This is a guest post by Ryan Stewart
No matter what anyone says, online business is not about the keywords, tags, web 2.0, products, or user generated content. It’s not about traffic or search engine optimization or even monetization.
Online business, like any business, is about managing risk.
A recent post on Shoemoney.com forced me to think about how I was managing risk in my efforts to make money online.
Though my parents might disagree, I’ve never been an extreme risk taker. Like every other boy my age, I used to do crazy things on my bicycle like jump ramps, frame surf, ride down steps, and other things I’d seen on the movie RAD (I still want to be Cru Jones when I grow up). But those risks were all very calculated ones.
I controlled the speed. I controlled the height. I controlled the bike.
Even those calculated risks weren’t without failure. I still wreck my bicycle about once a year, but I know what a wreck feels like, and I know that I will most likely be able to recover.
For the past year or so I’ve wracked my brain to figure out how I could make my online earnings grow. I was on a plateau – until I read the final sentences of this post. Jeremy drew a line in the sand and forced me to think about how I was managing risk in my online endeavors.
Later in the week an opportunity for me to cross this line in the sand appeared when John Chow decided to sell a 300×250 advertising spot on his blog for $1000.
Here’s how it went down.
RiskAverseRyan: Dude, you don’t have $1000 to lose. Walk away now.
CalculatedRiskRyan: This ad is undervalued. You know you could sell it for more.
RiskAverseRyan: Your wife will kill you if you lose $1000.
CalculatedRiskRyan: John will love this idea. You’ll get days of traffic from this.
RiskAverseRyan: You don’t even have a product. What are you going to sell on your landing page?
CalculatedRiskRyan: Shut your hole. I can do this.
So I bought the ad space for $1000, re-listed it for $1500 and sold it two days later for $1250. And here’s what I earned…
- 1000 points on my American Express card
- Several inbound links from bloggers who enjoyed the saga
- 3 posts on JohnChow.com highlighting the series of events
- Over 1200 page views directly from JohnChow.com readers
- $250 cash money (that I’m using to take more calculated risks)
- A great story to tell (you’re reading about it on Shoemoney.com, right?)
- Credit for successfully negotiating the world’s first ad flip
- Spill over traffic to the other sites in my network
- Loads and loads of miscellaneous buzz in the blogosphere
In addition, the risk forced me to sell a site that I’ve done very little with for over a year. I needed to hedge my bet, so I listed the site for sale at $2500. And it sold for $5000. Mo money. Mo money. Mo money.
So if you’re complaining about not making enough money online, stop complaining and start thinking about how you can take more risk. Write down the pros and cons of the situation and weight the results of success against the consequences of failure. In most cases, failure will teach you enough to make the risk worthwhile anyway. If my ad had gone 2 weeks without a bite, don’t you think I would’ve done everything in my power to convert the traffic? Definitely.
Don’t be stupid with risk, but don’t be a sissy either. If doing it doesn’t make you a little sick to your stomach, then it wasn’t risky enough.
Are you taking enough risk in your efforts to make money online?
Ryan Stewart blogs from time to time at Eleven21.com and is on a quest to pay for medical school through passive income he earns online. He’s responsible for what’s been called “The World’s First Ad Flip.”
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More risk, more fun
I guess it like the casino, don’t take the card if you don’t have a plan B
never tried something like this!
Work smart, not hard
V
Its been going on from day one.
Sorry but the first ad flip was done on forums years ago.
I used a sig link that read “this space for rent”
Someone else took the idea and rented the ad space.
Sorry you are not the originator of ad flipping as much as you might think you are ;->
Peace!
Pretty good post, its so true, no pain, no gain
Not bad risk… I am also starting some risking but it is investing in long term projects which should bring residual recuring income.
Incredible idea. Great job.
I dunno if you all read Aaron Wall’s SEOBook blog but he’s being arguing this for a while now…
I thought the one by the kid was decent too, but perhaps too basic for most. This one is definitely written well though.
Well by that logic any arbitrage is the same thing… in fact, business is about this!
huh??? Not sure I understand what your asking
what does this mean?
Buy a slice and flip it again
Since when does britney read shoemoney?
