talk about. It’s

called a control piece and I don’t know if people are familiar

with the term control piece so I’m going to give you an idea of

what it is.

After you have tested multiple offers, multiple testing

variables and different headlines, your control piece is the piece

producing the greatest conversion rate. We’ll talk about what a

conversion rate is in a second if you don’t know. It’s the one

that produces the most money, and it’s the one that whenever

you decide to do a test in the future, you will test against. If you

have a promotion and the control piece you’ve tested and tested

generates $3,000 a month, then this is what you’re looking to

beat when you spend money testing other variables, other

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headlines, other prices, other offers, other bonuses, other

guarantees and all that other stuff. What you’re trying to do is

beat $3,000 a month for this particular promotion (or whatever

conversion rate you’ve established).

If you can’t beat it, then you leave it as is. And the only

way you know if you’ve beat it, is to track properly. Okay? So

it’s one of those things I don’t like to do, but I have to do and I

like to know what I’m spending my money on. And I like to

know it is making me some money.

Now, when you define the word metrics, the dictionary

says metrics are a standard of measurement. So when we think

of metrics, just think of measurements. All we’re doing is

measuring the results of different parts of our promotion. Put

simply, it’s just measurements. And there are five different

metrics I like to look at. And we’ll, basically, break these down a

little further, but these are the big ones.

KM: Great.

JM: I’ll let you look at the conversion rates and let me tell you what

the conversion rate is. I’m not going to leave any stone

unturned here. Let me go ahead and define that. The

conversion rate is the percentage of the people who, when

exposed to your offer, buy. So, for example, if you get 1,000

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people to your website and 10 of them buy, it’s a 1 percent

conversion rate. Or, let me make it real simple; if you get 100

people to your website and 1 one of them buys, that is a one

percent conversion rate. It’s the same thing with direct mail and

all we’re talking about is converting prospects into customers.

KM: These numbers are important for another reason. Recently I was

talking with Yanik Silver. One of the keys to his affiliate

marketing success is he knows his numbers and they happen to

be very good numbers. So when he attempts to expand the

universe of people who are promoting his products, he can do it

very readily because he’s done his homework and knows his

numbers and they are attractive numbers. So it’s a ticket for

admission, beyond your own efforts, if you want to get it into

affiliate marketing or JVs.

JM: Yanik speaks with authority when he talks to someone. He says,

look, I don’t know you, Mr. Prospective Affiliate, or what your

conversion rate is going to be. But I do know, when we ran this

offer to 10 other JV partners or 20 other affiliates the conversion

rate was two and a half percent. And I’m not saying it’s going to

be that way for you, but I know darned well if your traffic is like

their traffic, you’re going to get a two and a half percent

conversion rate as well. And to be able to speak with some

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degree of knowledge and authority about what kind of

conversion rate someone’s going to get when they promote your

products is huge. And the reason is, is because there are a lot

of different offers we have to choose to promote and there is a

lot of competition for people who can send you traffic and

affiliates. And you spoke in your System training, about the

affiliate and the magic of the affiliate program. It’s basically free

traffic. You only pay for it after someone has made a sale.

KM: Right.

JM: So, you’re always going to get people to continuously send you

traffic if you can continue to convert that traffic and sales for

them. But just to get someone interested, just to get someone

to send you an initial 500 visitors or 1,000 visitors or to do a

mailing to a segment of their opt-in list - something as simple as

that is going to allow you to be able to speak with authority

about what others are achieving.

Now, the second one is visitor value and visitor value is

in direct proportion to the amount of revenue you make per sale

and your conversion rate. So I’m going to go ahead and use

that example again. We have a $100 product and we have a

one percent conversion rate. For each 100 visitors that come to

the website, they make one sale worth $100. That means 100

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visitors equals $100 of revenue or a visitor is worth $1.00. Does

that make sense?

KM: Yep.

JM: Real important everybody understands that. If your visitor value

is too low, then people simply won’t promote your product. The

visitor value is an even more important metric than conversion

rate because conversion rate is based on the specific offer.

Maybe the pricing is not there.

Here’s the example: If it’s a $5.00 product and it’s a one

percent conversion ratio, the affiliate is only going to be making

5 cents, your visitor value is only 5 cents. If it’s $100 product,

the visitor value is $1.00 and that’s a significant difference

between the two. That’s why you need to understand your

visitor value. When you start talking to sophisticated marketers,

people who control a lot of traffic, they’re only concerned with

one thing. How much money will you get out of each visitor they

send to your website? Now there are three other metrics, they

are simple metrics and you’re probably going to be able to find

them out just by looking at the stats program on your website,

or your hosting account. And I’ll give them to you. They’re not

as important as these others, but they are important.

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One is the length of time someone spends on our page.

Two is the referrers, people who are sending you traffic. Also,

your errors and let me go over why these are important.

First, length of time someone spends on your page. If people

come and they’re only spending 10 seconds, that’s not enough

time to get someone to actually look at your offer and then

decide to make a purchase.

If the length of time a visitor remains on your page is only 10

seconds, let me tell you, there’s something wrong with your

headline. Because whatever headline you presented to the

people did not excite them enough to get them to stick around.

The problem of short visitor value usually has to do with a

problem with your ad copy or your design or load time for the

first page.

The second one is your referrers. Usually you’re going to know

where your referrers are coming from and where traffic is

coming from because you’re going to be able to direct it to a

special page so you can then figure out your conversion rate.

For example if you’re working with a joint venture partner or if

you’re buying ads somewhere, using pay-per-click traffic, you’ll

drive it into a special page. You want to look at your overall

statistics and what you want to do is find out who might be

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sending you traffic that you aren’t aware of. And here’s why,

this is so important.

You’ll find that there are people who send a ton of traffic to

you and you’ve never even heard of them. And the reason is,

for some reason they like you, or they consider you a resource,

or they consider you cool. Now if someone is sending you traffic

without your knowledge, just because they like you imagine

what happens when you pick up the phone and offer to pay them

for it.

KM: Right.

JM: What we found is if you can go to people who are referring you

traffic and say - did you know we have an affiliate program and

you can make money sending us traffic and you’re sending me

traffic already - you’d be surprised what they’ll do. They’ll put

pop-ups and banners and stuff on their site. They’ll mention you

in each issue of their newsletters. They’ll completely devote a

section of their site to you because they like you and you’ve

turned a relationship into a symbiotic relationship.

