Market Inefficiencies & The Fuel Of The Internet

While you have to pay for most products or services in real life, most products and services that exist on the internet have continued to stay free. Since all internet companies have to make revenue, alternative options are looked into of which a large portion has been advertising.

As advertising became the main fuel of the internet, mega players jumped into the advertising industry to have power and control over the internet’s oil. To power effective advertising, data became even more valuable asset. But the internet advertising had and continue to have many many inefficiencies and over time, all markets try to remove inefficiencies to move towards higher profitability.

A major chunk of the advertising dollar has been going into the pockets of agencies, networks, exchanges, and other layers over layers of middle-men. I look at that as market inefficiency.

With influencer marketing, we saw the markets tried to get more efficient and remove the middle-men altogether. Everyone who explored this area, including us, saw over a 1000% higher ROAS compared to traditional advertising.

A large part of internet continues to stay free because one way or another commerce happens. Advertising is only the means. Facebook and Youtube videos continue to stay free because these companies make money with advertising and data.

However, advertising and data work because commerce happens. Everything else, including the advertising and data are also middle men. They are the inefficiencies that we need today, but hopefully the market will continue to find more efficient ways for higher profitability or cut-throat competition.

All websites and blogs that relied on advertising for years have been increasingly moving towards affiliate commissions to keep their businesses alive. As Amazon cuts affiliate rates, and others might follow, these content websites will need to find smarter ways to make their businesses work. What you could do before by just selling ads can only be done today by selling a product. Today, you can make it work by making a sale happen for someone else and getting an affiliate commission. Tomorrow, that may be seen as a market inefficiency and you may have to generate a sale for yourself either by selling products, or charging for your own product or service.

Youtubers today make up-to 80% of their income not by Youtube ads but by influencer marketing and brand deals. Youtubers and brands are cutting the very platform as the middleman that they host their content on.

We started Socialoholic with content and blogs. We relied on selling advertising in order monetize our network of websites. We drove traffic from the influencers to our content so we can sell ads and pocket the difference. We became content-arbitragers. So many middle-men while the true value was only created because someone somewhere bought something.

Years later, we found ourselves driving the same influencer traffic but instead of driving that to content we drove it to products. We removed the inefficiencies.

Over time, we have pivoted from content to focus on e-commerce as our core area of business because that is the real fuel of the internet. Everything else is only relevant because it assists e-commerce and when something more efficient pops up, it is replaced.

Product As A Currency

I have often seen many entrepreneurs offer their product or service as a mode of payment. I read an interesting story in this blog by Waqas, CEO of Markhor and Atoms. He traded 15 pair of shoes to get hold of a Twitter handle for his company.

I think that he certainly stood a better chance of acquiring that twitter handle with an interesting offer of 15 shoes instead of cash. Moreover, by paying with his product, he delivered more value and incurred lesser cost.

In e-commerce, most business owners pay influencers with their products. The influencers in turn review the products and get to keep them for free. The business owners get UGC (user-generated content) that they may use on social media and in their ads. In addition business owners receive content-distribution as the influencers review the products for the followers. The large influencers also receive store credit as a form of payment in addition to free products. The influencers receive higher value (e.g $99 goods if they had to buy), while the businesses incur lesser costs (e.g $30 cost of goods).

Product as a currency works and is a preferred mode of payment for modern businesses.

This Simple Trick Resulted In 800% Higher Traffic From Facebook

We have worked with many influencers for some of our content websites. The best part of running this operation between ’11 and ’16, in addition to generating revenue, was gaining extraordinary insights and knowledge.

It was a collaboration with over 200 marketers each running individual experiments in identifying the best of the best ways to leverage Facebook’s newsfeed. During the few years that we ran these websites, we collectively identified many ways to increase newsfeed visibility, but here’s my favorite one because this was the easiest to execute and had the highest reward.

