Interview with Rae Hoffman AKA Sugarrae

I have been a longtime fan of Sugarrae's blog (and some of her old posts back in the day on WebmasterWorld). She has been on the to interview list for a few years and we just recently finally did one. :)

How did you get into publishing and affiliate marketing?

In 1997 I had my first child and a few weeks later he suffered a massive bilateral stroke (he had a stroke on both sides of the brain at once, instead of on only one side as with usual strokes). My dad sent me an old office computer to research treatments and I built a small webpage on Homestead that told his story. I started to get emails from other parents who were searching for information on pediatric stroke (at the time, there was little information out there). Long story short, I founded the first international support group for parents and families of pediatric stroke survivors. I was spending a lot of time on the site and started to investigate the possibility of making some side money with it and stumbled into affiliate marketing. I built my first site and everything clicked from there. I loved the whole process of creating and marketing (via organic SEO) an affiliate site – and luckily for me, it seemed I was pretty good at it. I’ve got zero formal training... but I’ve got a decade of experience behind me now.

You have been pushing hard for people to evolve the affiliate model and add value. What are some of the easiest ways affiliates can do that? What are some of the most creative and intensive things you have done to increase the quality and value of your sites?

I’m a big believer in longevity. It’s no secret that I’ve dabbled in the blacker side of things in the past, but as the engines got smarter, it became clear to me that building a site that ranks because it should (meaning it is the best resource on the topic) and not because I’ve manipulated that weeks algorithm was the key to being successful long-term in the organic listings. That said, I still focus a lot on SEO and the algorithm, but the core of what we do is build good sites. It is a lot easier to get links when you deserve them. Campy? Yes. Supports myself and my entire company? Yes.

I wish I could say there were “easy ways” to add value to an affiliate site. But, that ability to create a POD is what separates the few from the many, in my eyes. Scour the sites you’ll be competing with and see what they are offering and then decide how you can make it better. See what they’re missing and create it. Maybe you’ve found a site with great information, but no way for the community to become involved with it. Re-create that good information, add even more to it and then add a community aspect. Every site is different and sometimes it takes us a long time to find our POD for them.

For instance, I’ve been in the telecom market for a long time. It was my first commercial industry. When we decided to build a site about prepaid wireless, we looked around at the competition. CNet had short reviews of only the major companies and no user reviews (at the time), About.com’s info was a bit of a mess and hard to understand. So we built a site that offered editorial reviews of twice the number of providers CNet did, with information broken down into layman’s terms and that were three times as detailed as the information of either fore-mentioned big brands. We also added the ability for users to leave reviews of every provider. Today we have editorial reviews of 25+ companies, we have over 3000 user generated reviews (more than any other site with prepaid information to our knowledge), we have a comparison tool, we run a blog focused on the prepaid industry and we even moderate panels at the Prepaid Press Expo. We have the best and most complete site on prepaid cell phones in existence. We rank because we should.

With BB Geeks, we focused on the “newbie user” while all the other sites focused on providing BlackBerry news or information to BlackBerry pros. It allowed us to find a crack in a competitive market and build ourselves a very loyal following and a very strong brand in the space. We also made early use of Twitter and targeted the same segment of folks – people looking for help using their BlackBerry.

Going Cellular was a bit trickier. I was stumped for a while. So many cell phone sites... How do you take on Engadget Mobile and Howard Forums? I admittedly shelved that project for a long time – I couldn’t find our POD. Then one day, something a friend said to me earlier about a project he was working on sparked an idea. We have a TON of reviews between all of our telecom sites – 4000+ in total. And everyone always focuses on the reviews by provider. But, we all know that sometimes, T-Mobile may have great coverage in one area and crap coverage in another. So, I got the idea to take our large database of reviews and make them searchable by geographic location. It is a hard thing to replicate if you don’t have the review volume to pull from. But we did (and get more daily). So it works. We just released the tool so let’s hope it works well.

I’ve always maintained that Google doesn’t hate affiliate sites. They hate thin affiliate sites. We’ve done our best to create the type of value add Google, and consumers, are looking for.

Do affiliates need a lot of money to compete in the market? Or can they win with little investment provided they are willing to put in a lot of effort?

I don’t think you need a lot of money to compete. Granted, it was easier to say that five years ago (if only I’d worked even harder then), but the opportunities are still there. But, if the less money you have to invest, the more time you’re going to need to put in. People sometimes wrongly think that I had all this money laying around when I started. I hear “Well, I’d love to do that, but I don’t have the money to build those kind of sites.” I didn’t either in the beginning. I was the designer (in spite of being what I like to call artistically impaired), programmer (even if I barely scraped by – and nowadays, with WordPress, it is much much easier to “get by” in that department), content writer (I knew crap about telecom when I started – I learned, learned, learned the field) and marketer (please sir, can I have a link?). I was a one man band in the beginning. I still like to think people can claw their way into any market they choose with the right plan and right dedication. I have employees now, but that was because I couldn’t scale without them.

