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In the midst of a plummeting economy, one man sells his financial Wordpress site, Bankaholic, to Bankrate dot com for $12.4 million plus. How did he do it? Well, it all goes back to his early days as a student at the University California, Berkeley. Learning SEO as a young student helped boost him into a level of affiliate marketing that many marketers have yet to achieve. It was part luck for him, having learned the industry from a knowledgeable mentor while in school, combined with years of hard work and a determined drive to succeed. This man, Johns Wu, now a seasoned 23-year-old internet marketer, shared some insights with me as to how he built his financial fortress, and what he plans to do next.

Since you were so young when Bankaholic started, how difficult or intimidating was it working with your affiliate managers in the beginning? And how quickly did you get their attention?

I’ve had great experiences with all affiliate mangers. My first affiliate manager was Bill Gales Jr. at NCSReporting. I’ve met one of the founders of NCS, Scott Langdon, and he takes prides in building an affiliate network that puts great emphasis on customer service. If you feel intimidated by your affiliate manager, you should really get a new one!

I didn’t have any leverage in the beginning, but as the traffic ramped up, affiliate managers were much more willing to work with me to get higher CPAs.

I remember a couple times hearing you negotiate higher CPA’s with your affiliate managers. At what point did you realize you had a lot of power over negotiations, and did that come naturally to you or were negotiations ever trial and error?

I realized I had power over negotiations when rival affiliate networks started reaching out to me out of the blue, offering to beat my existing CPAs. This ultimately created ‘bidding wars’ where I would bounce back and forth between networks as they struggled to beat eachother’s CPAs. A tip for marketers is to keep your afflinks naked, so that affiliate managers can clearly see who you are running with.

In general, I don’t really stress much about CPAs. I rarely proactively ask for higher CPAs, I just let the bidding wars determine the final CPA. I focus more on tweaking conversion rates and driving traffic.

If you were to consult other affiliate marketers, what metrics would you tell them are most important to track to achieve success and why?

Organic Traffic - Self explanatory

Revenue Per Visitor - Segment your RPV by offer categories and plot your monthly RPVs. When you are running a big site with lots of different types of offers, you need to make sure all the gears are running smoothly. If you see a sudden dip, that will alert you that something has gone awry. Having an RPV will also help you set bids for your search marketing campaigns.

Profit Margin - If your margins are too high, you’re not reinvesting enough back into your operations. If you’re margins are too low… well, that’s a sign of trouble and you’ll need to fix the monetization side of your business.

Do you have any tips on negotiating deals with large corporations once your affiliate site has proven it can drive high quality traffic?

Working with corporations was EXTREMELY stressful. Anytime you do ANYTHING with a corporation, you will probably need to sign a contract. This means you need to hire a lawyer to make sure you’re not signing away your soul. At least five lawyers have at one point performed services for Bankaholic, and my overall legal expenses from running Bankaholic are north of six figures. Unfortunately, there’s no way around this. Lawyers are a necessary evil, although I’m thankful all the lawyers I’ve worked with so far have been great.

Now that the deal with Bankrate is sealed, what are your next plans?

I’m already looking for new projects to work on. For people like us who live, eat, and breathe Internet marketing, there is WAY too much opportunity out there to sit on the sidelines.

I’m watching domain auctions like TRAFFIC very carefully… I really want to buy a premium domain and build out a megasite. In times like this, premium domains are a good investment and a handy tax benefit (always amortize!). To some extent, I have some seller’s remorse because I’ve come to become emotionally attached to Bankaholic after working on it obsessively for so long, so I need to get started on something new to keep my brain occupied.

One thing I’m excited about is that a lot of powerful Internet entrepreneurs with insanely impressive track records have been reaching out to me to explore possible partnerships on future projects. Find me on LinkedIn if you want to connect and bounce ideas about all things Internet. Other than that… I’m looking to buy an Aston Martin once things get settled, definitely looking forward to that.

I know that you are a truly inspirational entrepreneur that represents the essence of what we in affiliate marketing seek to achieve. Do you have any final words of wisdom for those out there who are working in the affiliate space but haven’t gotten that first huge break?

Yeah, connecting with the right people in your vertical is really important. Becoming cool with powerful people leads to partnerships that can differentiate you from the crowd. Reach out and email EVERYONE related to your business: advertisers, investors, and even competitors. Some jerks will blow you off, but other that, there’s nothing to lose. And even though it’s inevitable, try your best not to step on other people’s toes as your grow your business. Don’t be shady, evil, or greedy. Karma has a way of finding it’s way back to you, and you never know what kind of obstacles you can overcome with others’ help.

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