My experience with money on the internet

Copyright 2006 Jim Thomas

Long ago and far away before we all had computers and there was an internet, life existed in a parallel universe. In many ways the rules were the same regarding money and the creation of wealth. Conclusion: There isn't any as a result of work!

I started my business on my 25th birthday in 1968. (You do the math) I had exceptional artistic talent and design skills and a penchant for attracting large assignments from large clients. My wall mural at Marineland of the Pacific is an example. During these early years in my career I also was contracted to create many signs and an interpretive shark display for Sea World in San Diego, and pictorial backdrops (hand painted murals) for commercial photography at Lion Country Safari in Southern California and in Florida. I also painted some canvas banners for the circus and I did a portrait of the orangutans at the Los Angeles Zoo. These are a few notable memories from my idealistic beginnings.

This nostalgic recall serves to reference the fact that there was a time when income was derived essentially from one sale at a time as a result of doing one thing at a time. To support the title of this commentary, let's say I baked a whole loaf of bread and it sold for a single price, seldom to be repeated again. This was my business model as a young and enthusiastic self employed artist. There were labor and materials, an invoice, and payment. Then I did it all over again.

As time went by I became aware, as every individual in business does eventually, that there would always be limitations to this kind of life. If I were a barber, for example, it would always be a fact that I could cut just so many heads of hair in a given workday. This is true for any and all labor related individual efforts.

This meant that time and money are connected in this society. In good health and in youth, wages and satisfaction are always possible. Wealth, or the freedom from work, are not! Health is an issue. This knowledge creates anxiety. This anxiety creates a need. This need creates a solution.

I became a silk screen printer.

WHY? Because it moved me from the reality described above into a business model where I could invest in an original drawing once, and do it well, then reproduce it thousands of times for the masses, and never sell the original. Instead of selling the whole loaf of bread I could sell slices. I had discovered successful crumbs.

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Photos of my print shop during the height of our productive years.

Of course this changed me from an artist studio into a factory. We learned about manufacturing, inventory and we hired employees. We were successful living with this new model, creating wealth from a repetitive process with small increments. Instead of requiring several thousand dollars per an assignment done once, we were living on less than a dollar as net profit per item, but making a lot of them. In our heyday we printed and shipped over 5000 t-shirts per week to the majority of our national zoos, museums, aquariums and theme parks. We were in fact just a little famous. The result was that our actual income based on pennies per item was accumulatively more than the days when I charged thousands of dollars per one assignment. It was the American way.

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These snapshots of our displays were taken inside the exit gate gift shop at the San Diego Zoo in 1976. It was common during those years for the San Diego Zoo gift shops to sell more than $20,000 retail of our merchandise on a single summer weekend. Our wholesale business with this one account was a third of a million dollars per year. Crumbs add up.

Back to the Future

The business world is fickle of course and all of that is now over. It is now more than 30 years since those lucrative crumbs. Nothing is done today the way it was then. The digital revolution and the internet have become the new paradigm, and it is changing now even faster. The idea of having successful crumbs applies now surprisingly even more. Enter the intangible... INFORMATION.

I've had a web site for over ten years, this one being my third. At this writing my monthly visitors flucuate between 20,000 and 25,000, that's an average of 800 per day. Talk about successful crumbs!

During the first seven or eight years my commercial promotions online mimiced my previous 30 years in business, display ADs that featured tangible products for sale. Online commerce in its infancy. These included imprinted garments, published greeting cards, posters and CDs, all of which I was also authoring and manufacturing. I had implanted the old world's ways into the new world, just like everyone else.

But everything evolves, perpetually. HTML code, used to create these pages, changed. The internet itself evolved. Dial Up became DSL, cable and more. Digital televison, the internet, Cable, wireless devices like iPods and cell phones all became one. The phone company is now everything. The TV Cable company provides everything. We are wired. We bank, we shop online.

How this affects banking and our credit cards is another essay in this series.

But let's stay with advertising and revenue generating for a while longer as the subject of this dissertation.

Commission sales have been around in this modern world for a long time. It's considered a normal way for a company to solicite sales from a customer at a distance. You pay your salesperson a percentage in return for the written order. I did this in my business life for years, using independant sales reps.

On the internet the rules and the "normal" is out the window. There is no distance. There is no protected territory. And there are billions of potential clients. This is intoxicating and it tore down the old ways nearly overnight. Travel and personal contact are no longer necessary. The most delicious animated full color sales pitch can be created in your office and broadcast worldwide within hours of its conception. And everyone can do it!

I, too, was embalmed by this exciting thought.

My first realization was that the playing field was now level. My web site had the right to look as professional as MicroSoft's. The world could find and read my message as easily as Forbes Magazine's. This was exciting but it also created another problem. Advertising was once the pervue of the larger companies. Only they could purchase national full color AD space. They had an advantage. A small start up business was limited to its budget, which often meant its neighborhood.

The internet changed all of that.

A small microbrewery can now runs ADs in full color with animation and look as professional and as established any of our name brand beer makers.

In my case it also meant that, as a former screen printer, the world wide web was proliferated with other screen printed t-shirt web sites. I was another flower in a field of flowers. For a few years I functioned in the advertising specialty business, known as ASI. The entire premise of this sales business is secret connections with factories. The beautiful catalogs are absent of any company identification so the salesman can control the conduit to the source. His profit depends on it.

