Continued from Part II…

Part Three: 2006 to 2010. Knock it all down and start again.

My return to Affiliate Marketing wasn’t exactly a joyous occasion, it was more of a firefighting experience. Balancing the books was pretty much impossible. I had £3,000 left on the company overdraft (which they refused to extend), and staff wages of £8,000 to pay on the 20th, along with PAYE of £1,500 and a VAT bill of £7,000 due at the end of the month. That was pretty much my first week back in the job. So I didn’t pay myself for four months, borrowed a considerable amount of cash from family and ramped up my own personal overdraft and credit cards to keep our heads above water and the remaining staff in a job.

Once we got over the initial firefighting, and the reduced expenditure that the redundancies and office closure brought kicked in, things actually started to get a little more comfortable, and I actually enjoyed being a bedroom affiliate again, knocking up websites and running things from my bedroom office again. Just as things were settling down, I got a message from Mark Russell that was about to shake things up rather a lot: “Would you be interested in selling Net Free Stuff?”.

He’d been chatting to Maz at IBG (then owners of Affiliate Future), and Maz asked the question. Mark promised to find out, and mentioned it to me. I asked what sort of ballpark figure they were looking at. Mark said that IBG were happy to put up around £100,000 for it. My gut reaction to this was to instantly say “thanks, but no thanks” – we’d actually turned down a few approaches several years earlier for more than twice that amount, and things were just settling down for us – the last thing we needed was another rollercoaster ride trying to replace the money that NFS brought in.

I chatted with Jason about it a few days later over a pint or two, and over the course of about an hour, we’d both changed our minds – Neither of us had any real interest in running NFS anymore – we ran it because it was our jobs, not because we enjoyed it. And given a big cash injection, we’d be able to pay off all the debt the company had built up in one swoop, and still have enough cash to start something new. It would mean a large dose of uncertainty, but also the chance for a fresh new start. A chance to “knock it all down, and start again, but with a big pile of cash this time” as I remember putting it at the time.

So we let IBG know that we would actually be happy to at least talk numbers with them, and we pretty quickly agreed on a price of £120,000. Once debts were paid off, solicitors fees paid, tax put aside etc, we’d have around £70,000 to “start again with”. NFS was bringing in around £5,000 a month profit at this time, so as long as we replaced that income within 14 months, and had no sudden unexpected large bills (more on that later…), all would be rosy! The due dilligence was a bloody nightmare, happening over Christmas as well, so I didn’t get many brownie points with the family that year! But we got through it, and finally completed the sale on 27th January 2007.

I’ll never forget the following morning, getting up to start work, logging onto online banking and seeing “available balance: £120,000.00″, and it then set in – we were no longer owners of a freebie site. The tag that had followed us around everywhere we went (I still shudder at the ignorant merchant who turned their back on us at a g2g with the words “I won’t waste my time talking to you - you run a freebie site”) was no more.

What the hell were we going to do now??

We had a plan of course. Pay off the debt, actually invest some time and money in existing sites such as Bingo Bongo and PrizeBug, and generally avoid burning out again. And of course that happened really smoothly.. not.

The aim with PrizeBug was to make it a much spammier version of NFS, but for competitions rather than freebies. Exploit the mailing list at every opportunity, but without doing the stuff that actually creates hard work and retains the strong community that NFS had. It’s been moderately successful, and still more than pays for the hour or so a week we spend on it. Bingo Bongo was a different matter – it was going to be our BIG project. The first thing we did was arrange a redesign (if anyone saw the previous incarnation, I hope your eyes recover soon), and as soon as this went live, we had huge budget to throw at the affiliate program, as well as PPC and offline promotion.

The problem with that statement? “as soon as this went live”.. Bingo Bongo was (and still is) a white label skin from Globalcom, and we were entirely reliant on them uploading any changes to the site. We worked with the template they gave us, and completed a redesign within 3 weeks. We handed the designs over to them and were told that there was “a short delay” for their techies to actually make the changes. How long is “a short delay” you might ask? A week? A month? Six weeks? No, all wrong. Eighteen months is how long it took them! Which, given we needed to replace the NFS income within 14 months didn’t work out very well for the huge budgets we were going to throw at it. Again, it makes a decent income now, but less than 10% of what it could have made if only we’d been able to get the redesigned site live in early 2007. Grrrrr.

But that was only a small grrrr. There was a much bigger grrrr to come at the end of March 2007. With all debts paid off, and work towards replacing NFS’s income underway myself and Jason went off to Amsterdam for an Affiliates4u/DFDS Affiliate event. Much was learnt, and some new deals were brokered. Things were looking up. Until I returned home to a letter from our landlords at the office we had vacated in 2006..

We actually had a lease until 2010, but with a break clause in 2007 that enabled us to get out “without penalty”. We exercised that clause, and as part of the end terms, the landlords employed a team of surveyors to travel down from Bristol (at £150 an hour and 40p per mile, payable by yours truly) to see that we had left the place in a reasonable state. At least that’s what I thought they were going to do. Turns out they actually thought that we could fully redevelop the property for them, and enclosed an estimate of the cost of doing so: £87,432 plus vat. Payable within 30 days. (a.k.a a sudden unexpected large bill).

Turns out the cheap lawyer we’d used when taking on the lease had left us wide open, and we were liable not only for the “upkeep” of the property, but to also retrospectively make improvements that should have been done 20 or 30 years before we moved in! More money was spent on solicitors (remembering this time that you get what you pay for when it comes to legal advice!) and we eventually did a fair bit of the work ourselves to bring the costs down (some examples of the estimated costs: “remove sticker from window: £60″, “empty rubbish bin: £250″, “remove poster from wall: £60″), but just escaping the nightmare of that office just cost us another £20,000 that we hadn’t budgeted for. Suddenly it looked like we needed to replace that NFS income sooner than 14 months…

We played around with several other sites, with varying levels of success, but after muddling through to mid-2008, we’d succeeded in just about replacing the NFS money and just about before it all ran out too! But I wasn’t happy with where it was coming from – it was still a lot of spammy, crappy stuff like the mailing lists and brand-bidding in the few places it was still allowed. I realised that we’d have to change our ways, and so remembering the initial point of selling NFS (knock it down and start again), I started creating some new sites, such as Away Grounds and I Love Algarve, that were genuinely useful sites on their own merits, and didn’t exist purely to try and make a quick affiliate buck. I was now going to be a pure content affiliate.

Of course building up informational resources such as these takes a long, long time and they can be hard to monetise, but then the days of making easy money are long gone IMO. This is a sustainable business that I can replicate and grow organically over the next ten years. They can survive recessions, which is another reason they were created. I could see that a recession was on its way by summer 2008, and so wanted to implement a price comparison widget into most of our sites. There was no way to do this on the networks, so I asked our techie if he could knock something up.

“Sure thing” he said, “I can amalgamate all the network’s feeds, and just pull the price info from there in a javascript widget”. Great stuff! “What else can you do with the info from the feeds?” was my next question. “Anything you want, as long as the info’s in there” was the reply, and if you’ve ever seen a cartoon in your life, you’ll know that this is the moment that the lightblub flashes into life above my head.. “So we could create our own content units, but for ALL the networks?”

And so Easy Content Units was born.. but that’s a story for another day…

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