Now look at the same thing in your general stats for your

error pages. And that’s because there are sometimes people

who link to you incorrectly. Or, here’s another example – maybe

you picked up your domain or maybe in the past you registered

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with a search engine and that search engine page is going to a

page you no longer have on your site. But let’s say it’s a

number one listing in the search engine for some great keyword

or it’s just going to a dead page. Find out where that error page

is going, study your logs and basically, what I call bait and

switch those pages.

If you’ve got a page that ranks high in a search engine for

a particular keyword and it’s just going into either a page not

found or it’s redirecting into another page, like a 404 page or a

page that picks up the dead traffic on your site, take that page

and create a specific link to that page or a forward them to that

page. And if people are searching under the term viral

marketing, for example, and Google has you number one and

that’s going to a dead page, then darn it, phase that page out

with something that’s about viral marketing so you can really

control the user’s experience.

KM: Two comments about that are kind of interesting. Something

Jim Maddox brought up in Cincinnati is he never lets a page die.

He never discontinues a page, he always just takes that traffic

and directs it wherever he chooses, which is really interesting.

JM: Yes, I completely agree. In fact, in the latest issue of our

newsletter, we’ve got an article on how to keep traffic from

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getting hijacked. Right now, for people using Microsoft Explorer,

I think it’s 5.0 or better, if you’ve got a dead page, there’s a

fairly good chance if someone enters that URL directly into the

browser that Microsoft is going to hijack that page and take

them somewhere else. Sometimes to a competitor of yours!

KM: Wow.

JM: And so, leave those pages live. Don’t ever kill a page and if you

do kill a page have one of these scripts. It’s a redirect script on

your site that allows you to capture all the traffic that might be

going to a dead page and just send it somewhere. Even better,

send it into a page that says we couldn’t find your page, tell us

what you’re looking for, and report the dead link. I don’t know,

that’s too much work for the visitors by my standards.

I like to find out what they were looking for and then I’ll

just give it to them. And well, Jim Maddox does as well. He

says, well, let’s figure out where this traffic coming from. Oh,

it’s coming from the Yahoo listing. Well, should we kill the

listing? No! You worked so hard to get these listings in the

search engines, do something with them. Especially if they’re

getting traffic.

There’s really only three things we’re trying to accomplish

with all this marketing stuff and I’m sure you’ve covered them

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and I’m just going to repeat them. We want to convert more …

than the prospects. In other words, we want more of the people

who visit the page to actually read, or to visit the page, to

actually read the page and then opt-in to a … [intelligible]. We

want to convert more of our prospects into customers and we

want to increase the ticket size of how much each customer who

goes through our process spends. So, it’s really a matter of

getting more prospects there, converting more visitors to

customers, and making more money off of each customer. And

that’s kind of a Dan Kennedy thing I picked up a while back.

And it’s absolutely true.

People tend to focus on getting traffic to their website, but

they don’t really focus on what to do once that traffic arrives.

And, you know, it’s so much easier to make more sales with the

same amount of traffic than it is to get more traffic. But I don’t

know why more people don’t focus on that second level. In fact,

there are people who we know who make hundreds and

hundreds of thousands of dollars a year with 100 visitors a day.

KM: That is one of the reasons we had Alex in Cincinnati because he

doesn’t get a lot of traffic. But the traffic he gets, he works

really well and he makes tremendous money from them.

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JM: Now imagine having a lot of traffic and then doing the same

thing as Alex does, working it really hard.

KM: Right.

JM: And monetizing as much as you possibly can. Monetization or

monetizing means making more money from the same activity.

So when we talk about monetizing our traffic, we’ve got traffic

coming to our website, the monetization is the offer that we put

up there that gets people to give us money.

KM: A couple of weeks ago, you said this and maybe you could clarify

it and expand on it. That if you developed a process for

converting, let’s say, people who are interested in tennis online

into money, and you’ve done a better job of converting tennis

traffic than anybody else on the Internet, you can leverage your

conversion process to own all of the Internet traffic for tennis.

Could you talk about that a little bit?

JM: Yes. If people have heard the Anatomy of An Internet Marketing

Rollout tape or are familiar with the rollout process and I’ll go

through the basics in a second. Basically, there are people (and

you can find them on the Internet very simply) who control

traffic and let me give you an example. We’ll take tennis. Take

the word tennis and enter in to any search engine and what will

happen is, you are going to have people who are number 1 and

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number 2 and number 3 and number 4 and number 5. And it

does not matter who they are, you know, there are a lot of

people out there who would say, well, I want to be number 1 for

tennis and I’m going to fight for that spot. Maybe they’ll get it

and maybe they won’t. Maybe they’ll get it and then a week

later, they’ll be out of the search engine.

You are looking for incredibly unreliable way to tap into

traffic sources by simply saying, “I want to be number 1 in the

search engines.” That’s because you don’t own the search

engines and neither do I. And the search engines are allowed to

do whatever they want. The fact remains no matter what day or

year or what time it is, if you go to a search engine and you

enter in the word tennis, there will be somebody who is number

1. There will be somebody who is number 2. There will be a

group of people who get a majority of the traffic from that

search engine based on the keyword tennis. Now some of those

people might be very good marketers. Some of those people

might have phenomenal offers, but the problem is, is most of

them don’t. Most of them are really bad marketers and, in fact,

we’ll take the tennis example. A guy selling tennis rackets might

be able to make a dollar per visitor. A guy selling tennis balls

might be able to make 50 cents per visitor. A guy selling a

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tennis video might be able to make a buck and a half per visitor.

A guy selling a tennis lesson through a particular pro shop or

something might make five bucks. A guy who sells a tennis

camp might make $3.00. All these people are basically taking

the same traffic, which is tennis traffic and they’re putting it into

their offer and then it’s almost a self-selective process. Where

the customer, if they want a tennis racket, they’re going to click

on the tennis racket guy. If they want this tennis camp, they’ll

click on the tennis camp guy.

The key is, the person who makes the most amount of

money off of that traffic has an opportunity to go to everybody

else and say, you know, I’m sure you’re doing well with your

tennis racket or selling your tennis balls or selling your tennis

products. But I want to know what your visitor value is. My

visitors, for people who come to my site, we get almost $5.00

per visitor. And what will happen is, the guy who’s selling tennis

balls is making 50 cents and he knows that he can give the

traffic to you and you’ll make $5.00 off of it, there’s a significant

difference between what he can make and what you can make.

