Affiliate Marketing is a weird little world.
It’s a great way to make a living and I’m glad I found it. But it definitely has some downsides as well.
I’ve seen a lot of weird stuff go down behind the scenes during my time here. And luckily, I’ve been able to avoid the big disasters. I did however get caught up in a scam once, when a guy told me about a “Dream Opportunity” and then ran off with all of my cash.
Luckily – it wasn’t enough of a loss to bankrupt me, but it wasn’t fun either.
Here’s what happened.
We’ll call him “Greg”.
Greg was an ad network rep that I met many years ago. He was working at a major network where I was doing tons of business and spending lots of money.
Greg was my day-to-day contact and had always taken good care of me. He answered his phone on the weekends (which is rare) and always told me about new opportunities that I was able to capitalize on many times.
One day Greg called me and told me he was leaving the ad network.
“I’m moving to an underground RTB (real time bidding) network that has figured out a loophole that will make a guaranteed return on your ad spend” he said. “For every $3 CPM you spend, you’ll make back $5-$6 automatically…”
The deal was so good he was also going to be buying traffic for himself and if I wanted in, he was willing to take me with him.
I told Greg I’d think about it, thanked for his help over the years and we exchanged our personal contact details.
A few days later Greg got ahold of me. He said “We’re all setup on my end, let’s get you started, all you need to do is pay for the traffic up front. Can you send a $15,000 pre-payment?”
Reading the email gave me a funny feeling.
A feeling I should have listened to.
That feeling is called ‘common sense’ and it can save you from doing some really dumb stuff if you follow it.
But of course, if I had followed my common sense I wouldn’t be telling you this story now, would I?
I replied to Greg and said “Let’s start with $5000 and give it a test, if it does well, we can go from there.”
- Greg agreed and sent me his wire information.
- I sent the money and waited to hear back.
- Days went by.
By day three I was starting to get pretty worried. When Greg worked at the big ad network he usually got back to me within an hour. A 3-day delay was out of character.
Finally, on Day 4 Greg emailed me. “Sorry for the delay, I’ve been setting everything up. We’re ready to go. Can you send in another $5000? I really want to secure more traffic for you. Remember, whatever you send me, I can guarantee you a 100% return with this loophole. And any sales you make on the traffic will be icing on the cake.”
At this point my scam radar went WAY up and I told Greg I couldn’t send him any more money until I got some traffic going and could prove the model worked.
Greg agreed and said traffic would start soon.
He was right. A few days later my Tracking202 system started getting traffic from Greg. It dribbled in about $100 worth of clicks to my landing pages and made one sale for a $35 commission.
If you do the math, that means that I lost $65 on the $100 spend. That was fine with me because remember, I was paying a $3 CPM and (supposedly) earning a $6 CPM on the backend, PLUS any sales I might make on the traffic.
So if I spent $100 that day, I automatically earned $200 + the $35 commission. That’s 135% ROI and not a bad deal in my book (if it was real).
I Need More Money
After the $100 spend, the traffic stopped again. I emailed Greg to see what was going on and he emailed back that they were having backend issues. “Don’t worry” he said, “this is going to be huge! Can you send in another $5000 so I can lock in more traffic for you?”
Black clouds started gathering around my head.
I heard thunder rumble somewhere off in the distance.
Now it was really starting to look shady. Never in my life had an ad network rep requested I send in more money before my initial balance was spent. It didn’t make any sense.
I had an idea of what was going on but I was still hoping for the best. I mean, I had all of Greg’s contact information, I knew where he worked for the last few years. I had this relationship with they guy that I thought I could count on.
I replied to Greg’s email, “There’s no way I’m sending more money in, until you spend what I’ve already sent and can show the return you promised”.
Days went by, no contact from Greg.
A week later I got a text from Greg. It was 11pm on a Friday night. His message looked awful, something like “Hey it Gret. Hop you’re doing well. Can you plz wire me anthr $10,000 tonite?”
When someone sends you a text message full of typos at 11pm on a Friday night it’s normally because they’re drunk.
Greg was probably drunk, texting me from the VIP lounge at a club and needed the ten grand to pay for bottle service.
I texted back that I couldn’t send him any more money until traffic was back on and we were able to prove the model. Greg didn’t reply.
Days went by, no contact from Greg.
Greg went totally unresponsive. I emailed, I texted and I called. No answer, no reply. Greg disappeared.
I contacted the old ad network where he used to work. I told the person at the network what was going on. She replied “I’m sorry but I can’t give you information about current or past employees, but I can tell you that you probably shouldn’t work with Greg anymore.”
Based on what she said, I figured that Greg probably didn’t leave the company for an “Exciting new opportunity” at all. He was probably fired because they caught him stealing money out of the company’s bank account or something. And after he got busted he came up with a desperate scheme to drag as many clients as he could out of the company with him so he could take advantage of their trust to make some quick cash.
Reality started to sink in.
The $5000 I had sent to Greg was gone.
Greg was gone.
The opportunity was gone.
My initial reaction was anger. I texted Greg a few times to let him know that my attorneys had recommend a lawsuit and unless he contacted me immediately I would proceed.
Know When To Fold ’Em
There comes a time in any bad investment experience (or playing poker in Vegas, buying a crappy car or trading stocks) where you have two choices.
- Sink more time and money into trying to get your investment back.
- Walk away and use it as a lesson.
I decided to go with door #2.
Luckily I had only sent Greg $5000 and that loss wasn’t enough to cripple me financially.
The time and money it would cost to pay a detective and attorney to track him down and sue him would cost more than $5000. It would be more profitable for me to move on and focus on making more money.
So I let the guy off the hook and forgot about it.
I didn’t really forget about it though, I kept his number in my phone for 3 years just in case I lost my mind one day and needed someone to unleash my wrath upon.
But luckily – that never happened.
I never texted or called Greg again. I deleted his number from my phone.
And these days, I really don’t think about Greg much at all.
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What’s The Takeaway?
A smart person learns from their own mistakes. But a really smart person learns from other people’s mistakes, so they don’t make them at all.
Here are a few takeaways you can learn from my mistake. Maybe you can save yourself from a bad situation at some point in the future.
- If it sounds too good to be true, it probably is. This phrase applies to every facet of life. If someone tells you that they have a “magical” opportunity or loop-hole where you can make money doing nothing, it’s probably a scam. It’s even worse if they tell you they can “guarantee” a profit. There are no guarantees.
- Never send in a large pre-payment to an unknown ad network. If you’re working with AOL and they ask you for a $10,000 prepayment, you’re probably fine. But if you get a call from ’24/7 Grind Ad Network” based in Nigeria it’s probably not a good idea. Keep your test budgets with new networks small. It’s always better to work with large, established networks.
- Don’t be greedy. Greed will get you every time. Even though Greg’s plan didn’t make much sense to me, my greed took over and I sent the money in anyway. Greed is blinding. Don’t let it trap you.
- Don’t chase bad money with good money. Have you ever heard of someone losing $500 in Vegas and then losing another $5000 trying to win it back? They’re spending good money to chase bad money. It happens all the time. In most cases you’re better off cutting your losses and moving on.
I’d like to end this post by saying that I wish Greg all the best in his life. I learned a long time ago that when people steal from you, it’s probably because they need the money more than you do. I mean, what if Greg had a daughter in the hospital and he needed the money to pay for her surgery? In this scenario, I can feel good about donating my $5000 to help save his daughter’s life.
But there’s another side of me that thinks Greg probably spent the money on booze, cocaine and strippers.
And in that case I hope Greg dies in a fire after being struck repeatedly by lightening.