Do a search for printed coffee mugs today on the internet and find out how exclusive any company looks. It's over. Everything is everywhere! Advantage based on secrecy is an illusion. Your customer can find anything anytime.

TRAFFIC

The new holy grail is "traffic." Do you attract a lot of readers, called viewers?

Into this thing to be coveted, the number of readers, is dumped the old commission idea. Can we borrow some of your viewers, shoppers, potential buyers; take them from your web site and bring them to ours? If so, we have created several hundred schemes as a means of rewarding you. Everything from free music downloads to cash is available. Hundreds of brokering companies now exist online who "connect advertisers and publishers for a percentage of the transaction, just like credit card banks. And since this is the internet, this relationship warrants a new name. The "affiliate" is born.

The first versions of these schemes were the "earn a percentage of the sale" formula. This most closely resembles the traditional sales commission. The broker company solicited advertisers, created a pool of "offers" and made them available through web code to numerous web sites. This placed advertising on the publisher's web pages. When the viewer clicked through to the advertiser's web site and placed an order the deal was consumated. Money was exchanged and the broker got some and the publisher got some. The digital version of our former lives is now in place.

Of course, as a participant in this evolving experiment, I signed up for a few of these advertising networks. It was as successful as my efforts to attract site sponsors, which means zero. One of the new realities we all soon discovered is that most web surfers are looking for something for nothing. The real estate term, "Looky Loos," became the prevailing human nature on the internet. No commitments here!

Information, Please?

The next phase of this effort to monetize the internet was the creation and offering of digital products. It was discovered that if you offered a digital product online, some kind of software, that could be delivered instantly, spending increased. Adobe developed the PDF format with Acrobat. Publishers began converting everything over to paperless format, something called an eBook came into being, and digital graphics, clip art, templates and more cropped up like weeds after the rain.

Education online became possible. Online tutorials, home schooling, distance learning, all made their way into this environment, and it worked. A comfort zone was created.

With this new solution many of the broker companies shifted over to selling information rather than tangible products. Internet viewers demonstrated simply that they felt safe with digital products within a digital environment. Online companies like ClickBank came into existence and prospered. They offer hundreds of eBooks with thousands of affilates.

I, too, adjusted. My web site ADs shifted from product affiliations to information affiliations. This actually worked, albeit the first version of successful crumbs for me from the digital world.

Nickels and dimes on a regular basis. An old business friend of mine once told me, "I can drink from a stream, if it never dries up." It becomes minimal sustenance, like minimum wages. Never enough, but better than nothing.

This model of business interactivity has remained in place now for a few years, with ever increasing sophistication and complication. It seems that no matter what democratic solution is invented in human events it doesn't take long for the mind to return to the pyramids of power, bigger fish dominating the little fish. If a good idea appears, where everyone benefits, it remains innocent for just a few days.

Chaos Under Control

Enter the bigger fish. Content, traffic and affiliations are now king on the world wide web. How to mine the internet for revenue for its own sake has been discovered. Companies like Google and Yahoo realize how they are now in the driver's seat, capable of watching human internet behavior and tapping it. They are the first to see the trees in the forest, a forest that grew too fast to be understood right away. "Crumbs" have a new meaning. Computers provide micro-management. Minutiae becomes a pile of gold dust. Google creates their AdWords program. Google creates its AdSense program. Google goes public. Crumbs have become billions.

This web page is an example of the current reality on the web. I am enjoying the success of the crumbs, by networking, affiliating and publishing original images and content. My traffic is growing because I stick to this mantra.

Blood in the Water

On the other side of the coin, as it is with the responsibilities of liberty, any kind of insidious behavior can develop. Pioneers in new technology jump in and learn the rules and the skills behind how things work. This is particuarly true regarding networking on the internet. These people probably also learn the lessons about successful crumbs and they are very aware that everyone else, several million people, are doing the same.

And here is where the dark side of the force appears. The temptation is just too big when so many people are involved and you can remain anonymous with trick emails and duplicate web sites. There's more money in selling a scam to others like yourself than in doing it yourself. The web creates this opportunity.

It is reported that the greatest way to get rich is to write a book claiming that you know how to get rich, even if within that book you admit your success is a result of writing this book. The motive to buy the book is as old as people who gave up the barter system.

For this exercise, we will not discuss the "home based business" opportunities that are found on the internet. That's another report. This is about advertising, or in internet jargon, affiliate marketing.

There are now, in less than three years since it started, more "experts" than you can respond to, available online who will sell you the secrets of how to make millions using the right keywords, belonging to the right affiliate program, buying specially designed money-making web sites, and more. The advertising slogan for one of these crafty authors is, "Google sends me too much money!" "Help me," is implied.

There are teachers offering classroom instruction. These individuals are uncredentialed, unreviewed, and self defined. Why? Because they know that you don't know what they know, the success of the crumbs doesn't compare to the success of the chumps, the people they solicit. Buyer beware. Every now and then I run across an internet counselor that admits to the crumbs and advises, "stay the course." Crumbs do accumulate.

Compared to the former ways of having a business, with brick and mortar overhead, employees, equipment, inventory, etc., these crumbs are rewarding and the stream does not dry up. This is the secret of banking and loaned money, because it functions like compound interest. And look at what fortunes are created today from knowing that secret.

Copyright 2006 Jim Thomas, All Rights Reserved. This article is exclusive to this web site. Reproduction in whole or in part elsewhere without written permission is prohibited.