And since marketing really works best for the people who work

the hardest and really understand how to track and test, this

guy, might pay for the traffic, you know. He might keep his

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listing in the search engine and he might have the traffic come

to him. And he’ll pitch someone on a tennis ball, but the minute

they leave his site, if he’s smart and if you have an affiliate

program, he’ll send you the traffic by a pop-up, by an exit pop-

up. Or, he’ll mail to his list to try to get them to buy your

product.

So what happens is, if you’re the best at converting traffic,

if you have the highest visitor value for a particular keyword, all

the other people in your space will basically give you their traffic.

They will put a banner on their site or put a pop-up on their site

or put a picture in their email newsletter or do whatever they

have to, to tap into your monetization. And what happens is, we

have a guy who sells a book on, Stopping Your Divorce. And it

really came to me when I started this … he’s got, for a particular

keyword he pays $1.50 per click.

KM: Wow.

JM: And I said, how can you possibly pay $1.50? He said, it’s easy, I

make three bucks. And I said, well, what about all these other

people who get a ton of traffic and they only make like 20 cents

or 30 cents per visitor? And he said, well gosh, I bet I could go

to them and get them to give me their traffic. Because they

25

know that I’ll make more money with their traffic than they ever

would and that’s the thing to do.

KM: And he’ll make more money for them.

JM: He’ll make more money for them.

KM: Yeah.

JM: When we talk about this, remember someone is not going to just

give you their traffic. They’re going to give it to you with the

expectation you’re going to sell the heck out of this person then

split the money with them.

KM: Yeah.

JM: And that’s really where this monetization comes from. In fact, if

you are the very best at monetizing a particular type of traffic,

whether it’s divorce traffic or tennis traffic or whatever. You’ll

find people come to you and say they see you’re offers all over

the place and how did you get everybody to run that pop-up on

your website. The answer is, I didn’t tell them to do it, I just

gave them an opportunity to join my affiliate program and they

found my pop-up makes more money than anything else they’ve

ever put up.

We have a guy with a pop-up for one of our courses on his

site and people said, how did you get him to do that? I said, I

didn’t get him to do anything. I didn’t even know he did it. And,

26

if I asked him, he wouldn’t take it down because he makes

money when he has it up there. So he leaves it up, he makes

money and the more he leaves it up there, the more money he

makes. And it’s a real symbiotic relationship. I think about him

when I send him a check every month and that’s really the idea

of getting the maximum of money out of each promotion,

campaign or website you’re working with.

KM: So you can link to those kinds of opportunities.

JM: Yes, absolutely.

KM: One of the things we stressed in Cincinnati was to become

marketing or market-centric as opposed to product-centric. And

I think for people who heard that message in Cincinnati, if you

now listen to what Jonathan is saying, you can see the potential

here. Because let’s say you fall in love with a product and you

find a market, you try to force this product on the market and

you have some success. Okay, that’s great. But if you’re

market-centric, you’re not going to be tied or married to any

particular product. What you really are tied to is the concept of

getting maximum return from any particular market.

JM: Yeah.

KM: You can see from what Jonathan said, if you focus on market,

the rewards are infinitely better. I mean, imagine literally

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owning all the traffic in your category. And these metrics are

that Jonathan is talking about is the railroad to get there. I

mean, it’s a way to literally leap frog over everybody else and

here’s the key. You’ll only get there if you know the destination

exists.

JM: Right.

KM: Jonathan, you can see more people than I do probably. I mean,

is it 1 out of 100, 1 out of 1,000 people that even think this way.

… [unintelligible]

JM: It’s probably 1 out of 1,000.

KM: Yeah.

JM: But look, Ken, the best part is you don’t beg, borrow and steal

from the traffic. I just want to make that abundantly clear.

KM: Right.

JM: You do not hustle for this traffic.

KM: You don’t beg because you don’t have to.

JM: It comes to you. What happens is, the best example everyone

would knows is X10 camera. Now most of those pop-ups, at the

beginning they were buying media and I think, I’m not sure what

they’re doing now, but I believe now it’s all on a revenue share

basis. Well, X10 camera doesn’t go to CNN and say, we want to

buy all of your pop-ups. It’s really obvious to CNN what pop-ups

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people are reading. They go to MSN and they go to Yahoo and

they go to Space.com and they keep seeing this X10 camera

pop-up, someone calls X10 and says, hey, why don’t you pop it

up on our site? And X10 says, why don’t you join our affiliate

program? And then CNN joins the affiliate program and puts the

pop-up up there and if that pop-up makes more than their

calling card pop-up or more than another kind of pop-up, then

CNN leaves that pop-up up there. And, at that point, everybody

thinks gosh, how do I get X10 camera to advertise on my site?

Well, you don’t. You just join their affiliate program and what

happens is, as always, Ken, the cream rises to the top.

Now, I want to get into the actual metrics so we

understand what we’re going to be tracking here. And then I’ll

talk about some of tools we’re going to use.

KM: Great.

JM: I’m asked all the time, is my conversion rate good? I’ll get a two

percent conversion rate, I get a one percent conversion rate, is

this good? I don’t know. And it doesn’t even matter. Keep in

mind what your metrics are, is a lot less important than how

they change when you modify part of your campaign. Really

important.

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I get so tired of people who want to compare themselves

to other sites. You can’t compare because your pricing is

different, your offers are different, your guarantees are different,

your page is different, your copy is different. Your USP is

different. Why do you want to compare yourself with someone

like that? Why don’t you just say, I’m profitable. That’s the real

thing, are you profitable. If you’re profitable, at that point, you

can start saying, how do we become more profitable. And then

if you focus on your site, if you focus on your particular

increases and conversions and you keep focusing on it and you

don’t worry about other people, you’ll start to beat them

naturally just because you’re spending with something that’s

actually going to make you money.

Let’s say you sell a $20 ebook about dog training, okay?

Very simple, you get 1,000 people a day and you have a one

percent conversion rate. If you increase your conversion rate, if

you get your conversion rate up, what starts to happen is, we’ll

look at conversion rate … dividing with the amount of money you

make per day. You have one percent conversion, your visitor

value is 20 cents. In other words, for each person that visits

your website for that particular promotion, you made 20 cents.