We identified that Facebook distributes new domains on it’s platform with a much higher weight than domains with history. As the new domains receive some feedback in the next few days, their distribution is also limited. But there was no easy way to launch a new website everyday, with all sorts of advertising approved, and unique content in place. So as a quick fix, we resorted to using new domains but only as redirectors. This wasn’t a great solution to this problem, and obviously came with some caveats. So we looked further and eventually identified the perfect recipe to leverage this.

On running another experiment, we identified that sub-domains are also considered as fresh domains with no history as far as the Facebook’s algorithm is concerned. At the same time, subdomains do no require fresh approvals from the ad networks and exchanges. We also do not have to use redirectors, and Facebook referral headers stay intact.

Using this simple trick, we were able to boost our traffic by up-to 800% and were able to provide an environment that the influencers preferred due to extra-ordinary results and revenue-share.

The Incentive To Be On A Platform

Platforms of all sorts incentivize businesses to depend on them. Most of my internet businesses were/are heavily dependent on Facebook, Instagram, Digg, Google etc. You got to drive traffic from somewhere, right?

The influencers making hundreds of thousands claiming to be indie artists are dependent on platforms like Instagram, Facebook & Youtube. It would take one bad email to snatch away their dreams, career, livelihood and fame. Platforms are risky, and the bigger your business is, the less dependent you need to be on a platform.

The list of causalities is too long for me to name. The list of my own business casualties isn’t short either.

It’s okay to be on a platform. We all need them. They are the power houses of the internet and fuel growth for all of our businesses. But it’s one thing to drive business from the platform and it’s another thing to build business on a platform. In an ideal scenario, we shouldn’t be building businesses on platforms. In some situations though the reward is so high that we and others embrace the risk that comes with the platforms.

When I started this blog, my father asked me that why am I self-hosting it. By self-hosting, I need to take care of some small bills, and also need to maintain it myself. In comparison, I could have started writing on Medium instead, which is what my father expected me to do. It can be easier to subscribe, higher email delivery and open rates, free recommendations and surfacing of my content on the platform to other medium users, no cost of hosting content, safe, higher up time, better SEO etc. There could be many benefits.

But when I see content-locker on Medium that tells me that I like to read a lot and hence have reached my reading limit, it’s a sweet reminder of why I chose not to use a platform like Medium.

I’ve finally decided to share my life stories. It took a long while for me to agree to write and share and I can not leave my breadcrumbs on the mercy of Medium or others. I use platforms because there’s financial incentive. As there is no financial incentive with this blog, I decided to self host it even if it means lesser readership, lower email open rates and everything else that I’ll be missing out. In the long run, I think, I will miss out more on a platform.

Making a Million Dollar Out of Thin Air

It sounds surreal. A million dollar out of thin air? How can you create money out of nothing. You can’t. But you can create money without having any money. Like you do in an employment. Although, you probably can’t make a million dollar with employment. Then how can you make a million dollar without investing any money. Only a few people can imagine something like that. Let me assure you, it’s possible. Not just possible, I personally know dozens of people who have done it.

You start with doing work that has no associated cost. The only cost would be your time and effort. Like starting a YouTube channel with your phone. Just like my friend ZSM did. Or you could work as a freelancer on UpWork / Fiverr and build your way up to becoming an agency or creating a product. Or you could just write a blog. Or create a following on Instagram or Facebook to be an influencer. Or you could sell arts and crafts, or T-shirts and hoodies on Etsy, or TeeSpring or Printful. If you’re a developer, you could be selling services on Fiverr and eventually start making plugins, apps and themes for WordPress and Shopify creating a product and a value-asset.

Let me assure you, I’m only scratching the surface here. If there are 99 ways to make money online without investment, I only know of 1. And I’ve written about what I know here. My brother recommended me this channel. May be you’ll find a lot more options to kick-start your internet journey there.

In summary though, there are hundreds of ways to make a living on the internet. Hundreds of things that need no capital to start. And hundreds of them that can eventually make you a million dollars. Sure, you’d most likely need to pivot at some point, but you can most certainly get there. Let me talk a bit more about the pivots below.

