10. Crypyocurrency – Risk and Volatility

It pays to remember that Bitcoin and crypto-currency is in it’s infancy. The value of a Bitcoin is highly volatile and is highly unpredictable over the short term, so it should not be regarded as a way of saving money. Only try it out with money you can afford to lose. Personally I believe it will evolve to the point where financial control is wrested away from the banks, governments and a clutch of super rich with the power to manipulate the market. Like all investments, anyone getting on the ride early could reap the benefits as it grows. However, we are breaking totally new ground here. It is also likely that cryptocurrency could out perform fiat currency and be a lousy investment but useful only for short time transactions as an “on the spot” measure of value, rather than an investment instrument. For all we know, it could have passed it’s investment peak now. For my money, there are better investments that conserve the value of your hard won savings.

Initially the concept of Bitcoin took off and other cloned versions vied for leadership. It was viewed as shady and branded as a way crime would launder money, in it’s early days. Banks refused to recognise it, effectively making it valueless in the real world. Today several banks are looking at participating in Bitcoin. These ups and downs in perception have reflected in the price of a Bitcoin.

Recently several European and Australian Banks have quietly begun to purchase Bitcoins. The Commonwsealth Bank of Australia is looking into Bitcoin at the moment.

I believe that it’s only a matter of time and crypto currency will take over from the banks, leaving them to be expensive safe deposit houses. The world needs a universal currency and nationalistic pride will never accept any one currency. The answer is a cryptocurrency like Bitcoin. Currently we lose millions in transfer fees to transact overseas. Why? We’re not loading gold onto ships any more; it’s purely digital data these days (the price of an international, micro seconds long, phone call)  but we are still paying the fees fixed in the pre-computing days when it was shipped in a flotilla with armed escort vessels. With Bitcoin it will cost no extra to transact at home or overseas. The banks require staff to do this, so they can never compete with Bitcoin.

The important consideration is, there is a maximum number of Bitcoins. There can only be 21 Million Bitcoins. Unlike currency, no-one can make any more. Over time as more and more businesses come to accept Bitcoin, the demand will increase and being capped at 21 million means the value of Bitcoin should rise proportional to the demand. If the same happened with the US Dollar, for example, the Federal Reserve could print more money which would drop the value of the dollar. No-one can do this with Bitcoin.

As in all digital matters, with time any system becomes open to vulnerabilities, so you need to keep your software up to date. I would not suggest you transact in Bitcoin on a system using Windows XP, Windows 7 or Ubuntu 13.04 Linux. These operating systems are no longer supported for security updates and would invite hackers to steal your wallet. If you prefer these old stalwart systems, transact using a smartphone with updates and store your stash in a cold store,  hardware wallet that is removed from your system, the moment the transaction is complete.

Creating a residual income – Advertising frequency

No-one wants to look at a page full of ads. On the other hand, we want to get the most from each page. The art in all this is to use the right type of advertising media that suits your content, the least times on your page. We are after a balance where we want the reader to absorb the content and feel like they are not being assaulted with lots of advertising.

Advertisement frequency – The advertisers will tell you that lots of large video ads work the best. Don’t be fooled; there’s different types of advertisements for different situations. You won’t look at a page that is full of ads and difficult to find the content you are looking for. If I came up in a search as a top ranking food site for pet advice and you see a page full of advertising, you will backtrack and go to the next site in your search results. All that SEO work to get on page one was wasted. This is a common occurrence on the Internet and has become so bad that people are starting to flick past page one of the search results and begin looking at page two or three.

You need to place the adsvertising so that it spaces your content, not replaces it. I would limit the number of advertisements per page, to approximateley 5 with a maximim of three visable in any one screen load.