You have 1,000 visitors a day, you make $200 a day. You bring

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it up to two percent, your visitor value goes to 40 and your

income per day goes to $400. You bring it all the way up to 5

percent and that’s a pretty significant jump, but let’s just see

what happens if you can bring your conversion rate from 1 to 5

percent.

You’d actually go to a visitor value of $1.00 and your

income per day would be $1,000. So the difference between the

tiny little changes in your conversion rate is like 3, 4 percent

mean that your site is making 50, 60 grand a year versus 360

grand a year. It’s basically going to turn a promotion into a

business. And at that point you can hire someone to run that

business for you and then God only knows all the other things

that you could do. So it’s really important to keep your metrics

in your head. At least know what your control piece and what

your conversion rate is because you’re always going to be

testing new stuff all the time.

And frankly the most important thing with your metrics, is

to try to increase your conversion rate. Because it’s a lot easier

to double your conversion rate than it is to double traffic. In

some cases, there’s only a limited amount of traffic out there.

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KM: And as we’ve heard you earlier, if you do succeed in developing

a tremendous conversion process, then you’ll be able to get all

the traffic you want for a particular category.

JM: Right, exactly.

KM: Whereas, trying to acquire traffic when you don’t have a good

conversion process is an exercise in futility. You know, you’re

buying all this traffic but it’s not converting.

JM: You’re just paying for it.

KM: Yeah.

JM: If your conversion rate sucks, you’re paying for it. If your

conversion rate’s great, they’re begging you to take it.

KM: One of the things we did in Cincinnati is to make really clear this

is a two-handed business. On the one hand, you’re traffic

conscious. You want to find new sources of traffic and be an

expert on traffic generation. But on the other hand, you also

want to be an expert on conversion and those two things work

together.

JM: Right. Look, the better you are at conversion, the easier it is to

buy traffic.

KM: Right.

JM: In fact, we’re at the point now and I bet anybody who’s got a

successful affiliate program probably gets, 10 or 15 joint venture

32

requests a week. And we just say, well look, you don’t need to

talk to us. Just join our affiliate program and what happens is,

certain people who have the kind of traffic that works with our

kind of offer will kick butt. Other people will suck and they’ll try

to match their traffic with the affiliate offer that’s right for them.

Take our traffic, our keyword would probably be something

like Webmaster tools or something along those lines. Or,

Internet business site or something similar and take that kind of

traffic, business owners with websites or webmasters and you

put our offer in it, it will scream. If you take that kind of traffic

and put it up against the X10 camera offer, you’re not going to

make as much money because it’s a general interest offer to a

highly targeted specific list.

Okay, now let’s talk about tracking tools you are going to

need. This is pretty simple, but I don’t want to confuse people, I

want to keep all this stuff separate. If you’ve got a website host,

you’re going to have some sort of statistical program with that

account. If you don’t, change hosts. You should have

something. And some of the common ones are Hit Monitor,

LiveStats, WebTrends, MK stamps, these are all stats programs

that ISPs can get pretty much for free. They have kind of a

freebie version that they give to all their users. The reason

33

these companies allow that to happen is because they want you

to upgrade to their full-blown stats program, which you

probably, in most cases, should not do. I’m going to tell you

about some free tracking programs so you don’t have to even

pay to get this stuff loaded into your system.

These programs are ISP based and are good for tracking

the basic metrics, the errors, the referrers, and the average stat

on the page. But most of them, with very few exceptions, most

of them are not appropriate for actually tracking conversion

rates. To track conversion rate, we need to track a specific page

over a specific period of time. For example, if I change my

headline tonight on one of our offers, then I need to be able to

track the conversion rate for the page I changed the headline

on, from that point forward. A lot of these programs will only

track by the month or the week, but it’s good to get your overall

stats. It’s good to find out where your errors are, but I would

not mess around with this stuff and try to make it work for

something specific like tracking a specific page on a specific

time.

KM: So are you going to recommend things for us to use?

JM: I’ve got two sites and there’s probably a dozen more, but these

are the two we use. We use a program called WebTrends Live

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and we use the free personal edition of WebTrends Live. When

you go to the WebTrendsLive.com page, the lower left-hand

corner there’s a tiny little button that says personal edition.

Click on the personal edition, you can sign up for free.

It will track, if you put that little counter (the little bit of

code you put on your page) it will track a specific page. It will

tell you here’s the page and you can go by date, you can say I

want today’s stats or tomorrow’s stats or this week’s stats. You

can actually pick the period of time and the page you want to

track. Another one is called HitBox.com. It’s totally free, you

have to put their little icon at the bottom of the page, but it’s not

a big deal. It’s not going to be distracting to the users. Really

the key is the little icon at the bottom tracks who’s visiting the

page and when they’re visiting. And by adding this to your

page, you can say well, I’ve got this special page or it’s my

homepage and I’m driving traffic into it from search engines and

I’m getting a one percent conversion rate. I put this little

counter at the bottom of the page and I can actually track what

my conversion rate is, it’s one percent.

If I change the headline and I only get one sale for 200

visitors, then I’ll know my conversion rate went down and I want

to immediately go back to the old headline. If I change the price

35

and I start getting 2 visitors per 100, then I can immediately go

back and try to change all the prices. So really the idea is to

track specific page for specific period of time. And once you

have it, you’ve got traffic sources coming in, then you can track

all sorts of stuff, and we’ll talk about what’s most important to

track. I know you had talked about that in the last Coaching

Club call. And, Ken, you made some really great comments, I

want to cover in a second.

The second way we like to track, let’s say you’ve got a

search engine promotion and you’ve got a joint venture. We’re

going to assume you don’t have an affiliate program. You’ve got

one joint venture with a friend and you’ve got search engine

traffic. You’re going to want to set up two separate pages, each

with one of those little counters on it. And you basically set up

one for example as Index 1.html, the other one as Index 2.html.

It’s real easy, you set up a separate page, you put the counter

on there and, at that point, you see what happens once you

have different traffic sources going at a specific offer.

This is important and I think people sometimes lose sight

of this. Pay-per-click traffic and search engine traffic is going to

be very different from pop-up traffic, which is going to be very

36

different from email-driven traffic. Which is going to be very

different from banner-driven traffic.

KM: It will be respond differently.

JM: Absolutely. Probably the very best traffic you can bring into a

website is search engine traffic. And that’s because when people

search for something, it’s a proactive approach to looking for

something on the Internet. It’s like the Yellow Pages. You don’t

look for a plumber because you might need a plumber some day.

