Diversifying Your Income Streams

As an internet marketer it’s important that you don’t put all your eggs in one basket. You should have a diverse income stream with money and traffic coming in from multiple sources. Ideally you will have multiple sites providing large chunks of your income but even if you own just a single site (or no sites), you should not be relying on a single company for the majority of your income.

If you read any webmaster forums (especially amateur cesspools like DigitalPoint), you will come across countless horror stories of affiliates being dropped from Adsense, Adwords, and affiliate networks that rip you off or go out of business and don’t pay what they owe you. Look at all the Colorado and New York affiliates that Amazon and others simply dropped one day due to new tax laws (stay tuned for a future post on how CO and NY affiliates can still make money!) You can and should protect yourself.

Over and over I see people giving a $100 a day on Adsense goal for themselves as the “quit the dayjob” minimum. While $100 per day is nothing to sneeze at, if your entire income stream is coming from Adsense, you could be in trouble because you are putting your entire paycheck in someone else’s hands. A goal of $100 per day but qualified by saying 50% from Adsense, 50% from other sources gives you at least somewhat of a backup plan.

It’s not just income streams that should be diversified- traffic too. If you rely soley on Adwords or Facebook for CPC traffic and suddenly get dropped from those programs (happens frequently), all of a sudden you have NOTHING. If an affiliate network decides to pay you really late (or not at all) and you need that money to pay for more PPC traffic, you’re gonna be stuck. If you have a landing page that is properly SEO’ed and is receiving search traffic, you will be in much better shape. Likewise if all of your traffic is coming from Google searches and you get John Chow’ed out of the index or penalized down a few pages, you are screwed unless you have other traffic sources like links from other sites and your email/feed/Twitter subscribers.

Diversifying income doesn’t mean slapping every possible type of ad onto your site at once. Too busy and too many ads at once will make you LESS money because visitors will just leave without clicking anything. You can run different ad networks on different sites to see what works best for each site. You can put Adsense on affiliate marketing sites (obviously be cautious if you’re buying traffic). Private ad sales on your site enable you to receive the money directly regardless of traffic and without any middlemen.

I like to diversify my sites with at least 2 types of income each. For my content heavy blogs I like to run Adsense, affiliate links and private ads all together as long as the site design and subject matter allows them to coexist neatly. I also try to build up a large subscriber base so I’m not entirely reliant on Google for traffic. Getting traffic from other sites is a total crapshoot and unpredictable for the most part but if you can get yourself linked to on the right site you can receive steady free traffic (I have one link on a magazine’s blogroll that brings me a consistent 1000 visitors a month).

The bottom line is you should evaluate your traffic and income stats semi-regularly to see how dependent you are on a single source and then try to build up other sources to break that dependency. The more you diversify, the better off you will be if one source fails.

This entry was posted on Thursday, June 24th, 2010 at 6:55 am and is filed under Money. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.