Any more and the reader feels they are in a minefield. Keep in mind that most readers will track their reading with their mouse, so are vulnerable to accidentally clicking it once in a while. Ending up on another site because they inadverdently clicked your advertisement, will leave them feeling conned.
And while we are talking about content, there’s one simple rule to remember when designing content – People avoid reading. So, break up your content into bite sized paragraphs and avoid lots of lines of text. (We’ll look at content design more on that later in a later article). A banner add every so often, between paragraphs, espacially at the end of one topic before you start another, will work well.

Making Money On-line – Content Advertising

We call the act of tuning a website to generate money, “monetizing. Content advertising is probably the first monetizing method you will encounter. It’s simple and requires no extra work, once the required code is placed on the web page but there’s a few points you need to know first.

What is it?

Technically speaking, it’s a small block of code that you add to a web page coding, that allows an advertiser access to a predefined space on the page, to place an advertisement. That space can be a piece of text, an area for a still image or a window for a video clip.

However it’s a bit more involved. As the publisher of the web site you get to call a few shots. You can choose:

  • The colours of the ad content (except of course with video ads), so it blends into your overall web page. Be careful here though; many sites try to make the ads appear as if they are part of the normal page content, rather than advertising. Don’t do it. It can leave your visitors feeling deceived and that will influence their overall impression of all of your website. Coordinate the colours enough so the advertising looks like it belongs on your website but is still obviously an advertisement and not mistaken for normal content.
  • The size of the advertisement (from a range of sizes supplied by the advertiser). Most sites use a panel to one side for navigation purposes. You can make the waste space under those navigation buttons pay by fitting tall column advertising there or use a wide banner advertisement to separate one section of content from another.
  • The advertisers who you don’t want to have on your website. It makes sense if I have an online auction website, not to feature advertising for eBay, my major competitor.
  • The advertising format – some sites get better results from text links, others do better with pictures and some work best with video. If your site contains lots of pictures, a picture advertisement will compete with the content or it could get lost within the page’s content. In these cases a text advertisement will yield better results. A video advertisement could be a distraction from the site’s content, in some cases or it could break up a large boring section of text into more manageable blocks.

The content of the web page influences the advertising that will be displayed on the website, so there’s some sophisticated progams (called bots) that read your page and discern the topic and how relevant it will be for certain ads.

The largest supplier of this type of advertising is Google and they call this type of product Adsense. In terms of payments, there are two systems that generate money: PPC or Pay Per Click and PPA or Par Per Action.

  • PPC or Pay Par Click works on you receiving a small commission each time someone clicks on an advertisement on your web page. It’s only a small amount each time, so don’t bank of an early retirement.
  • PPA or Pay Per Action relies on the visitor clicking on the advertisement and completing some action afterwards, like purchasing something, filling out a form (e.g. adding their details to a mailing list). Of course it pays a lot more that PPC but you get less strikes too. Again, don’t plan your early retirement around this one either.

Keep in mind these generate small incomes only, so you need a lot of sites with ads. To optimise the responses to your advertising, it’s important to know which areas of the web page will get the best responses. For example, we always start at ther top of a page, so this is a hot area for placing an advertisement. We rarely look at the bottom of a page that is hiddern below the screen so advertisements down there score less hits.

To give you some idea of Adsense income, a good website (2000+ unique visitors a month) can yield approximately up to $20 a month.

In the next instalment we’ll look at maximising your advertising for the best income.

Making money on line – the truth – Part 1

The Internet is awash with tales of amazing wealth, created overnight with simple work from home systems. The advertisers seem to favour one of two methods – a picture of a billion dollar yacht or some car that looks like it should have come from a Batnman movie, with the tag, “Watch this video before it’s banned”. The other favourite is a picture of a young woman or man with a pile of notes or fast car and the tag, “Melbourne Mum earns $653 a day”. Of course the district the Mum lives in will change to a town near you and the income amount will vary.

The truth is, there are no free lunches and that applies to the Internet too. While there are those who made their millions on the Internet, they did so by creating something unique that most people wanted. Simply creating a website and expecting it to sell something and make you an income, is fanciful. It’s not that simple.