KM: Right.

JM: You look for a plumber when the sink is overflowing and you’ve

got to have a plumber right now. So, search engines are the

ultimate qualifier of what is on a prospect’s mind, immediately

right now. So, that’s why search engine traffic or pay-per-click

traffic is going to be the most responsive.

Email traffic, on the other hand, if someone does an

emailing, this is more like endorsed traffic. You might get fewer

people coming, but it might have a higher conversion ratio. On

the other hand, you’ve got pop-up traffic. Someone might put a

pop-up on their website and the pop-up is closed 9 out of 10

times because people don’t like pop-ups. We use our affiliate

program for tracking, which I’ll get into in a second. But we

have different source codes for each traffic source.

37

We have one we use for pop-ups and our conversion rate

on that is something like two-tenths of one percent for pop-up

traffic. For our email-driven traffic, we get about two percent

and for our click-through traffic on pay-per-click search engines,

we get about four and a half percent conversion. So, each of

these traffic sources is going to yield different types of sales for

you. That’s really the thing to remember. Now, what we do is

we have an affiliate program and we’ll use one of our affiliate

numbers for a specific kind of traffic. For example, one of our

affiliate numbers (remember we just signed up for our own

affiliate program) is for our Overture traffic. And another one is

for our side web traffic. And another one is for some pop-up

traffic.

These are offers we’ll buy some media for or we’ll do a

joint venture with somebody. We want to see what kind of

conversion rate we get from this traffic. Now, when we start to

really get into this stuff, you’ll find you don’t have to get

complicated. Over time, it simplifies itself because you realize,

certain things work and which don’t work. These two things

work, so it’s a matter of driving these two kinds of traffic into a

page and then testing to see what the conversion rate is. It

makes it ultra, ultra simple.

38

Or, you might find something like this. You might be

paying 10 or 20 or 30 cents per click from Overture traffic, and

maybe it’s profitable. On the other hand, your pop-up traffic

only brings in two-tenths of one percent. It brings in one-tenth

of the traffic, but it maybe does it at 1/20th of the cost. And so,

all these little tests are always in an effort to find out what’s the

best offer, what’s the best traffic. What’s your best offer, what’s

the best traffic.

KM: So, if I could jump in. One of the ways you’re tracking is you’re

using (if you have an affiliate system) you’re not only using your

affiliate system to track your affiliate sales activity, you’re also

assigning an affiliate code to each traffic source to simplify the

process of tracking how lucrative a particular method is. For

instance, pay-per-click or email.

JM: Yes, sir. And, here’s where we got it, back to Cory Rudl. I can’t

thank that guy enough for telling me stuff.

KM: Yeah.

JM: I noticed a few years ago his affiliates were everywhere. I said,

gosh, Cory, your affiliates are all over the place. He laughed and

said, well, you know who our biggest affiliate is? And I said,

who? He said, ourselves. And I said, what do you mean? He

said, well, whenever we buy banners and whenever we do a

39

test, whenever we buy media, whenever we have some sort of

paid testing program we’re doing, we run it through our affiliate

program. So it looks like lots of hits, but, in fact, we don’t have

to pay a commission to ourselves so we’re keeping all the

money. And I said, why do you use your affiliate program? He

says, because it’s the best way to track!

KM: Yeah. For example, if you were to go out and try to acquire an

ad tracking software program, it would be, ten times as much

and wouldn’t be as good as what you can get off the shelf as an

affiliate tracking program.

JM: If you’ve got an affiliate program. Now there are software

programs out there like AdMinder or ROIbot and to do highly

advanced tracking, you might want to use one of those software

programs. Especially if you don’t have an affiliate program

because you can have multiple pages and you can basically run

it all on the same order form and just have some multiple

headlines. But it can get a little bit confusing for people and

there’s a better option.

Right now, we’re working with a guy who’s just developed

a split run testing script. This is a little script you install on your

website and it’s got all the tracking built in. It will take every

other or every third or every fourth visitor and it’ll put them into

40

a page that looks different. So you can actually use one of these

scripts to test five different headlines or nine different. Now,

you weren’t at the Hawaii seminar we had last year, but Marlon

Sanders was using this. And it was so funny because I was on

the phone with Marlon, from Hawaii and I said, I notice you’ve

got a couple of different pages. And he said, keep hitting your

refresh button. So when we went back into the seminar, for the

heck of it, I brought up his web page and we kept hitting reload

and we had nine different versions of the website. Some were

highly sophisticated and some were the same, but they had

different headlines. Some were at a different price and some

were written in a down home folksy voice, he had so many

different styles and he just wanted to test everything.

KM: And he was price testing too?

JM: Only testing $67 versus $69.

KM: So he was cycling them through and testing them all at once.

So visitor 1 would see ad 1, visitor 2 would see ad 2 and then it

would just rotate. Right?

JM: Right. And these scripts are available, you can get them on the

Internet. You can get them for a couple of hundred bucks. In

fact, we have a guy who’s selling one for two or three hundred

dollars, one of our clients. If you wanted it installed, it’s maybe

41

five hundred dollars. But it’s got a big interface and it’s pretty

easy to use and the question you’ve got to ask yourself is, do

you even have an offer that’s converting right now. And you

always start - as we talk about in the Roll Out tape - you always

start with pay-per-click. Because that’s going to be your most

responsive traffic. And if you can’t make your offer work with

pay-per-click, just drop it.

You know, or keep testing. Keep trying different versions

of the letter. Once you make it work with pay-per-click search

engines, it’s easy. At that point, you say, okay I’ve got a

conversion rate or I’ve got a visitor value. It’s always easier to

bring a visitor value up from 20 cents to 50 cents than it is from

zero to 20 cents.

KM: That brings up an interesting point. We recommend pay-per-

click first, not only because it’s fast and easy, but because it is

generally the highest yield traffic. It’s a principle of direct

marketing you always want to market to and target the most

responsive lists possible first. The reason is very simple. If

those folks aren’t going to buy, there’s no point in testing on the

large universe of people in your market.

JM: Right.

KM: That can save you a ton of time.

42

JM: You could test all the pay-per-click stuff and then once it hits,

once you have a conversion rate, then you can relax. And say

we have an offer. As we say in our office, we have metrics,

folks!

