Let’s cut to the chase, shall we? You are not where you want to be financially. You see other businesses pass you by and make money while you fight to make ends meet and appear strong and steady to your peers. Despite your best efforts it seems like everybody is making money. Except you.

You are dying
Luckily, death in business can sometimes be avoided, but it requires you to set aside some misconceptions and to look at the big picture.

Here are 10 reasons you are stuck, presented in straight forward speech. You may not find this information discussed on industry board threads or speaking to program owners and marketers (remember the thing about appearing strong and steady?…).

1) You are Boring – Penalties of being Mediocre

Mainstream marketing guru Seth Godin’s book Purple Cow deals with the importance of being remarkable.

Particularly online, getting noticed and invoking curiosity in potential consumers immediately is important.

Are you remarkable? Is your site worthy of being noticed?

Don’t answer that one too fast.

Even if you shoot exclusive content, you are not necessarily remarkable. Are you trying to be the next Vivid or Penthouse? Then you are not remarkable. (1)

If you are an affiliate and don’t create your own content your job is even more difficult because you have to work with other people’s content. How can you present that and be different?

What once was remarkable and noteworthy usually becomes average and mundane. Remember when Bang Brothers released BangBus.com to a market that hadn’t seen reality sex sites at that point?
THAT was a remarkable concept.

Fast forward a few years and reality sites are now among the most saturated kind on the web.

Did you start your site in hopes of competing with a similar site?

If there is a similar site you are already not remarkable.

2) Overextended Payouts and Promotions

Something awful has been happening lately.

The industry has been cannibalizing itself over the past years with an attitude of one-oneupmanship in regards to affiliate payouts and promotions.

Instead of the occasional increase of payouts or small promotions, many affiliate programs now overextend themselves financially by offering regular payouts and promos so high that a recouping of costs becomes unlikely.

While a large and financially diverse company may be able to offer $40.00 payouts on $25.00 membership signups to affiliates, you might not.

This is a business, not a popularity contest, although sometimes it might feel that way, particularly in the adult industry.

Offering affiliates a bonus or payout increase for a certain amount of sales is good business.

Offering all affiliates payouts as much as a membership generates in two months, when your average retention for your site is six weeks is not.

Offering a larger cut to a few select affiliates who regularly send you traffic and signups in order to encourage them to increase that number is good business.

Increasing payouts to all affiliates, without ensuring an increased amount of traffic or sales is bad business.

This brings us to the next reason you are dying:

3) Bad At Math – Delusional Accounting Concepts

Hoping for better times and emulating what your competition does is not sound accounting advice.

You need to know your conversion and retention levels.

You need to know how much of your traffic is generated internally (by you) and how much comes from affiliates.

You need to know what you can afford in the short term and in the long term, and be profitable.

Let’s do some simple, basic math to illustrate this. (2)

We assume almost all your signups are generated by affiliates (already a bad idea, but quite common).
Your membership price is $25.00
You pay your affiliate $25.00 per signup.
You don’t do any up selling or cross selling.

After being really honest with yourself and your business, you realize members stay an average of only two months with your site, and earn you an average of $50.00 (gross revenue).
Your gross profit is $25.00 in month 2.
This member cost you $5.00 in processing fees, and $4.00 in server bandwidth.

Assuming you don’t have to pay for staff, or have any other business or marketing expenses (highly unlikely), your profit is $16.00.

Do you see a problem here?

How many of such memberships do you need to sell to pay your bills each month?

Can you really afford to give away plasma televisions and bonus cash in addition to your payouts?

Sponsoring events is another wonderful way to relieve yourself of cash.

Think sponsors always earn their money back after forking out $10 000 for banners and free drinks at events? Think again.

Speaking to several sponsors of two recent industry events, none expected to see any increase in sales. Many times they joked how those drinking the booze they paid for didn’t even know who sponsored the event, or had the ability to send any traffic.

So why do they do?

Larger programs are expected to give back to the community. And there is still that glimmer of hope that by sponsoring events webmasters who actually have the ability to send traffic and joins will remember this kind gesture when the time comes to choose a new sponsor to send to.

Maybe webmasters who aren’t promoting them now will do so after seeing their banners at the event?
Maybe that’ll pay for the expense?

But “Maybe” should never be a concept to include in your business plan.

Don’t let your ego and wishful thinking dictate your marketing.

4) Too Much Competition
If Reason for Failure number 1) applies to you, chances are competition is a factor as well. If you are an affiliate and market sites that fall into the 1) category you also are affected by too much competition.

You are probably waiting for these statements:
There is too much free content available.
Everybody’s got a video camera now and they all shoot porn, it just saturates the market (with crap).

And some of this is true but that’s only half the story.

If you are an affiliate promoting any sites or programs on the “vanilla” end of the spectrum you are competing against every TGP, MGP, adult blog and free site on the web.

