Sunday, August 26, 2012

Is Affiliate Marketing Illegal?

No, affiliate marketing is not illegal. But to my surprise lots of people don't know that.

Showing Off My New Site

I'm pretty proud of my new SiteBuildIt! site. Although I've been blogging for several years, it is my first "real site". The articles are thoroughly thought out, unique and well written. So I have been showing it to my friends and relatives. I was amazed to find out they don't share my feelings.

Is It Legal?

First thing everyone asks is how I'll earn money with my site. When I tell them about affiliate marketing, they all get suspicious and ask if it is legal.

Pyramid Schemes Are Illegal

My friend asked me "is this some kind of pyramid scheme thing?". Those are illegal in plenty of countries.

But SBI and affiliate marketing are not pyramid schemes.

In pyramid scheme you'll have to pay to join in, but you don't receive anything concrete. You'll main job will be to get new recruits and you'll get paid when people join in. That is the whole business, even though some schemes have some "bonus" that is supposed to be paid when a certain amount of people have joined in. Other disguise as multi-level marketing by having some product tangled in.

As the pyramid scheme would require exponential amount of participants, it is destined to crash. The few people in the bottom of the pyramid get rich and the mass of the people joining later will just get cheated.

Multi-level Marketing (MLM) Is Legal

Multi-level marketing is a marketing strategy where you benefit from both your own sales and the sales that your recruits make. You all will be selling a real product and MLM is legal.

The problem is, many pyramid schemes disguise themselves as multi-level marketing. has this excellent table that compares pyramid schemes and MLM. As you can see, it may be sometimes hard to separate a real MLM program from an illegal pyramid scheme.

SiteBuildIt! Is Legal

As said, SBI sites and affiliate marketing are not pyramid schemes. Most of them are not MLM either, as you will only get paid for the products that people buy through your links. You don't earn more if others end up being affiliates themselves.

I do recall that in SBI affiliate program there is a small "second level" payment too, but real MLM programs are several levels deep. Also, getting new affiliates is not the SBI main business. SBI is a course that teaches people to build profitable web businesses. You can buy SBI and never become an affiliate.

Of course, SBI site owners are individuals and nothing prevents them from being fooled joining into a pyramid scheme! So when selecting your affiliate programs, be careful.

Undercover Marketing Is Illegal

My sister asked if my site contains undercover marketing, also called stealth marketing. Undercover marketing is illegal, at least in European Union countries, such as UK and Finland.

But my site does not contain undercover marketing either.

There has been a big buzz on undercover marketing in blogs lately. It seems that bloggers may become guilty of undercover marketing when they write reviews of products that they got for free. If you write a positive review, but do not mention that you did not pay for the product - well, that's undercover marketing.

What, Huh! Are You Serious?

Yes, that's what I thought too. I think that is ridiculous. If you receive a gift, you can opt to write a negative review or decide to skip reviewing the product altogether. Isn't that enough to ensure that the reader does not get cheated? Apparently not.

Most actors and other famous people get most of their clothes from fashion houses yet they are not required to sport "I got my clothes for free"-tag on their forehead. And you are not either - except online.

I do agree that some companies use really nasty stealth marketing techniques. For example, one phone company hired people to flirt in public places. They tried to trick people to try out a certain phone model. The employee flirted with the customer and if they were successful, they asked the customers to enter their phone numbers into their phone. And as they were hired to do that, people never got called.

Anyway, affiliates pay for the products they promote/recommend. So affiliates are not quilty of undercover marketing.

But that did not satisfy my sister. Next she asked if affiliate marketing itself is illegal.

Affiliate Marketing Is Legal

Affiliate marketing is completely legal. You are allowed to promote and recommend products that you like.

Some programs and countries do require that you clearly mention your affiliate status.

I don't see that as a problem, even though that might scare some people who don't know a thing about affiliate programs. They will get suspicious and dismiss your opinions. But doing that they will lose, not you.

There are some rumors going on that some US states have forbidden affiliate programs. But that is not quite true. Those states got greedy and announced Amazon that they want to collect taxes of the affiliate earnings coming to their states. Amazon's answer was to discontinue affiliate programs in those states. Arkansas, Colorado, Illinois, North Carolina, Rhode Island and Connecticut are the ones I know of.

While that was Amazon's answer I think the affiliate programs will eventually get taxed. We'll see.

People Are Still Going To Be Suspicious

Even though affiliate marketing is not illegal, people will continue to be suspicious. I think my sister still is!

I told her that if she wants to "fight" affialiate programs, she can start by boycotting the biggest companies offering affiliate programs - Amazon and Ebay.