Yeah, its been done many times
yeah he made a ton. Cant wait to see what happens next
As long as you stand to make multiple times more than you spend… you’re going to come out on top most of the time :S
Just GIVE’ER!!
Nice flip.
I’ve never though about doing this before, but as some other commenters have said this is essentially what adsense is. You did it on a single ad space, instead of across the whole internet.
Maybe there is a market for this type of service though.. an ad broker that gets the blogger more money for his space then adsense would give him, and gets the advertiser more targeted advertising.
A human powered adsense.
Yes, because everyone knows that it truly sucks to earn a near-instant 25% on an investment when you can deposit that same money in a savings account and wait a year to earn 5%.
Why would that be worth congratulating lol?
MSN has flipped ad space on Facebook before this guy, so he is definitely not the first.
Who would search such a term?
What about the risk you took to rip your domain name from eleven2.com?
Taking risks is a good thing…as you learn how to avoid it in the future. I’m still taking baby steps these days but hopefully I’ll be able to learn from those small steps and take a leap soon. Great post!
nicccce… great post starts up the creative juices!
This is something I’m working on also. I’m very grounded when it comes to business, but have seen the payoff of taking some risk and feel I need to take more myself.
Nice!! I can see it now after the world’s first ad flip, there will be a whole new online ad flipping craze. Now onto the countdown to Ad market meltdown.
Well Done
It is stressful if you are expecting to make your income from odd things. The consistent results are less stress, but any extra is always fun. Kinda like winning the lottery or a slot machine.
You put out $1k to make $250? HA HA HA HA. You silly man.
Great story and I really don’t understand what planet the negative commentor is on. Maybe he got his hands on some of the drugs the neighbours think Shoemoney is selling.
What you did is brilliant. You made a profit from the site and your ad. And you’re getting heaps of publicity from it all.
Plus, you’re a good writer, so heaps of people will probably check out your blog after reading this post.
well done with this m8 I didnt even think of doing it. I bet this will be a regular thing month by month on john chow now.
If you think about it all PPC is really the same thing. Let’s take adsense for example. They pay you to have some ads up and someone pays them a little more.
It is dali, but that is only half that picture. He is standing next to his friend Man Ray while they were in Paris. It is a photo by Carl Van Vechten.
He is not (beep) as you say.. Thats how John Chow called the post. What he did is, buy the spot, sell it again, gain traffic, gain publicity (as he says, you can see his link here too). So, is he (beep)ing you or anyone else here?
He just explained HOW you should really think about risking and grab the idea on-the-fly.
Well done Ryan.
John Chow posted an interesting follow up to this regarding the sales curve and why the person is reselling (flipping) it on again.
Because you can make money from it.
First ad flip? yeah right. Stop bullsh*tting us with your garbage.
John chow predicted this buzz, he sure was right!
I’ve been reading fatwallet for years. Nice place to find deals
nice score man. now just keep up the flippin and after some time, I bet you become a pro at it and start your own ebbok:).
I think the same. People will try to flip ads and then will lose a lot trying to do this.
However, it’s a nice story to follow.
no doubt… they yank the rug out from under you and it makes your head spin…
I think it is… I have a book and i’m looking for the same picture I swear I saw it in there…
where else is this posted? I want to read about it more… I missed the whole saga
I was thinking this could not have been the worlds first ad flip too but he may get hits on that keyword phrase from people writing it over and over again on this thread…
I couldn’t have said it better!
Yeah nice story. I’d rather try and make a solid income flow than earn the odd bit of arbitrage though to be honest. But it’s definitely nice to earn off odd little things like this.
I don’t really like Johnchow.com that much, it seems absolutely crowded, everything is tight together and you know. But this blog is definitely nicer to read, the ads are defined and it’s a nice clear design.
Arbitrage is excellent when you understand it – theres so many ways to make big money from it too. Congratulations on your achievement too!
Risk is always required to be successful. Gotta say – the John Chow Adflip was inspired
Or do what people who have been around a while do.
DON’T RELY ON GOOGLE
Yes, it’s Salvador Dali. Good catch.
Thanks for the comments everyone. For the record, I know this isn’t the “World’s First Ad Flip.” That’s why I linked to John’s post and continue to put it in quotations marks.