You know, we’ve achieved the lift off. And once it

happens, it’s like okay, at least I have a visitor value. Maybe it

was Gary Halbert or Dan Kennedy who said, people call me all

the time and they say they want to sell a million products and I

ask them if they’ve even sold one and they say no. And I say,

well before you even sell a million you’ve got to sell one.

KM: It sounds trite, but it’s really what it’s all about.

JM: Yeah, sell your first one. Sell your second one. We’ve got a

promotion we’re working on right now and we started out with

about a twentieth of a percent or a tenth of a percent conversion

rate. It was so incredibly low and we are on the twelfth version

of the sales letter and we finally got the conversion rate to about

1.6, 1.7 percent. It’s finally high enough we can go out to our

affiliates and say, try this offer out, we’ve tested it. But if I

hadn’t done that testing on the pay-per-clicks first and I said to

the affiliates, run this offer to your list, they would run it, they

wouldn’t make any sales and they’d be pissed.

43

But instead, I can say with authority, we’ve tested this out,

it achieved this amount of conversion rate, so run it through

your list or put this pop-up or put this banner up. And yes, you

should see something similar.

Now, there’s 11 things we track and let me go over those.

They’re different for different campaigns. For email, we have

four. For banners, pop-ups, and web ads we have four and then

we have those general ones we talked about before. So let me

go over these quickly because I know we’re going to run out of

time soon.

When we do email promotions, we like to track how many

pieces we send. So, for example, we have a list of 10,000

people. We send 10,000 people an offer and then track, due to

the open rate or we’ll call it the click-through rate - almost all of

our offers, almost all of the email promotions we do use a two-

step method. We’ve never put a big giant huge sales letter in an

email because first of all, it’s rude. Second, it could get caught

in a Spam filter. Furthermore, it takes a long time to send. I’d

rather send a short little teaser that says, Ken, I’ve got a great

offer for you, check it out by clicking here. Then I can track the

visitors to that URL.

44

So many people say well, I get this conversion or I get

that conversion or this happened or that happened and they’re

not really tracking what happens within the process we call the

user experience. I send 10,000 pieces and I only get 2,000

people who visit the page, that means I really only get a 20

percent click-through.

Now, that’s not good, that’s not bad. There’s no emotion

attached to it at all. It’s simply a fact. I send 10,000 people an

email, 2,000 of them actually visit the site. That means I get a

20 percent click-through. It needs to be noted and that’s all that

has to happen for this process to work. You note it and then, if

you want to increase the overall conversion rate, you try to

come up with a teaser ad that gets more than 20 percent of the

people to click-through. You’ve got a second conversion rate on

this. You’ve got 20 percent of the people click-through, then

you’ve got a secondary click-through and we use a separate

order form page and I learned this trick from Alex Mandossian.

And, you’ve got your click-through from the sales letter to

the order form. Then you’ve got your conversion rate from the

order form to the sale. What happens is, you can say I sent out

10,000 pieces and 2,000 people actually visited the site. 200

went to the order form and then 20 bought. So you follow it

45

through; you had 20 percent click-through to the sales letter.

You had 10 percent click-through to the order form and you had

10 percent click-through to actually make a purchase. If you

don’t track it, you send out 10,000 pieces and you make those

sales and you think, God, that offer didn’t work. But if you track

it bit by bit like this, let’s say you send out your 10,000 pieces

and nobody clicks through to the sales letter page. Well, the

problem is if you’re sending 10,000 pieces out and nobody clicks

through, you probably have the wrong URL on your teaser ad.

There’s probably something wrong with your site. There’s

probably some technical or mechanical problem you need to fix.

So when you break it down and say, this many clicked through

and this many got to the order form and this many bought, you

can find out where in the user experience the problem occurred.

Ten thousand people get the thing, but nobody clicks through,

man, you’ve got a bad link there. If that’s the case, and this has

happened to us, if you use this two-step process and nobody

clicks through, you go back and you look at your link and it’s like

oh no, I used the wrong page on the link. You can even go back

into your website host and fix that page or make a special page

for it. We just gave one of our affiliates a link and they made a

46

typo in the link and they are a big affiliate. They mailed 150,000

pieces of mail.

KM: Wow.

JM: And there were no click throughs halfway through the day. They

were basically getting our error page because they were going

into a page that didn’t exist. Well, I immediately went into the

web host and created a page that matched the page that they

were sending them to, which was the wrong page, and then I

redirected it to the affiliate code. And the fact is, all of a

sudden, we could tell where and what the problem was. We

fixed it and then we could continue on with the tracker.

If, in fact, we have 10,000 people we sent and 2,000 go to

the order form and this is a fairly significant tested offer and

nobody buys, guess what, there’s probably a problem with the

order form. Go in and do a test on your order form. It’s

amazing how often mechanical or technical difficulties screws

people up. And another reason to track all this stuff is because

then you can tell where your technology issues are or the other

problems. And Ken, you know, it’s happened to all of us.

KM: Yeah, it’s part of the business.

JM: It’s part of the business.

KM: Yeah.

47

JM: It’s like sending a piece of mail without enough postage. It’s like

sending out direct mail and it has postage due to people.

KM: Well, actually we have something similar in direct mail, which is

third class that never gets delivered at all. That’s actually quite

common. And that may be one of the reasons, going back to

your original story, why the insurance company experienced

such a boost when they went first class. Maybe that was the

first time ever every single piece was delivered.

JM: Right, I don’t want to be an advocate for first class mail. It

could happen the other way where the conversion rate went

down, but the cost went down and the overall dollars we made

went up. It just so happened that mailing first class had a huge

massive impact on the amount of dollars that we made.

Now, let’s take the same promotion and then if there’s

time, I’ll take some questions. With banners, pop-ups and web

ads, again, you have your total impressions, you have your click-

through to the page. You have your click-through to the order

form and then you have your purchase. Does that make sense?

So, you’re buying a million pop-ups and you’re buying them for

$7,000. You’re buying them for $7.00 CPM or $7.00 per

thousand, 7 cents each. You buy a million pop-ups; if you’re not

getting any click-throughs then they’re probably pulling up the

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wrong pop-up page. I mean, you bought a million of them, you

should show a million visitors on your stats.

If, in fact, you’ve got a million visitors and nobody is

clicking through to the order form, better check that order form.

