I wrote a quick blurb on Snowdrop’s website describing the three ways to be successful in affiliate marketing.  Here’s my main point:

Beginner affiliate marketers rarely see high returns in their first few months because they focus too much on increasing sales volume and not enough on decreasing the cost of a lead/action.

I think it boils down to this: because online advertising is so easy to track, analyze, and tweak, it’s insane not to be ridiculously efficient when purchasing a lead.  And that’s what you’re really doing – you spend money on advertising to purchase a lead, and you succeed if the cost of that lead is less than the revenue generated per lead.

That’s why I’m always confused when I hear about companies that have fixed budgets for advertising.  In reality, a business should have a fixed budget for “experimental” advertising, but an unlimited budget for successful advertising.  For example, if every time you handed me $1, I gave you $2 back, would you cap yourself at handing me $100 per day or would you continue to trade me dollars for more dollars ad infinitum?

Snowdrop uses Subversion to manage and version its code, which up until recently was hosted on the Snowdrop dedicated server with separate bug-tracking software (Mantis) and still separate collaboration software (ActiveCollab).  Well, not anymore.

Enter Versions, Beanstalk, and Lighthouse to check out code, manage and commit changes, and track issues.  Then, combine Basecamp for collaboration and Freshbooks for invoicing with Google Apps for mail, calendaring, and document storage, and Snowdrop is completely web-based (and hosted).  No software maintenance = less headaches.

The interface actually makes me want to write.  I like the subtle colors and I like the typography.  Very clean.  Unfortunately, the new interface will require some re-training for a few clients at Snowdrop, which sometimes leads to resistance.  It’s hard to sell a new process when the end result is the same.

Overall, though, I’m very happy.  It could just be me (or a coincidence), but I’m noticing a slight performance increase since upgrading to 2.7.  A bonus.

Snowdrop Media is a big, online mutt, at least according to this pie chart illustrating revenue by source in 2008.

Website design services accounted for the largest percentage of revenue at roughly 40%, while both SEO services and affiliate marketing came in second with nearly 20% each.  Virtually all affiliate marketing revenue came from PPC advertising and partnerships with several content networks.

In 2009, I’d like to see Snowdrop make a stronger push into software and web application development and ease out of design services. There are a few things brewing around education and local business marketing that I hope to flesh out by 1st Quarter 2009, so things are moving in the right direction.

Overall, Snowdrop has seen tremendous growth over the past 12 months and I hope to continue that trend into 2009.