I don't think my other relatives and friends are going to make it easy either. Whatever I do online, I think my mother-in-law is still going to ask me "do you have any real work yet?" every time I meet her.

PS. I'm officially still on vacation, so no week reports!

Sunday, August 12, 2012

Week 13 - Creating Site Content

Here is my Freckle pulse from last week:

That is 25 hours. Most of it was content creation for my new SiteBuildIt! site. The site is up, it looks fine and I'm proud of it.

It does not have much traffic yet, but I am already scoring a tiny stream of visitors from some Google searches.

Creating the articles is great fun, although I think I'm maybe using a bit too much time for them. But I try to create unique articles that give great value to the readers. With SiteBuildIt! it is easy to pick subjects for articles and the tools make sure that the articles really get into the lists when people search for them.

This week I'll start my second vacation for this summer. I'll probably cannot keep my hands off my SiteBuildIt! site content, but you won't be getting updates in this blog.

See you in 4 weeks or so!

Wednesday, August 8, 2012

Market Samurai Tries To Kill Free Google Keywords Tool

Several people have recommended Market Samurai to me. Of course I was excited to see if I could get all the data I need for keyword research from a single tool. So I checked it out. 

I was sorely disappointed - enough that I have to boycott it.

What Is Wrong With Market Samurai?

When I started up the Market Samurai it asked my Google Adwords account login name and password. I have a major problem with that. 

I don't just give out my credentials to anyone. This software is installed on my PC where it can access web any way it likes.  

Worse, letting someone use my credentials to access Google Adwords API emulating user input violates the usage agreement of Google Adwords. That is a real problem. 

I Don't Want To Mess Up With Google

Traffic from search engines if the lifeblood of passive income business. Messing up with Google is a bad idea. A very bad idea. 

I'd love to say that the internet frees little bootstrapping companies, small businesses and individuals to take power to their own hands... but most of us get the lifeblood from Google and Microsoft, through their search engines. I guess there are some people working through social media who are not dependent on organic traffic. But most are. I surely am.

But... you say... The Google Adwords Keyword Tool is free, how can I violate anything?

Google Adwords Keyword Tool JSON API Is Not Free

Yes the Keyword Tool is free for human use, but the interface that external applications should use is not free. 

In practice Market Samurai is not using the pay interface, so the creator of the program may assure you that everything is fine. But that is like saying, 
"No I'm not trespassing. Yes, I did notice the sign at the gate. But Sir, I did NOT come here through that gate - I came over the fence."

The deal is, programmatic usage should be paid for. I'll bet that is how Google sees it. 

What Google Could Do?

Nowadays it is a common practise that applications and interfaces are opened up for non-commercial use and commercial users must pay. I like that business model as it helps common people to have free tools. 

If I had written and published API as free for non-commercial use and then someone would make a tool like this, I would be pissed off. I would be REALLY pissed off. I probably might consider closing up the free version. Google is a big company so maybe it can find other ways to plug the leak, but the risk is there. 

If offering the free tool makes it possible to bypass the pay-part, and lots of people do that, eventually it is worth closing up the free tool. 

So there is a real risk that eventually Google will consider closing up the Adwords Tool. Or they might opt that you need to have a company to access it, like Microsoft has done with their tool already.

Or, Google could just detect the traffic pattern that Market Samurai creates and ban those accounts. 

It all depends on how big a problem they think this is. 

How SBI Deals With The Same Problem?

SiteBuildIt! uses data from Keywords Tool too. 

To get the data into SBI tool, I first have to export my keyword list from the SBI tool and then log in to the Google Keywords Tool manually. I use the options in Keywords Tool to import my keyword list. When I get the results I'll export them into a file. Then I go back to the SBI tool and import the data there.

It is a bit complicated, but it is legal. 

Of course the same approach would not work for Market Samurai.

What Market Samurai Should Do?

The first thing that came into my mind was:
 "Why don't they just pay for the usage? Why take this risk?"
It just don't make any sense. They take a huge risk - and their customers take a huge risk. Worse, I'll bet most of the customers won't even realize that something is wrong.

Then I realized that the Market Samurai software is sold for a fixed price. It would not be a wise idea to let people pay once and then cause you costs forever. Also, it takes time to reprogram the software to use the gate instead of jumping over the fence.

I think that Market Samurai would need a major face-lift. It should be redone as web service.

It could utilize the "pay per use" subscription model. They could have, for example, a basic subscription with certain amount of searches per month. Then there could be a more pricey pro subscription option with higher amount of searches per month.

Overall, I do like the idea of Market Samurai and I'd love to have a tool like it. 

But the fact is - until the Market Samurai plays fair, I will not be using it.