If that order form is working and every bit of your mechanical

process is working, then you go back and you can change your

creative. The whole idea is to figure out what happens when we

do this. And then I’m going to spend one second talking about

the things you want to test.

Look, test only one thing at a time. We have our Amazing

pop-ups offer and recently, we changed the bonuses. A day

after we changed, and the conversion rate skyrocketed because

here were killer outrageous bonuses. A day after that we

changed the headline. Now, in my opinion, we did not wait long

enough to change the headline before we had given that test a

fair shake.

What happened was the conversion rate went up almost

100 percent when we made these two changes. Now, I wish I

had the scientific evidence and I could say, gosh, Ken, the

headline did this and the bonuses did this. I don’t know, I never

tracked when I raised it so I’m reluctant to go back because of

the amount of money that we’re making it’s so much more

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significant than it was before. But if I had done it smart and I’m

fallible like all of us and in this case the fallibility is making me

money so it’s not a big problem. If I had been smart, I would

have given at least 1,000 unique visitors the opportunity to see

the new version before I had made it, before I had an indication

of whether or not this increased the conversion.

KM: Is there a correct number of visitors you like to sample?

JM: Yeah, I like to do 500 to 1,000 unique visitors, which you might

have to pay some money on a pay-per-click search engine. But

just do it, get those people in there and you can see. We have a

client and he’s got 250 visitors from pay-per-click and he’s

bidding a penny. An insignificant amount and he says, it’s not

working! So I said, no, you don’t know if it’s working until

you’ve got 1,000 people. You get 400 percent more people on

the page and then you’ll see whether or not your metrics

actually work.

KM: One of the reasons these things Jonathan has told you about are

so important is I’m afraid a lot of people are actually right on the

verge of a major success with their visitors. But because they

didn’t know how to run the metrics, how to run a proper test,

and what constitutes a test and how to track, they didn’t know

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how close they were to something that would have paid off for

them.

JM: These people have already spent four or five thousand dollars on

their promotion. And now, they’re willing to drop it. I said, you

can’t drop it until you test, why don’t you test different ads.

First, get some more visitors in there and then test the ad copy.

Oh, we don’t want to change the copy. Why not? The reason is,

they love what their product and their copy is all about their

product and it’s got the guy’s picture on it and it’s got the guy’s

bio on it. And, you know, back to I’m in love with the product

not I’m in love with the profit.

KM: Exactly.

JM: Products are not it. Now, Ken, you probably have a couple of

things to add. But the most important elements we found to

test, the elements that have the biggest difference, are

headlines, price, ad copy and offer, bonuses. Then, not quite as

important, the color scheme and design of the page. I’ll tell you,

there’s one element I actually left out here that just struck.

We’re assuming your page is fast loading. When I moved to

Hawaii, I had to go from high speed Internet to dial-up. Let me

tell you, it made me think long and hard about how long pages

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take to load. Broadband is becoming more widely accessible and

something like 30 percent of the people may be using it today.

KM: Wow.

JM: So, if you’ve got a slow loading web page, you are screwed.

We’ve seen conversion rates go up 100 percent just by cutting

the load time from 20 seconds to 10!

KM: Oh, imagine that.

JM: Yeah, it’s crazy.

KM: Imagine if you had everything right and because you have a

graphics intensive homepage that hasn’t been optimized for

speed, you’re not making money.

JM: Yeah.

KM: All you have to do is speed up that homepage. Incredible.

JM: We learned that from Bill Blitz and the way he designs these

pages is so important. You figure it out or just for the heck of it,

if you’ve got Broadband, pull out your Ethernet cable and plug in

your phone and dial-up through a local dial-up and take a look at

your pages and you’ll experience what it is like for 98 percent of

all the people in England or 70 percent of the people in the U.S.

KM: Wow, very important. Some things just occurred to me and

then we’ll start to wrap this up.

JM: Sure.

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KM: The things that Jonathan is describing are mind-boggling,

especially if you have come from a traditional direct marketing

background. Because there are opportunities you can leverage

on the Internet you simply can’t do with other media at any

price. For example, because of Overture, we can get instant

traffic. I mean, virtually instant traffic for any offer. It doesn’t

exist in other medias. You’ve usually got to wait for the

newspaper, the magazine to come out or you’ve got to deal with

the media person and buy TV or radio space. And the idea that

you can just punch a few things into a computer and hit the send

and get a stream of qualified visitors for any given offer virtually

overnight is unprecedented.

The other thing is, if you noticed, the Internet allows you

to do a lot of testing really fast. I mean, in the old days you’d

run an ad in January, count your receipts and then you’d run a

different ad in February and then a different one in March maybe

and you’d have to wait. You’d have to wait a significant amount

of time. Which I’m pointing out, is if you’ve got enough traffic

coming through, each new 1,000 people can be a new test. So if

you’ve got 10,000 visitors coming through you can inconceivably

test 10 different nature items in as long as it takes to get 10,000

people through.

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Also mind-boggling, notice how he spent a lot of time

talking about the sales process or what he was calling the ‘user

experience’ and that we can actually track the user experience

point by point. You know, did they go from the initial email to

the homepage. Did they go from the homepage to the order

form. Did they go from the order form to press order button.

And you can actually diagnose very rapidly where your sales

process is broken and fix it just as rapidly. We don’t have this in

direct mail. We don’t know why, we really don’t know when we

send out a mailing, we don’t know where people dropped out.

We don’t know whether our headline was bad or whether our

order form wasn’t clear or whether the bonuses weren’t

compelling. But the Internet lets you kind of x-ray right into

that process, which is magnificent.

Another thing Jonathan pointed out, which I never really

thought of before, is that the affiliate programs allow you to

prescreen, in an automatic way, potential JV partners. In other

words, Jonathan doesn’t have to respond to 10 million inquiries

about, hey Jon, do you want to do this JV, want to do that JV.

Actually all you have to do is say, hey look, sign up as an

affiliate and we’ll talk.

JM: Right.

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KM: Right. You just sit back and you know who the winners are and

then you contact them.

JM: And, you know what’s funny is, we use the Synergx system,

which is developed by Paul Galloway, which has got some great

new features to it. Including the ability to see who’s sending

you the most amount of traffic, who’s got the highest conversion

rate, who’s got the lowest conversion rate.

KM: Wow.

JM: Who’s got the highest value per visitor and it is unbelievable and

we picked up the phone last month and talked to our number

one affiliate and I said, hey, I just want to congratulate you.