Suppose you start as a T-shirt designer on Fiverr. You sell time and skill to make money. Eventually you pivot and also start selling your designs on Etsy and use a print on demand to fulfil your orders. Once you get the hang of it, you now want to hit a larger audience or a global market. You pivot again and you take your designs to Shopify. You now invest a lot of money that you have made thus far in audience acquisition using ads on Facebook, Snapchat, Instagram, Pinterest etc. You find more print on demand services in different countries so you can locally fulfil your orders. Eventually, you’re doing hundreds of thousands of dollars in sales. You have created a million dollar value-asset. All with sheer hardwork and no external funding or investment. You have successfully turned $1 into $1,000,000.

I don’t want to mention names here for the sake of privacy, but I know at least one millionaire in Pakistan from each of those categories: an influencer, a designer, a blogger and a developer.

The question is do you just like reading articles with a million dollar in the title, or are you gonna take actions.

Breaking the Internet With Influencer Marketing

Users online on Socialoholic’s content website at one point in time according to Google Analytics

Since 2011, we have driven more revenue from influencer marketing than anything else whether it is for e-commerce, content websites or Ad Breaks (video monetization program of Facebook). Influencer marketing is really rewarding in one regard and that is you can often have a much higher reach compared to paid ads of the same platform for much lower cost. It is one of the best ways to scale your business on social networks with higher margins. I also feel no shame in acknowledging that we’ve been doing influencer marketing before we knew what it was called. That makes us one of the first ones to tap into this industry.

We have served as much as 60 million pageviews in a single day. That’s 700 pageviews per second or 42,000 per minute. We also served 240 million ad impressions per day making our content network one of the largest in the world. I mention these figures to demonstrate the power of influencer marketing.

60 million PVs on 30th December 2014

We are also notorious for breaking the internet because we have crashed cloud servers, not only making our back-ends inaccessible but for hundreds of others as well. Of course the front-ends always stayed unaffected.

Our audience development was led by Musa Mughal who was only 16 at the time of contract. We identified him for his connections in the influencer-sphere when he was very young and that has led to a very rewarding experience for both Socialoholic and him.

Today, while Facebook penalizes content-websites for influencer marketing, it is still a booming industry for Ad Breaks. While Instagram continues to stay the top audience market for e-commerce businesses. I highly encourage you to explore this area of business as personally I haven’t found anything better in the entirety of my career.

I mean, Kylie Jenner became a billionaire by running e-commerce on her instagram, what further proof do you need?

How Our Dropshipping Business Grew by 837% in 4 Weeks

This is the third part of the three-part series of posts that I planned to write on dropshipping. The first post explained what dropshipping is. Second part highlighted our scaling strategies, and the third part explains the final trick that boosted our sales by 837% as we handled over 10,000 orders everyday.

By mid 2017, we were successfully running 3 e-commerce stores. I was extremely busy running day to day ad-ops for our company. Fulfillment had been automated completely. But Saad, my co-founder, still had a few things outside of our core business ops that kept him very busy.

We were doing nearly 2000 sales a day, and posting growth month over month. I was happy with the progress but also very busy launching new ad-sets and optimizing existing ones. We were constantly trying to scale globally. We were extremely proud that we had a major portion of sales coming in from Brazil, Mexico, Portugal and Australia. Combined, this was bigger than US.

Meanwhile, Saad tried to crack an altogether different code. If you remember, I mentioned in my last post the #1 trick to scale a dropshipping business. I said I can’t stress enough it’s importance. That is exactly what Saad was busy with. He hired a team of developers in Ukraine and we ended up with what we internally call hypersonic. A product spy tool, only to be used by us that gained us leverage against every other dropshippper. We scrapped every single dropshipping store in the world, and found winners in real-time.

This helped us find 3 more winning products within 4 weeks, allowing us to eventually scale 8x. At the moment, we only privately use this tool because of the kind of leverage it provides us against others and haven’t decided to offer this as a service. However, I highly recommend serious 7 and 8 figure dropshippers to develop something like this internally to ace this game.

