If you had a million dollars to invest, would you put it all in a single stock? Of course you wouldn’t. That would leave you completely dependent on one company’s success or failure. Anyone who has ever done any investing knows the value of diversification. But are you practicing this with your traffic mix?
For most webmasters and adult site owners, quality traffic is the most important asset. So, why then, do so many companies put all of their proverbial eggs in one basket? If you’re in this business for the long run, then like when investing, you must diversify.
Consider this: You generate 4,000 sales per month, either to your paysite or to affiliate programs. Of that, 3,000 come from email campaigns you send out. That’s a whopping seventy five percent of your income dependent on mail. What would happen to your livelihood if tomorrow bulk-emailing was outlawed? Would you be able to survive until you could find a replacement for that traffic?
Whether you are new to the industry or have an existing business, you need to create a traffic plan that will both meet your needs, and protect you in a volatile market. Here are some suggestions for developing a diversification strategy:
• As with any plan, you must begin with your goal. Determine the income you need to produce or the percentage of return you need to maintain to be comfortable.
• Set a budget for buying traffic. This should include direct advertising purchases, affiliate payouts, marketing costs, etc. Basically, include every dollar you spend to acquire traffic.
• Determine the traffic sources you have available to you. You should create a list complete with volume available and price. When setting a price, your best bet would be to avoid the cost per click or impression, and calculate the price of the traffic per acquisition. For example, if you pay 10 cents per click on a pay-per-click search engine and you’re converting 1 in 200 to a join, your cost would be $20 per join from your PPC strategy.
• Assess the risks for each traffic avenue. Will you be outbid on your PPC placement? Will the web site you buy traffic from form an alliance with another site? What would happen if you lost your top five affiliates? Once you’ve gone through the worst possible scenarios for your traffic sources, classify them into three risk categories: low, moderate and high.
• Determine the possible gain from each of these sources. Does the potential gain out-weigh the risk? If not, it shouldn’t even be in your mix.
• Depending on your financial goal and your available budget, decide how much of your budget can be spent in each risk category. Create a pie chart for a visual reference. For example, to be a moderate traffic investor, you might allocate 25 percent to high-risk traffic, 50 percent to moderate-risk traffic and 25 percent to low-risk traffic.
• Map out the details of your allocation with volume, price per acquisition, and potential gain.
• Make a contingency plan. If you do lose one of your sources, make sure you have another source within the same category ready to replace it.
• Track! None of this planning will mean anything if you don’t track the results to make sure that your risk assessment was correct and your gains are in line with what you forecasted.
Once you’ve created your traffic plan and have a diversification strategy that you are comfortable with, put it into action. You can only forecast so much, so you should assess your plan every month and be willing to make adjustments as necessary.
Treat your traffic portfolio like your financial portfolio and think like an investor. A well-balanced advertising and marketing strategy that is constantly moderated and executed intelligently will provide you with some security in the ever-changing world of the adult industry and increase your chances of business success.