No, I don't like to write negative posts. This has been laying in the drafts like a month already. But then I realized that not all people know that Adwords API is a pay interface. So if I can help people by providing this information, maybe it is worth it.

Sunday, August 5, 2012

450% Increase In My Passive Income! (July 2012)

This was an amazing month. I'm now proceeding full speed and really enjoying the process. I've been smiling more than ever and I'm having great fun.

This months Freckle pulse says that I spent 71 hours on my passive income project.

Passive Income In July 2012:

Income is coming from AdFly, affiliate sales and a donation.

Costs In July 2012:

Costs include the monthly payment to Getting Rich With eBooks 3.0 and SiteBuildIt!
They also include one new domain name, reserved for one of my Blogger blogs.


  • Two new passive income sources opened
  • I joined SiteBuildIt!
  • Finding my "voice"
  • My SBI! site is up
  • Networking

Two New Passive Income Sources

My passive income grew from 4 dollars to 22 dollars this month. That is an increase of 450%. Percentages are just fun, aren't they. I hope to see similar over-exponential growth in the future too.

It always feels special when I get money from somewhere I have not been able to get it before. This month I opened two new sources.

I got my very first donation. It came from my other blog and it was actually given by a person whose work I admire myself. I was glowering the whole next day although I also felt a bit awkward too. It would have been easier to accept a donation from a total stranger. I wonder why?

I also got my first affiliate sales. Maybe it was you who bought SBI! though this blog? Thank you so much for reading my blog and supporting me. Getting those sales felt even better than the donation! Why? Because it is not only money. Getting an affiliate sale means that I have been able to help someone. It feels better than doing a product and just getting paid afterward, what the donation practically is about. I like helping people, it just feels good.

Yes, this blog is full of affiliate links. I put them where-ever I can. World is full of affiliate programs, so I don't have to do any compromises in my writing - I can just write what I want and stick the affiliate links in. For example, the AdFly link in the beginning of this post is an affiliate link. I would have mentioned it anyway, now I'll just get pennies if someone joins through that links and earns with it. You win - I win. I love this game.

I Joined SiteBuildIt!

How did I get the affiliate sales? You do know I have had affiliate links up for some time already. I think I got those sales thanks to SiteBuildIt!

The course contains a book that taught me how to write articles, call-to-actions and copy-writing. While I don't polish articles in this blog much, I practice the concepts from that book. I think my writing has improved much - and so others are more prone to listen to me. Writing is now easier too.

I now also know how to implement the call-to-action pattern and if needed, link several pages to create it.

I used to think that a good product or service sells itself. So I was a bit reluctant to learn marketing and all that jazz. I don't think so anymore - a good product can just sit there somewhere on a corner of the wide wide web and no-one finds it. Suddenly reading about marketing is fun - the information is really useful and SiteBuildIt! presents it in a way that I can see the benefits and apply it to practice immediately.

Finding My "Voice"

I did not realize before that I should try to pour some "me" into my writing. SBI! helped with that too. Now I'm slowly learning to write in my own personal style. I must admit that I enjoy writing more now.

Enjoying writing is a good thing, since I'm going to write a whole bunch or articles to my new site. That is what I am going to do next.

My SiteBuildIt! Site Is Up

Yes, I have my own site online already. It has been up about a week now and attracted over 100 visits.

I'm not going to tell you the exact URL or what the site concept keywords are, not yet.

It concentrates on selling an affiliate product. It is a product I love and have been using for years. I just never thought I could make any money writing about that subject. I used to think I need to have a superb new idea or make something "commercially useful". But now it seems I will be able to make money just by writing about a topic I feel passionate about.


This month I've communicated with a lot of really nice and super interesting people, both online and offline.

I got some invaluable help and advice from Rebecca, who originally gave me inspiration for my SBI! Site Concept. I wrote to the creator of my affiliated product and got back the most genuinely friendly customer support response I've ever had. It will be a joy to sell her product. In addition, I discussed with several inspiring entrepreneurs, including a person from a company that recently was judged to be the start-up of the year. Also, I've mailed with successful SBIers.

I'm starting to see a pattern here. Are most successful people smart, flexible, helpful, friendly and happy? Now, I've really enjoyed meeting these people. Before I used to meet this kind of persons maybe once in two years. Now they are everywhere!

The Challenge

The challenge right now is the time. SiteBuildIt! is a tortoise. I know I can make money with my topic. I just don't know if I'm fast enough to achieve my goal. I still have high hopes. Reaching my goal with my SiteBuildIt! site does require that I get traffic faster than average SBI site. But I'm good at getting traffic. We will see.