Do you see offline networking as being a key component of affiliate marketing strategies? Do you do it to promote any of your brands?

We network offline all the time. We run ads in targeted offline publications for our very niche sites (the ad prices tend to be lower and the return higher). For our telecom sites, we attend the major conferences like CTIA, WES, the Prepaid Press Expo, etc. It makes it a lot easier to develop contacts in the industry. Just like SEO’s go to SMX, PubCon, etc. You have to network face to face sometimes for better results. There is a cost associated with it, but we usually get a good ROI on attending. And if we don’t, we don’t return.

Google's Eric Schmidt made a public comments about "brands being how you sort out the cesspool" ... does this statement concern you? Has Google done anything over the past couple years that made you view them differently from a competitive standpoint?

I didn’t really get too concerned about it. As I mentioned, we build our sites to BE affiliate brands. If we’re doing things right, we should come out okay. As for Google and competitiveness, they’ve made it a lot harder on the smaller guys and the up and comers. But, that was to be expected. They haven’t made it impossible by any means. But they have made it harder.

Given Google's 2-tier justice system (penalizing smaller webmasters while giving big brands a pass), why do you think some well known SEOs still publicly out websites?

My number one answer would be “fame”. Too many people in this industry play the fame game. I personally have never outed a site, publicly or privately for doing anything against search engine guidelines and never will. The other reasons people tend to “out” sites is for competitive sabotage (my opinion is that if you’re being beaten by someone, fight harder... In the end, you’re site will be better and stronger for it) or because they think they’ll impress engine reps and make connections. The engines are not our friends (though I truly like a lot of the engine reps themselves). I’m a strong believer in Omerta in this industry [waves to Matt].

What makes you decide to start a new site? Do you have to love the topic, or can you make a profitable site around a topic where there is $ even if you do not care for the topic?

I always say you don’t need to love the topic, you need to learn TO love the topic. To make the best site, you have to be willing to either immerse yourself or pay to immerse someone ELSE in a topic. I find industries where I see opportunity.

Do you try to make money off every site you build? Or do you invest more in the sites that really take off, while spending less capital and effort on the lower end sites?

If the industry is small and the site will only make 3 or 5K per month, then we build a site that will only take a day or two or three a month to maintain after the initial build to keep the ROI in position. For sites with much higher revenues, we put in a lot more time – but for a much higher return. I personally like the smaller niches. It takes more sites to hit bigger numbers, but the competition and upkeep is relatively low.

Do you ever view sites as self-sustaining and stop investing into them? If so, how do you decide when?

It depends on the industry. We don’t have any “active” site that we don’t at least spend a few days a month on. We do have some sites we deem “inactive”... Meaning they didn’t do what we hoped so we shelved the site. We might come back to it later or we might let it earn whatever it does until it dies a slow death. I don’t ever want to get complacent with a site we consider a “winner”. That’s when you give the competition the opportunity to do what we’ve done to our competitors in various sectors. Donald Trump talked about that in Think Big and Kick Ass. He got comfortable and lost his A-game. You can’t do that. We never stop trying to make “active sites” even better. We have to do it before our competition does.

You dub AdSense as "webmaster welfare" and seem to much prefer affiliate revenues to AdSense revenues. Do you have any sites in illiquid affiliate markets? How do you monetize them?

I try my damndest to keep AdSense at less than 20% of our revenue. I don’t like being dependent on one company, who doesn’t even tell us what rev-share we’re getting. It makes me nervous. I also don’t like to be dependent on one affiliate program either. Diversity is a good thing. We have a few in illiquid affiliate markets. Some are “future plays” meaning that they don’t have affiliate programs now, but we think the topic will eventually get big and the monetization opportunities will come. But we don’t spend heavy time on those. We usually research before we dive in to make sure affiliate programs are available.

Some of your tweets, blog posts, and past interviews have showed a bit of a distaste for all in one webmaster solutions. What tools (cms, ads, design, seo, etc.) do you consider to be key to your successful fast growing publishing enterprise?

Our CMS was built in house, as our most of our internal reporting tools. I’m actually pretty simple. I like to look at a lot of things by hand. It probably isn’t the most valuable spend of time, but, it works for me. I’m a big evangelist of the Thesis Theme and we use that on several sites (and hybrid it with the CMS) and the folks who we hire to skin them do sexy work. I think we use Open Ads for the CPM based advertising. I use some of your tools too. I also use Compete (for competitive intelligence) and Basecamp (to organize everything). Like I said, I’m pretty simple on the tool front.

It seems a lot of the SEO discourse at the public level has dropped off sharply in quality (but not in quantity) over the past couple years. Some people (like me) have created private sites, but a lot of the old timers that I consider mentors have sorta disappeared from the public discourse. Do you think this is a temporary shift, or a trend that is likely to continue? Are many of these other people moving on to other private communities?