7 Scaling Tricks To Run 7-Figure Dropshipping Business

This is the second post of the three-part series that I’m publishing on dropshipping to help create awareness of what it is, and scaling strategies that we use in our company to rocket-fuel growth. This post is not for beginners and will make more sense if you have already started your dropshipping business or have some sort of digital marketing experience.

Since 2016, our company has been running several dropshipping stores in 3 different niches. Most of the growth comes from paid-advertising with majority budget spent on Facebook, Instagram and influencer marketing (also on FB & IG). We also spend about 20% of our ad budget on Pinterest and Google Ads. There is no reason why we spend less on the latter, we’re just more comfortable advertising on Facebook. It’s possible other dropshippers find more success on Google. So by all means I recommend that you explore it. Below I’ll list the top strategies we use in our company for growth.

#1 Product Hunting

I can’t stress enough the importance of product in your dropshipping business. Without a good product and creative, your chances of winning would seriously suffer no matter how good your ads are. I recommend that you spy other stores, AliExpress, Wish, Amazon and everything else that you can to get access to products before others. Most dropshippers use some kind of product spy tool which is often a paid subscription service. You can also search for products on social media platforms where they are being advertised.

#2 Influencer Marketing

Influencer marketing is often always an easier method to find success with dropshipping. To some people it looks more complicated because it involves reaching out to many people, testing their audience and sometimes losing money to less-engaging audience. You may also end up finding accounts with large amount of bot followers, causing total capital loss for the campaign.

The reason why I say it is the easier option is because once you make connection with the right influencers, this is basically an on-going, long-term money making opportunity. You can keep trying new products in the same niche with the same influencer and you can continue to get sales.

Influencer marketing is often also lesser competitive compared to the platform ads where everyone is competing, whether in a dropshipping business or not. This also means that once you have right influencers, you’re likely to have a much higher profit margin compared to running ads on any platform.

#3 Pixel Training & PPE Ads

Without pixels installed on your store from Facebook, Google (and any other platform you choose to advertise on), you’re never going to be able to run successful ads. In short, pixel is a small snippet of code provided by ad platforms that you can install on your stores. Once installed, the pixel establishes a connection between the store and the platform. For example, FB pixel will exchange data between the actions committed on your store and FB ad platform.

The pixel fires whenever a user initiates any action on your store whether it is view content, add to cart, initiate checkout or purchase etc. All user behavior and action data is stored in your pixel. As long as the pixel keeps getting fired, it continues to create an audience profile for you. The more sales you have, the more easily the pixel can help you find better audience. Without pixel training, your campaign is unlikely to do well for you.

First strategy that we commonly use to train pixel is running influencer marketing campaign to get quick, cheap sales. These sales help pixel understand our audience.

The second strategy that we use is running PPE (Page Post Engagement or simply Engagement ads). Engagement ads are cheaper than conversion ads. You get quick social proof, you get quicker, cheaper clicks and this can be a nice way to train and prepare your pixel for your actual campaign.

#4 Horizontal Scaling

After generating a few sales from influencer marketing and PPE ads, we start running website conversion ads. We create a large number of ad sets with a unique targeting angle for each ad set.We generally run these ad-sets on a small budget. This allows us to scale our campaign through many targeting angles. We also end up testing many targeting options. Setting a small budget for each ad set means you’re not trying to win all bids and so you don’t over-spend. Instead you scale horizontally, running many $20-$50 ad-sets. This way you can continue to lose bids (save money) as well as spend more budget (scale) your ad campaign.

#5 Vertical Scaling (with Manual Bids)

Once we have found our top winning ad-sets we also want to scale them vertically. What that means is we ideally want to increase budget for these ad sets. There are generally 2 methods of how this can be done.

Using the first method, you can increase budget for winning ad sets by 10-20% every 2-3 days. This is obviously a slow process and can sometimes not work as expected because ad-sets try to re-optimize every-time they are updated.

