When I was in college, I paid all of my expenses- food, rent, and out of state tuition doing affiliate marketing on the side. This was not throwing up banners on a site, but rather running PPC campaigns to affiliate offers (arbitrage). I also learned incredibly valuable marketing/PPC/getting traffic skills I am applying to my startup.

Go to affbuzz.com and read all of the blogs there, you'll learn a lot about how to actually make money with affiliate marketing. (Step 1: Stop using CJ).

What would you recommend in place of CJ? Direct affiliate relationships?

affiliate marketing = using $1 to make > $1. how to do it, varies from pple to pple, some use ppv, ppc, jv, etc. like @il said it...affbuzz.com is a good place to start.

I ran a modestly successful affiliate site from 2002-2006. I did very little work, and could have done much more to succeed (in retrospect), but it did provide 20% of my income during that time. I recently attempted to relaunch the site after a few years away, but found that the market is much tighter than before (I made only a handful of sales during a two month test run; I also believe that consumers are now more skeptical of affiliate marketing sites.

I think that given the right market and some hard work, it's possible to make enough to live from affiliate marketing, but I've found that I prefer to work with friends on more ambitious projects.

Depends what you're selling, and how you sell it. I make maybe $10 a month posting affiliate links to Twitter, but it's because I'm trying to share things with people, not trying to make cash.

You'd better believe that somebody is making money on all of those "flat tummy" ads you see all over the web. A few years ago, black hat SEO got a lot more competitive -- you've really got to do criminal things (like hack people's Wordpress installations) to rank of highly competitive terms.

A lot of the people who were doing black hat SEO switched over to pay-per-click promotion of landing pages that push affiliate offers... Some people make pretty good money that way, but you can easily blow $500-$5000 on advertising before you've got figured out a campaign that actually makes money...

I know of a guy who spent about $3k a day on ads and made $5k in revenue. You've got to watch it like a hawk because if something goes wrong, you can burn cash pretty quick

Affiliate ads are more suited to sites loaded with product reviews, discussions, comparisons, etc. The sort of tips that shoppers look for, combined with an affiliate product link, creates the difference between a stray ad, and a valuable sales proposition.

AdSense effectively determines/auctions PPC placements. Affiliates attempt to recreate the AdSense magic in large part by building content around links to products--in other words, marketing.

It's a numbers game. I'll take a guess and say that you are running a blog. In that case, contact some companies and sell some ads directly. It's a long shot in all directions. At most, you should be able to sustain a hobby. If I'm wrong about the blog, sorry -- I have a blog that has a similar problem, but it's a hobby.

Yes, you can make tons of money from affiliate marketing.

Doing it "ethically" is another question however. If you want to make money fast and big, its pretty necessary to learn blackhat techniques.

Right. So affiliate marketing is on a completely different level to adsense.

What I have been doing is use affiliate links no different than adsense, that is find 250 by 250 image links and put them on some location on my website.

I gather that I have been doing it all wrong and affiliate advertising is fundamentally different from say adsense.

Yes - some people make absurd amounts of F-U money from affiliate deals.

there are guys pushing a few hundred thousand dollars worth of offers a day. It's a huge huge industry, but you can't just toss up some banners and expect to profit.

Do you then mean that affiliate ads are not quite suitable for an informative website and do not quite compare or supplement adsense. I suppose I mean to ask, do you mean affiliate ads are fundamentally different from adsense, in the way that say walking and driving a car are different.

Yeah, most successful affiliate marketers seem to do it as their main thing--- they build entire sites with the sole purpose of pulling in visitors who'll click through and buy something via the affiliate link. It seems much more difficult to use them as a way to make money from a normal site, although I've had modest success with relevant Amazon links (Amazon is nice because you get commission if someone clicks through and buys anything within 24 hours, not necessarily the product you linked).

They really are on different levels. You can push an affiliate offer through a review site, through an email list, through ppc ads, ppv traffic. Adsense is pretty ordinary, and works in situations when users want more than a site or page can deliver for the most part.

So it is not a good idea to put an affiliate banner on a normal page, hence perhaps why I have not gotten a single sale. Affiliates just require a different strategy?

you need to recommend products. I've had some success w/ list posts full of recommended products.