The problem is that the number of free content is already staggering, and continues to grow.
Some programs indiscriminately give away more and more content in order to please affiliates.
Free sites give away more and more content in order to outbid their competition for traffic.

The consumer wins (not really but we’ll get to that.).
Any reasonably intelligent surfer knows where to get his or her fix for free on the web.
Are you giving your potential buyer a compelling reason to pay for what you are offering?

If you run the marketing for a paysite program, your job is to entice the surfer, not “give away the merchandise” for free.

But you have been doing exactly that, haven’t you? Because you saw others doing it. And it snowballed from there, to the point where there is enough free sexual content available at any time to minimize chances of generating revenues from paying members.

So now you are hoping that even though that surfer got off for free, maybe one day he’ll see something he likes among your promotional material, that he wants to see much more of it, and you’re the only one who offers this, and then he’ll pay.

Either that or he’ll sign up with your competitor’s site because your competitor understood the power of proper marketing and gave away just enough to wake his curiosity in the first place.

Which is more likely to happen?

If you are not in the top 10 in your market you already have the answer.

5) Build It and They Will Come – This ain’t Hollywood, baby

So you are fairly new to the industry. Good for you. The first thing you’ll do is build a TGP. Because that’s what everybody does, right?

But after weeks of building and coding and managing your content, Google still is showing you no love.

So then you learn how to drive traffic to it. You learn about link trades and skimming. All fascinating stuff. Before you know it your new TGP has a whopping 2000 hits a day. Then 10 000. In the meantime, you upgraded your hosting to the hosting company’s most expensive plan, spend every free minute on maximizing your design, and get new traffic trades going.

So why aren’t you driving that new BMW yet?

After all, you heard so much about all the money TGPs make. You even know some people on the boards who run a horribly outdated looking TGP and they make billions!

The fact is that most financially profitable TGPs, MGPs and free sites were established in a time when such sites did make money. They established a strong following among surfers, a good reputation, and were able to establish traffic networks and relationships that are now forever closed to you and everybody else new to the business.

But most importantly, TGPs were new and exciting at that time. Surfers loved the free teasers and goodies they got and kept coming back.

Unless you are not hit by Reason 1), your TGP or free site is not exciting. Why would surfers come to you instead of go to the place they have been going to for the past five years? Even if they do come to you, why would they buy from you? They are here for free entertainment and you are not giving them a reason to change that.

But paysite owners are dealing with precisely the same problem: new to the business, the most logical answer to riches seems to establish a pay site. And once that’s up, enough people will find their way to your tour and your signup page to pay for your new mansion. After some time goes by you realize that’s not going to happen and you begin to learn how to market your site and drive traffic.
This is reverse thinking: you need to know how you get your customers, THEN create a product for them. Doing it the other way around is unfortunately very common and hence why it made this list.

6) Everything New is Bad – Failure to Embrace new Trends
You love pointing the finger at tube sites, don’t you? After all, those guys give away all this free traffic and don’t even send you a single hit.

That is your fault.

Instead of blaming YouTube, PornoTube and the rest of the bunch, see them as an additional way to get traffic to your sites. If done properly, tube sites can become one of your major suppliers of members. Yes, those same “freeloaders” you blame for the industry’s demise.

Go ahead and customize some teaser videos and upload them. Your competition is already doing it and they’re doing well.

But what about torrent and file sharing sites? Don’t some people steal entire movies from your members area and make them freely available there?

Possibly. If you have done a thorough check and saw that there indeed are some of your movies floating around ask yourself the question: will the person who downloaded this movie know it comes from me? Will he know he can get lots more of this type of content on my site?

If not, think of ways to change that.

Why? Because in a digital world there is nothing you can do to prevent movies from being stolen and uploaded. Even DRM can be overcome. Anti Piracy Laws are followed by honest people, not those hell bent on stealing. Torrent and file sharing sites will be around for some time to come, and when one gets shut down two more pop up.

Are you going to keep blaming them or do something about it? Or better yet – do something with it?

Tube sites and Torrent sites are a great way to establish and build your brand. You cannot beat them but you can work their system.

Social Media sites are another avenue that can work wonders for brand establishment and even traffic. This does not mean to set up a fake Myspace account and sending spam messages to your contacts to send traffic to a fake profile that redirects to your porn site. Far from it.

Social Media sites are a great opportunity to let people know that there are real people behind your project. If your site looks like one of those “corporate looking” cookie-cutter sites this is especially important. Taking part in forums and groups is just one of the many ways Social Media sites can really help you get your name out there.

7) Trying to Please Everybody
This one ties in with all the reasons above. Why did you choose to open a paysite with vanilla content? Why did you choose to increase your payouts blindly to everyone? Why did you hire the same design company half your competitors use?

