Why It’s Time to Redesign the Way That We Think About How to Make Money Online
The Internet is changing yet again. Let’s look at a few reasons why it’s time to redesign and modify the way that we think about how to make money online.
Google’s Dominance and Decline
Google Adsense retains about 80 per cent of all online advertising, two thirds of search engine traffic and a growing database of content such as Google Books. And to think we once sued Microsoft for bundling a browser with an operating system.
Google is still the 8,000-pound gorilla of the Internet. However, that is slowly changing. Bing is finally a decent search engine, which means search engine optimization will no longer be dominated solely by Google’s rules. Another shift is due to Google’s abuse of websites. It blacklists people at seemingly random, including famous sites by the author of “The Four Hour Workweek.” This has led many websites to revert back to the advertising methods of the Greensheet and the Coffee News – approaching manufacturers and service providers for a chance to place their ads on the website.
Google’s dominance of the online advertising market will remain high for a number of years. However, we need to change our processes regarding how to make money online. The online advertising plans tied to Google Adsense will lose out if Google doesn’t adapt. And a scheme about making money online that ignores alternatives such as soliciting ads yourself could cost you lucrative opportunities.
The New Business Opportunity Rule
The FTC has started cracking down on continuity programs, so many people who set up subscription services or sales affiliate agreements are now in danger of running afoul of the FTC. The FTC’s “New Business Opportunity Rule” went into effect March 1, 2012.
Whether you know about it or not, the “New Business Opportunity Rule” or “New Biz Op Rule” applies in all 50 states.
What does the law state? First, it says that you have to give people at least a week to review the disclosure statement before they sign it. This includes online affiliate deals, which a landing page and instant enrollment violates. Second, the New Biz Op Rule requires you to disclose your 10 closest purchasers or all purchasers in the past three years if fewer than 10. All prior business opportunity purchasers with a personal relationship to you must be identified. You cannot make earnings claims without identifying the source of the claim, its actual earnings, the date range in which it was achieved and what allowed this exceptional person to achieve this level of sales. Throwing on a disclaimer that these results are not typical doesn’t cut it anymore.
While the New Business Opportunity Rule used to apply to rack displays, vending machines and envelope stuffing deals, it now applies to many online business programs. You fall under the rule if you are soliciting for them to join your business and they pay to join it. You also fall under the rule if you give someone marketing training selling a specific product or perform a service, and then giving him/her a list of potential clients.
You can avoid running afoul of the FTC’s New Business Opportunity law if you only train people in the sale of a product but require them to find their own customers. You also avoid legal problems if you leave the affiliate responsible for monetizing the product in its own way. It is essential to review your plan on how to make money online so that you don’t trip up on the FTC’s regulations. This law is why more online moneymaking systems have shifted from “sell our product using our system” to the “you pick the product, we’ll train you to sell it” model.
The Restore Online Shopper’s Confidence Act of 2010
Another often-overlooked legal change was the Restore Online Shopper’s Confidence Act of 2010. The Restore Online Shopper’s Confidence Act of 2010, or ROSCA, applies to continuity plans. Continuity plans traditionally referred to the “buy a CD for $0.10, get another a month for the rest of your life” deal that tended to overcharge for the remaining CDs. ROSCA’s update in 2010 expanded ROSCA’s marketing provisions and the list of those who could be charged with deceptive marketing practices. Does your plan regarding how to make money online revolve around a subscription website? ROSCA now applies to you if you charge people for access to the subscription site. Membership sites that are free may or may not fall under ROSCA, even if you offer additional products and services to those on the membership site. (LinkedIn’s jobseeker premium and Facebook’s paid games come to mind.) Do you offer software as a service? ROSCA now applies to you unless the software is free.
Crowded Content Market
One of the original methods touted when it came to how to make money online began with a blog. Write it and they will read it. Write content that is funny, informative, entertaining or engaging and you’ll generate enough page views to make money from Google Adsense revenue. Do a really good job and you might land a book deal. Ben Huh of Failblog.org and Pamela Slim of Escape from Cubicle Nation are examples of this model.
Unfortunately, the idea that blogging will make the money come in is dying. The content market has become crowded. There are hundreds of millions of blogs, enabled by platforms such as WordPress. Content farms such as Demand Media tailor articles to Google Adsense search criteria and have deals to get high rankings by Google, making it less likely that someone searching for the key words in your best article actually find it.
This method of making money online isn’t completely dead. In 2014, XKCD’s creator, Randall Munroe, leveraged his science and technical humor comic strip and funny “blag,” which answered seemingly impossible questions, into a series of books.
Building a Website and Monetizing It Is Harder to Do
Bloggers didn’t always expect to make money simply by writing a blog and getting Google Adsense revenue. They often searched for other ways to make money, with content being only the start.
Bloggers that are able to monetize their sites in multiple ways are more likely to succeed. For example, Mommy bloggers that are able to get paid for placements of credit card offers and free-everything in return for a review can make money via blogging, even if they don’t write a book. The challenge for those whose plan on how to make money online follows this model is the sheer amount of competition. There are now 100,000 Mommy bloggers, all requesting samples from companies, competing with Swagbucks offers and decreasing the website traffic to each site and corresponding income opportunities.
Subject matter experts can use their blog to demonstrate their expertise in a subject such as IT security or Russian-Chinese international relations. Someone searching for the topic will come across the blog and, after reading it, may hire the subject matter expert. The blogger then makes money by using the blog as an advertisement for his/her services. However, these subject matter experts, too, face a crowded content market, which makes it difficult for them to be discovered. Google biases website searches to its own content in Google Books and those they have agreements with, such as Demand Media. The expert that can land consulting gigs as a result of the blog is less likely to be found.
Privacy Protection Tools
Privacy protection tools are a frequently overlooked problem when someone devises a plan on how to make money online. Think about ad blocking software, which is wonderful if you want to read a blog without the Google ads, but a disaster if you rely on those ads for money. Likewise, better spam filters have made email-marketing lists less effective.
Affiliate Marketing Online and the Rise of Massive Online Retailers
Let’s suppose you plan on making money by selling a product online. It costs you little money and you can sell it with a high markup. All you have to do is build a website, tailor it to Google’s search criteria and go.
The problem is that you assume the customers will come. Let’s suppose they see your product and want to buy it. Will they buy it through a site that they are unfamiliar with, risking their personal and financial information? Or will they buy it through large online retailers such as Amazon.com with known return policies, reviews on sellers and the ability to get retail giant on the seller’s case if there is a problem with the product? Will the possible client buy the product from your small website or go through a site with the ability to leave reviews and mediate problems such as eBay and Etsy? Affiliate online marketing has gotten harder when sites such as Amazon, eBay and Etsy have become the online equivalents of Wal-Mart, wiping out the mom and pop stores. You can set up a site yourself, knowing you’re less likely to get sales than an Amazon affiliate. Or you could become an Amazon affiliate, knowing that the price pressure only goes down.
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