Part of what makes JohnChow.com such a popular destination is that he doesn’t shy away from this kind of hyperbole.
I’m still taking lots of risks in trying to earn money online. Technically, I’m competent. But I have a tough time implementing the details. Eventually though, I’m confident that I’ll develop a workflow that results in conistent income.
Cool post. Now just make deals like that with a few dozen publishers, mark up your adspace, and you can be your very own ad network.
Once I make enough online I’m moving into the more stable world of franchising. It’s scary online. You can be making a load one day, then lose your Google rankings, and tank. It’s risky. If you do well you have to diversify into other online areas or offline areas.
Very good to see someone coming at online marketing from a classic business standpoint of risk analysis! Ol’ standby techniques really do work =)
Definitely not the first. As others have mentioned, this has been going on for years ( and much longer in the print/radio/tv world).
However, being first is not always the best. Sometimes just being the “first” to be well known or introduced to a certian niche market is more valuable. This has generated enough hype, clicks, cash, PR, etc that it deserves credit.
Yes, yes it is. Good eye.
Nice post. I actually was on vacation when Shoe made the post about selling the hard drives so I had missed it. Thanks for referring to it.
Slickdeals and FatWallet are great places to pick up cheap items and re-sell them. I’ve done this with laptops.
this is a perfect example of arbitrage
i can actually see a lot of people in the blogosphere start selling more ad spaces using your story as selling point and more people trying re-sell ad spaces… (and you already know what happened in the real estate doing this…)
I think AdSense is probably the worst thing to put on such a niche blog… I think companies who have products that make money online with you could get 2=3x more
I knew I recognized that face! http://en.wikipedia.org/wiki/Image:Man_Ray_Salvador_Dali.jpg
theres risk in everything.
Great job but you’re definitely not the first. It’s been going on for years.
It’s been done before for sure. Just another example that you can arbitrage anything. Nice work publicizing it though!
Very nice guest post. It was inspiring in a way. I think it is a little weird to “in essence” make money from something that is not a product or service.
“the risk forced me to sell a site that I’ve done very little with for over a year”
Where did you list your site for sale?
Is that Salvador Dali?
The owners of that add have been making so much money. Adsense wasn’t even generating $1,000 a month for the spot.
Well John Cow Earned 1000$ , thats more than what you earned .
This was a great story and one I followed avidly. Was a fun of fun waiting for it to get flipped and then seeing it actually happen.
yeah but that guy had something to sell, this was strictly flipping… still, nteresting story regardless
That was a terrific saga! I read it on John Chow daily. Good job!
Good Job !
But I wouldn’t say “The World’s First Ad Flip.” people been doing that for years
Cheers
MyZine.com
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I don’t know if I could have dropped $1000 on the ad space in the first place. I’d be ripping my hair out the whole time before it sold, just from being so nervous. Some people are good at dealing with high risk opportunities, and others (like myself) aren’t.
Actually, this happens often. All over, people and agencies buy ad space off of a publication and sell it for a higher price. I’ve done it a number of times in the Macintosh website market, when I needed to push more impressions to large campaign buying agencies that represent big media buys.
Best guest post I have ever read on Shoemoney. Cool story, though I can’t understand why someone would pay $1250 to advertise on John Chow, that blog is crap.
Your risk def paid off! I have been reading about this all over the place.
as the old saying goes Something that doesn’t come with any risk usually doesn’t bring much of a reward. But something with larger risk brings a larger reward.
Good Job on helping to run up the value of John Chows adspace;)
Neat post/series. On the flip side, I think there are a lot of people who don’t evaluate the risk/potential ratio enough. A lot of people make impulse buys/decisions, going with their gut. Some might call it an acquired skill to weigh the opportunities, options and possible outcomes and in many ways it DOES come from experience. But, it’s also a talent – like reading people in poker.
In any case… great work and congratulations on your “win”!
Can’t have been the first ad flip really? Maybe the first publicized?
In any event well done, the person who bought it from you has made a freakin’ killing though.
And the guy who bought the ad made like $10.000 and is selling it again. Now that’s flipping the ad.