The fact is, even a top performing website will net you around $15 to $20 a month. To make an income, you’ll need to run 20 websites. They don’ t tell you that.

The websites themselves have to be specially designed to appeal to search engines, more than your simple WordPress site. They have to be specifically designed for SEO (or Search Engine Optimisation). The site has to be rich in popular search words that relate to the site’s topic. Then there has to be a lot of other sites linking to it, to convince the search engines it is an authority on that subject.

It doesn’t stop there; you will need to pay for Adwords as well. These are words that people use to search with when they are looking fpor something on the Internet. They are auctioned off and the successful bidder will get traffic (searchers) directed to their site when their word is used in a search.

Then you can pay outright to have your website display on the top of a search engine page. These are “Sponsorsed pages”.

If you are thinking of deriving an income from a website on the Internet, you can but be prepared to work at it. It’s a job, just like everything else.

Over the next few instalments, we’ll look at some of the ways to make an on-line income.

Online shopping – definitions and some fine tuning

Previously, I mentioned eCommerce software and POS Systems.A few readers commented they were not familiar with these terms.

If it sounds like Geek-speak here’s some explanations

  • eCommerce software is an on-line shop. Goods are arrayed in either a matrix or a scrolling window and information about the item is displayed as a caption beneath, including price etc. The more sophisticated packages allow for extras like discounts, loyalty points, multiple purchase discounting and wholesale pricing
  • POS software basically turns a computer into a cash register with Z readings, categories etc plus inventory management and a range of other businet functions.
  • These systems are usually a major financial outlay for start-up businesses because we tend to think they require a degree to set up (not so). Usually a business will be slugged with a fee for the package and an ongoing fee for maintenance. They don’t require much maintenance once set up, usually only adding new product and removing out of stock items. They are available free as open source software packages, either as stand alone (totally independent), cloud (based on software on the Internet and you add or remove data) or Freemium (you get a simplified package free and you pay to be supported/updated/added to).

Using an escrow service

We hear horror stories of online rip-offs, especially when it comes to paying for goods that don’t arrive.

Using an escrow service like PayPal will help show customers you are genuine. The service acts as a middle-man, releasing the funds when the goods have arrived and offering a refund service for defective products.

The truth is, without an escrow service there can be rip-offs on either side. You will also need an EFTPOS facility, so people can pay directly by credit card.Later you will need a secured site (SSL) and a VPS if you are handling credit card data.

To set up an online store, I suggest you begin with a simple website first and attach the online store later. Finally a POS system if you want to take payments directly.

As I mentioned earlier, set up a landing page immediately you get a web host. This allows you to ‘age’ the site. You can put up a few pages as a teaser for what is coming. The search engines will be alerted and begin ranking your site. They use a variety of criteria to rank your website and age is an important one, so get a page or two up on day one and mention what your business will be doing on the Internet.

I have created several online store websites myself. It’s not hard once you have done it once but for the hours you will spend, that would be more productive in your business, I strongly recommend hiring a web designer.

Personally I would not recommend any new business to start off with a web store. If you want to move stock and generate an online presence, use eBay, Gumtree, Trade me or some other buy-sell-swap site in your area – it will cost a lot less.

This will give you a chance to test the market first.

Operating Systems – What do you get for your money?

I bought a laptop for our business and it came with Windows 7 and a trial version of Office 2007. It was on a special deal and inclusive in the price, otherwise I wouldn’t have bothered getting them installed.

You see, I was cured of Windows back in the Vista days. So much hype and so few drivers. Out of desperation, I installed Ubuntu. The HP printer that was dormant under Vista fired up, the Internet router now had options of wireless or cable connections and a host of other problems vanished. I went exploring and discovered that not only did I have a full operating system but I also had a full office suite as well (not a separate expensive package to be installed separately, like with Microsoft’s Office 2007 package).