In trying to please everybody you ensure one thing: your content is unremarkable, your design looks the same as everybody else’s, and you made sure you help Failure Reason 2) perpetuate itself for you and everyone else in the industry.

Wanna try again?

Be sure to not get trapped by the next reason for failure:

8) Lack of Planning – Wing it and Go with the Flow
This should really be at the top of the list because proper planning can and should eliminate every reason for failure mentioned above.

Proper planning always requires one major component: Information.

The more information about your customers, the market, available and future technologies, and consumer trends you have, the better your planning will be.

Know your strengths and weaknesses.

Don’t start a network of blogs if you struggle writing good articles on a regular basis, (or are too lazy to do so), just because you see blogs being all the rage these days.

Don’t start a pay site focused on pantyhose fetish just because they sell if you don’t have a pantyhose fetish.

Do come up with a budget and know exactly how much you can spend while you establish your plan.

Do hire someone who is better at innovative tour design than you are, if you can at all afford it.

Do your research in the beginning, not in little steps as you go along. This doesn’t mean you shouldn’t educated yourself as you grow, far from it. It means you should know about traffic and where you’ll get it before you build your site. It means you know what kind of costs you’ll face while you build, grow, and maintain your empire.

So why is this not the Number 1 Reason here? I could make a joke and say I didn’t plan properly but fact is I wanted this list to start with something more interesting and attention grabbing. “Planning” just doesn’t sound all that interesting. “You’re Boring” does.

This brings us to the next Reason for Failure:

9) Your Marketing Sucks (3)

Reasons 4, 5, 6, and 7 already point to one of the most crucial aspects of your business. It is the lifeblood of any business, not just adult. It is the reason some products sell while others don’t, despite being inferior in many ways. It is what you have either neglected, let the wrong people do for you, or have simply done wrong.

It’s Marketing.

You don’t have to get a degree in marketing. You don’t have to be able to recite the Four Ps of Marketing in your sleep.

You do have to know how your customers think, what they want, and how you can show them that you have what they want.

It is important that you learn about as many ways to market your product as possible. Equally important, realize that marketing is both a creative and intellectual undertaking.

But most importantly: marketing is not something you do every once in a while. You market at all times, if you know it or not. Who you are is a representation of your product. So is the look and feel of your site. What you say, either directly or in form of text or graphics on your site or marketing materials is what consumers will use to form a snap opinion about you and your product.

Consistency or lack thereof, pricing, color themes, names, models…marketing is everything.

And everything is Marketing.

It is up to you to consciously and purposefully market your site or services to consumers.

Marketing is so important, so multi-faceted, and so open with possibilities that thinking about doing it just every once in a while and in a restricted fashion is akin to financial suicide.

If you don’t like and embrace marketing as a constant in your professional life, find somebody who fits the bill or expect your ultimate demise.

Yes, it’s that important.

Read, practice, and adapt different and new marketing strategies at all times.

Don’t want to do that or think you don’t have time to change your ways?

Expect to be killed by:

10) I Ain’t Gonna Change for Nobody! – Old Dogs DO Learn New Tricks

If you research the history of virtually any existing successful business in adult or mainstream you will see that adopting to change, and constant (re)education has been a vital part of its success.

If you have discovered ways that work for you today then be proud of yourself. But do not make the mistake and refuse to try new approaches or learn about new marketing strategies, technical innovations, or any other area that can help you. What has worked last year may not work as well this year, and may be completely useless next year.

Something you have tried and failed in the beginning may be perfectly adequate for your current needs.

Keep reading up on industry and consumer trends, new technologies, hire a consultant to help you spot inefficiencies or problems in your business. If you hear about a new way to produce better content and that’s what you do, find out more about it. If you see somebody market in a interesting way, find out more about it and see if you can do something similar. It might just be what you need to bring your business to the next level.

And the next level is where you want to be, isn’t it?

(1) See attached reading section for books by Seth Godin and other recommended authors.

(2) The figures here are for representation purposes only and are highly simplified. Billing fees, server expenses, marketing costs, business expenses etc. vary. High payouts and promotional expenses can be offset with proper planning, cross selling, upselling, revenues from other ventures, etc.

(3) Your Marketing Sucks, title taken from Mark Stevens books of the same name. His book contains alternative marketing strategies, not necessarily just for web-based businesses.

Further Reading

Seth Godin
Purple Cow
All Marketers Are Liars
Survival Is Not Enough
Permission Marketing

Christopher Locke
Gonzo Marketing

Al and Laura Ries
The 22 Immutable Laws of Branding
The 11 Immutable Laws of Internet Branding

Mark Stevens
Your Marketing Sucks

Brad Keywell
Biz Dev 3.0

Mike P. McKeever
How to Write a Business Plan

Michael E. Gerber
The E-Myth Revisited

Peter F. Drucker
The Essential Drucker