A lot of the old timers have a distaste for the fame game. If I wasn’t now also running an Internet marketing company, I’d probably be underground too. It’s easier to just do your thing and make your money. They work on pushing their sites and not themselves. I still meet with a lot of the folks you probably consider old timers, but at non-conference gatherings and small meet-ups. With so many people willing to out someone to get their blog to the Sphinn homepage, you become very careful with who you trust. Just like the engines have made it harder for small brands, fame-seekers have made it harder for people to make it into many folks “inner circles”. SEO Bloggers are like reality TV stars... Most don’t have the talent, they just have the platform to pretend they do.

Do some of the cultish behaviors in the SEO industry surprise you? What can the industry do to clean up such behavior, or is it just a fixture?

I don’t read many blogs or belong to many communities, so I tend to shield myself from a good portion of it. The rest, I’ve learned to mainly ignore. Every once in a while, someone will really get under my skin. I don’t think we will ever be rid of the behavior to be honest. We just have to learn not to react from it or be distracted by it.

A lot of new webmasters have a remarkable sense of entitlement while being exceptionally lazy. Do you think this new breed of webmaster has been led astray by get-rich-quick scammers, or do you think the game getting harder and more expensive is causing more people to beg for short cuts?

I think it’s a combination of both. Sometimes I wonder if people realize the amount of time and effort it took for the “bigger guys” to get where they are. Get rich quick schemes are like “amazing weight loss pills”. You know they don’t really work or everyone would be rich and skinny. But, you like to believe it, because it means you can ignore the fact that the real answer for achieving anything you want in life is actually hard work. Not everyone deserves a trophy.

What books, blog posts, forum threads, offline events, etc. were key to you becoming so successful with your online business?

Wow. Well, Steve Krug’s “Don’t Make Me Think” was instrumental for me early on. It really helped me learn to monetize. The “game changer” for my career was probably “E-Myth Revisited”. That book was what made me decide to scale from my kitchen to an office in downtown Guelph with a staff. WebmasterWorld was also a big source of training for me in the early days, along with a private forum I belonged to back then. My first PubCon also was a game changer, because it made me see that I really did have a career and was good at what I did. It gave me a lot more confidence.

Recently you moved back into the consulting model a bit, which sorta surprised me because I always saw you as the super-affiliate type who would avoid client work because you loved doing stuff your way. What brought you back to the client model?

It surprised me too LOL. I’ve taken on occasional consulting clients over the years... It was interesting to see mistakes and issues I don’t deal with day to day in my own sites. It also helped keep me sharp with working on site types Sugarrae and MFE doesn’t build. I don’t have a lot of patience, so dealing with a lot of client work has never been my style.

Back in January, Lisa Barone and Rhea Drysdale decided to head out on their own and create a consulting firm. They contacted me because while Lisa is an expert in blogging, branding and social media strategies and Rhea specializes in ORM and social media with a very strong SEO base, they both felt they lacked the business experience of running their own company. They were both becoming first time entrepreneurs and felt my experience with running companies, in addition to my expertise and “brand” in affiliate marketing, monetization and SEO, was something they needed/wanted in addition to their own skill-sets. Being able to leverage my talents to create a consulting firm and create strategies for client sites, without having to be the person managing clients on a day to day basis, was what made me decide to give it a go. We’ve been very successful thus far, especially considering everyone said we were nuts to launch in the middle of a recession. I expect pretty big things for the company.

Given how well you do with affiliate stuff, I would imagine you are quite selective with client work. What type of client is ideal for Outspoken Media?

It’s funny you mention that. When we first launched the company, we immediately started getting leads from potential clients. I’d decide to turn down half of the leads (one of my responsibilities with Outspoken is business development – AKA, deciding who we work with) without ever even speaking to the potential clients. Of the 50 percent with did speak with, we’d usually end up referring half of those out. I think Rhea thought I was insane at first. One of the first lessons (based on my own feelings) in entrepreneurship I gave her was that we didn’t want to take any client willing to shell out cash. We want to work with good sites, where we think we can make a big impact and with good people. I didn’t want to fill up our roster with “anyone willing” and not have room to take on the clients that would keep us challenged and be awesome to work with down the road. Of course, it was likely easier for me to be calm with taking that route since Outspoken isn’t my sole source of income. But I think Rhea and Lisa have seen that the leads haven’t slowed and our client roster keeps filling and trust that strategy now. So yeah, we’re pretty picky.

That said, it doesn’t mean anyone we’ve turned down or referred out was a “bad client”. Sometimes we turn down clients due to conflict of interest (either with current clients or sites that are direct competition to any sites owned by Sugarrae and MFE Interactive), ROI reasons or for budgetary reasons.

The ideal client for Outspoken Media is someone who believes in us and trusts us to do what we do best.

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Thanks Rae. To read more of her latest thoughts on marketing, affiliate business models, the internet, or life in general subscribe to Sugarrae and her consultancy PushFire.