Anyway – I tried Windows 7 and have to admit it was a vast improvement over Vista. Unfortunately it still does not match Ubuntu by miles and here’s why:

  1. Firstly, of course is the price. I actually had to pay for Ubuntu (which is normally free) because our Internet is so lousy, it would probably be a faulty download to get it on line. I had no option but to buy the APC Magazine because it had a fill version of Ubuntu 11.04 on the free DVD that came with the January 2011 edition. Windows would have cost me about $75.00 at that time, for the student edition.
  2. I get a full operating system with Ubuntu which might not sound like much but it includes a business Office suite as part of the operating system. In Microsoft’s world (a.k.a. Hell with flourescent lighting) that Office suite would cost me at least twice what I paid for Windows!
  3. Ubuntu loads in 32 seconds, Windows 7 takes double that time and up to 3 minutes if it demands to check my drives for errors.
  4. Shutting down Ubuntu takes 15 seconds. Windows can take a minimun of 45 seconds and has taken up to 42 minutes if updates are installing.
  5. I have control in Ubuntu. In Windows, it takes over my computer and allows me to do some things when it’s not updating or installing updates.I was giving a presentation, a Powerpoint slide show to a group of IT undergraduates. I powered up the computer and was greeted with the “Installing Updates – 5% of 135 files” message. For the next 14 minutes I had to ad-lib, to an IT lecture group! I could not postpone the updates installation. Ubuntu informs me if there are updates, gives me the option of postponing them and gives me the extra option of installing them on another desktop (or workspace as they call it). I would have been able to run the slide show while the updates installed in the background.
  6. I use a wide screen display and Ubuntu automatically sets it. Windows 7 doesn’t. I get icons that need to go on a weight loss program or a normally proportioned image central in the screen, with two black bands at each side. To get the best result I have to set the screen size manually.
  7. I dare not use Internet Explorer when I’m on Facebook or eBay and have to be very wary of emails with attachments. There are so many viruses out there. In fact if it wasn’t the only way Microsoft will agree to keep me secure with updates, I’d erase Internet Explorer completely. Accordingly I use Ubuntu for my Internet surfing – viruses just don’t work in Ubuntu. The system is far more secure and the evil programmers who write viruses want to hit the greatest numbers of computers, so they write them for Windows at around 75% of all computers, rather than Linux at 2%.
  8. There’s the “supergeek” prestige among IT people when you fire up your linux system that looks so cool , while they get the POST beep on their Windows system. It’s the penultimate proof that you really know I.T. In my line that enhances one’s credibility before I have said anything.

Everything I need to run our business is there but to be fair, there are some really cool games that won’t run in Ubuntu. All the online games do. Some experts might say there is a work around but to me a workaround is a sign that something is faulty.

To summarise: My $9.99, (let’s call it $10) got me everything you paid at least $200.00 for.

So, as one business person to another, what did you get for that extra $190.00 ?

Video Promotion

There’s a large collection of articles on the Internet for making a video clip for You Tube, so I’m not going to discuss the mechanics of that here.

You’ll see lots of so-called experts claiming that you can make a fortune using video clips for marketing and product promotion. You can create a really popular clip, post it on Youtube and reap a fortune from syndications. What those articles don’t tell you, is how to turn it into a successful money making promotion.

Let’s look at two scenarios – (1) video as a promotional tool and  (2) video as entertainment.

(1) As a promotional/demonstration video
Videos are perfect for demonstrating or describing something, much like a picture is better than words but they need to be part of a whole package. They need to be backed up with something more enduring. The little things in the video are soon forgotten when it comes to actually doing it yourself. We tend to forget the tiny things and when we try and reproduce what we saw in the video, it all goes wrong. When we use it to describe a product, we tend to forget the finer points. The answer is to treat the video as part of a package.The video is the introduction and we back it up with a fact sheet, recipe or step by step instructions. The customer sees the video and likes what they see – they are emotionally on our side but in an hour or two the emotions have waned. Given a fact sheet as a physical reminder, will reinforce those emotions. The fact sheet needs to outline the benefits for the customer. If it’s a list of steps in a process, it should also promote the end product and the benefits for the customer.