You’re our number affiliate this month. He says, really? And I

said, yeah, it’s unbelievable and your conversion rate is

outrageous and here’s some suggestions and things you can do

to actually improve that.

Stay in touch with your biggest affiliates, that’s your goose

that lays the golden egg, the affiliates who love you because

they’re sending you traffic because you send them money.

Knowing who those people are and not having to guess is

important. I remember doing a direct mailing a few years ago, it

was back in ’96. The guy says, well, I think our your offer’s

going to work with our list. Or, I think this is going to happen or

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I assume this is going to happen and it was all, you know,

conjecture. I mean, it was all speculation. There was no reality

to it at all. Now it turns out that we did a couple of tests, one

turned out very well, one turned out not so well, but then we

had to spend money, we had to take time. On the Internet, you

put it out there, you see who’s number one, the cream rises to

the top. It always happens.

KM: Wow, and it’s totally transparent. And the last thing that I want

to say and then we’ll end the formal part of this, is if you’re

market centric, the game becomes a lot more interesting. And

your odds of success go way, way up because instead of being

product centric, trying to ram a particular product down the

market’s throat, you’re actually getting more savvy about

converting a particular type of traffic to its highest possible

economic return and here’s the payoff. Once you do that, you

can go out and capture virtually all the traffic in that market and

all that marketplace.

I noticed a number of you have never had the opportunity

to be exposed to Jonathan before. I think you probably gain the

idea of why I listed him as the absolute number one resource

guy in Cincinnati. This is just the tip of the iceberg of the

information he has to offer. I can’t imagine being in the Internet

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business without getting the Online Marketing Letter, which, is at

marketingletter.com?

JM: It’s at marketingletter.com.

KM: Yeah, marketingletter.com. I mean, this thing has, four or five

or six articles like this every issue with material of this order in

it. And it’s either reviewing something really foundational like

we did today. Or, he’s revealing something that is absolutely

brand new you probably wouldn’t hear about for the next six

months to a year and he’s got it first versus this stuff about

defeating Microsoft’s attempts to capture your users. And he’s

got an article on that and I’ll tell you it is the cutting edge of the

cutting edge of the cutting edge. You can get it from him.

So, I’ll just repeat what I said in Cincinnati. My strongest

possible recommendation for people who are excited by this

journal and see the potential in it, is if you want to stay in the

loop with somebody who’s really on it and on it consistently,

marketingletter.com, I mean, it’s a bargain. I mean, I usually

have paid for my whole subscription by the time I’ve read the

first article of the first issue.

JM: Well Ken, I’ve put a special offer together if I can mention it.

I stopped here

KM: Yeah, go ahead.

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JM: Well, here’s what I decided to do because I didn’t know who was

on this call and there’s maybe some … or customers and maybe

there aren’t. I’ve got our three main products, which are the

amazing pop-ups course, it’s how to make pop-ups and we

recently expanded that. I went ahead and I brought the rights

to all the pop-up courses on the Internet [laughs], just to piss

everybody off. And so, if you pick up the amazing pop-ups

course, you actually get four pop-up course, at this point. So I

put that together, the amazing pop-ups course, the marketing

rollout tape that we talked to earlier and the newsletter. It’s 97

bucks a year, the whole package is 97 bucks. If you’re an

existing customer, I’ll just extend your subscription. If you’re

not, you can just so to cyberwave, c-y-b-e-r-w-a-v-e.com/cyber,

c-y-b-e-r, tried to make it real easy.

KM: Great.

JM: And you go to cyberwave.com/cyber, c-y-b-e-r and there’s an

order form up there. And for the same price as the newsletter,

you can get all this stuff.

KM: Oh, that’s crazy, man.

JM: And then we’ll fulfill those, we’ll probably fulfill that in the next,

you know, I’m sure within a day or so.

I started again here.

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KM: Yeah, like I said, you know, if you put me on a desert island and

said you can only take one Internet marketing resource, I would

just take Jonathan’s stuff because I know starting with his

material, I would be able to connect myself to every other

valuable worthwhile thing on the Internet in terms of a

marketing resource.

JM: The main reason is because you and I come from traditional

direct marketing backgrounds. And the peak of it, in my

opinion, it screwed up the Internet or screwed up the conversion

rate or the way that people think about it are people who have

never really been exposed to traditional direct marketing.

KM: Well, let’s remember, Jonathan, when we started there was

nothing glamorous, sexy, or exciting about online marketing.

JM: It’s like when we started the Internet, commercial Internet really

rose up, I think, in 1990, late ’92, early ’93.

KM: Yeah.

JM: And we were advertising on AOL and copy for classifieds before

that as I think you were probably.

KM: Yeah, but and nobody gave you any bonus points for being an

online marketer. You really had to make your promotions work

or you felt like an idiot. You’re like why am I wasting all my time

on this crazy medium. I should be making money on it.

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JM: I know. Because all our friends were doing direct mail, the

funny thing is once we figured out the two-step program that

worked with the … classifieds and it worked with magazine ads.

I remember back in ’95, I think it was, we were on our last three

page magazine ad to generate leads because we were spending

so much money on media and we were just not getting the

response. And the worse part is, I eluded to before is, it

wouldn’t come in, for 6 to 8 weeks. I could spend 100 bucks, I

could get 200 leads, it was 50 cents a lead. I knew I would get

it in a couple of those, I’d follow up right away, and darn it if we

didn’t make money. And that lag time was really what killed it

for traditional media for me.

KM: Well, the Internet is sort of like a dream for direct marketers.

And it’s a perfect laboratory for people that want to get started

or get in, you know.

JM: Yeah, absolutely. Ken, especially now because so many of the

barriers have been broken down and so many of the

opportunities like search engines are available to the world. You

know, if you have an idea for an ebook, you can go to ClickBank

and you can get set up for 50 bucks and you can go to Overture

and get set up for 25 bucks and you can get some ebook

software for 30 bucks. And bang, you can put together a

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promotion, for a couple hundred bucks in a week. I mean, that

was never possible before.

KM: Jonathan, thanks so much for taking the time. Guys who don’t

know the business have no idea how much he’s contributed over

the years to so many people and so many businesses. And how

much money he’s helped people make, it’s really astounding.

And I’m really grateful he could take the time to share some of

the fundamentals with us. And, hopefully, we can lure you back

here another time in the not too distant future.