The second method is scaling through manual bids. This means that the budget can be exponentially and immediately increased. But we put a cap on what we’re willing to pay for each sale. If the ad-set fails to get a sale, it stops spending. We have had success running $5000/day ad-sets using this method. So this is a fool-proof method to scale vertically. You win, or you don’t spend.

#6 Lookalike Ads

Lookalike is a magical AI technology by Facebook which allows you to run ads without any targeting options. Once you have generated more than 100 sales from a single country, you are eligible to create lookalike audience. This is the quickest, dumbest, simplest way of scaling your ads by letting Facebook do your job.

#7 Retargeting

The simplest explanation of retargeting is not leaving money on the table. A lot of clicks to your website are going to result in missed sales, abandoned carts or simply window shopping. You can reach these high-intent buyers again. Just run retargeting ads, emails & SMS to convert these missed leads for almost negligible price.

Conclusion

A lot of this information is going to sound tough especially if you’re a first time advertiser. But who said running a 7-figure business was going to be easy. The good news is, you can simply start with influencer marketing and learn your way up. The better news is, this is a very low cost business to begin with. You can start with as little as $2000 and make your way up to 7-figure. And the best news is, we have seen it happen first-hand.

In the third part, I’ll reveal the final trick we used to grow our sales by 837%

How We Made ISI #1 Intelligence Agency In International Media

In 2010, a blog post was published on one of Socialoholic’s content websites titled top intelligence agencies in the world. The goal of the blog post was to initiate a marketing effort to honor the sacrifices made by the agency by trying to brand them as the #1 intelligence agency in the world. We genuinely believe that the rankings were done professionally with proper journalistic values after collecting & analyzing data, reading the literature & conducting a quantitative research.

Marketing

The content was then pushed on the social news websites by our team such as Digg & StumbleUpon. We performed Guerrilla Marketing tactics to create a unique, thought-provoking buzz. Since this was in the early days of the social networks with Facebook just emerging, and Whatsapp almost non existent, we honestly didn’t expect it spread like wild fire, but we are insanely proud that it did.

Coverage

It was picked up by all local news channels, print media such as The News, Express Tribune, international media (The Atlantic). There were hour-long shows hosted on local entertainment channels, including on Aag by Geo. It was picked up by ex-DG ISI, Lt. Gen Asad Durrani who took the message further, and also published it in a book The Spy Chronicles that he co-authored which was published in 2018.

Impact

On-site, the article was read over 1,234,475 times while the major impact happened off-site which we can not measure accurately. Our estimates suggest that the message was heard by over 85 million people. We have made these estimations by only including data from the known sources where we know it was published/broadcasted and by taking in account their estimated readership and audience at the time it was published or broadcasted. This doesn’t take in account, the discussions done in independent forums which we estimate further add about 10 million readers.

Authenticity

We published the content using a generic “Smashing Lists” website. The content was not published under a pseudonym but by the original name of the writer. The theme, over-all design, domain name didn’t imitate any popular publication. We created a genuine experience and maintained distance with fake-news and InfoWar tactics.

Responsible Journalism

Just 2 days ago, Vice Media unearthed a report of a shadowy Indian company that used 265 fake websites operated in 65 countries that mimicked news outlets by using similar names of popular publications like Times of Los Angeles, New York Morning Telegraph & Times of Pyongyang etc. The goal of these efforts is to confuse the user into thinking that the news that he’s reading is being published by a genuine trusted news agency. As per Vice, the larger goal of the campaign was to influence European lawmakers in favor of Indian interests in Kashmir.

We are proud of our efforts for publishing professionally researched content, using authentic distribution channels, and creating an over-all safe and genuine experience for the readers. This is the least we can do in the times when others resort to fake news to set the narrative for the readers.

Disclaimer: We are not affiliated with any organization or agency. This was an independent marketing effort for which we independently generated advertising revenue. We thank the writer of the post for her efforts.