How to video clip

In this scenario your profit comes either from the product you are demonstrating or the plans/manual you are selling, that outlines the “How-to-do-it” process.

If it’s demonstrating a product, make the video and fact sheet free. Offering a promotional discount is a great drawcard here. You want them to go viral if possible. Have a good critical look at yourself and ask yourself if you would buy of some looking like you. Keep in mind we always think we are more appealing than we really are. If you honestly have a shred of doubt, get someone else to do the demonstration for you – someone who looks more relevant.  Set out a script. A story board works best and will keep you on track when the filming is in progress. If you want to look credible, consider your attire. A white lab coat works wonders if you are giving them information. Think of the whole message you want to communicate.

If the video is a “How-to” video and you are promoting a process (e.g. building your own letterbox) it pays to skip over a small part of the process in your video, so those who are too tight to pay for the actual plans, find it almost impossible to reproduce it, like in the video. At the end of the video, add a disclaimer like, “To keep this demonstration brief and interesting, we have only supplied a brief snapshot of the major stages of building you own letterbox. For a comprehensive description, get the plans and construction manual from . . .” A cunning marketing ploy would be to require the customers email address and email the instructional hard copy to them.

Once Again the whole Market Changes

Beware of old Internet Marketing Gurus offering the same old schemes – how to get found on Google, email viral schemes, affiliate marketing, etc. These are old hat and tired methods to create money on the Internet.

It’s very easy to find one technique, totally commit to it, devoting all your efforts, then find out the Internet has evolved and left you behind. That’s what has happened to many Internet marketers today. While they flog the old methods, the smart marketers are focusing their efforts on the new areas that are pulling in results.

Facebook was supposed to be a license to make a fortune. I was surprised to see some spam mail claiming it could market you to millions through Facebook, today. That’s fine if you want thousands of children, all with no job and no money. People who work have got over Facebook. They realised the games and comments were all so time consuming and check their Facebook page every now and them but they have moved on.

Twitter – this is hot right now but is becoming so full of blatant plugs for websites and other forms of advertising, that it will evolve into something else. If you are chasing traffic, this is where to focus your efforts for now.

The big money is currently in YouTube but you need to put together some good content. If it’s popular, you could go viral and in a month get over 1 million viewers. But let’s get real – who can come up with such good content?

The simple fact is, it doesn’t matter which media you use the same old rule still applies – people = money and if you create good content and it will attract those people.

Now the marketplace has evolved, Video content is more popular and usually easier to follow than static written content, however it cannot be reprinted in hard copy as teaching material or instructions. In many computers today, the inbuilt web cam is sufficient to film a video. Just make sure there is plenty of light and you are not in front of a light source, so you aren’t in silhouette when you are filming.

Start with a plan, don’t just ad-lib it. Give some thought to what you want to say. Should it be backed up with a printed version? Are any components known overseas by a different name? Am I using universal measurement units that all my audience will understand? Should they have some background information before we begin, so we are on the same page?

Am I the right person to perform the video (do I look the part)? What props will I need?
We have all seen ads where the business owner cuts costs by doing his own acting and they nearly always make him look like the sort of dork you don’t want to do business with. You come away with the impression that the business is so desperate that they will probably go bankrupt before their warranty expires.

When it comes to the actual content, if you are promoting a product or service, sell the benefits, not just what it does but what it will do for me personally. If it washes clothes, then sell me the time saving, lower price or reduced water bill.

It’s not just aim a camera, shoot and publish it. A good video requires a plan and preparation before the camera is even switched on. Do a screen test first to check the result looks good on a monitor. In the next session, we’ll look at packaging the video so it get results.