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Dirty Secrets Of Internet Info Product Launches Exposed

By March 1, 2011February 9th, 2017Internet Lawyer

info product launchesAs an Internet attorney, I analyze many online info product launches. For information marketing, the concept has become so commonplace that there are even how-to “product launch formula” info products routinely sold through launches.

There are good products out there, ethical launches, and launch managers who know what they’re doing when promoting things that bring value to the lives of prospects who buy.

However, there is a dirty rotten dark side to info product marketing that you should know about. Frankly, it’s so repulsive you want to take a shower after experiencing the dirt as an insider.

Let’s use a hypothetical launch to show you how things really work in many “guru” product launches.

We’re talking the get-rich-quick launches that will sell you something of limited value but pretend you’re buying your ticket to wealth without putting in the effort.

Who wants to be a trillionaire?

Billy Bob and Willy Bob decide to launch Trillionaire Blogging Secrets (TBS), an auto-blogging product that sells for $1,000 and pays out a 50% commission to affiliates and 75% to super affiliates. It’s priced at a point where greed allows the promoters to overlook the likelihood of a “Google Slap” for anyone who actually buys and uses the product.

Let’s assume that Billy Bob and Willy Bob actually pay their affiliates, programmers, affiliate manager, copywriter, and web designer. This isn’t a given because some affiliate program operators will screw everyone over by not paying them after a product launch is finished.

The TBS launch will take up a couple solid months of the guys’ time to cover pre-launch, launch, and post-launch activities.

Thanks to promotion from some big email list owners as super affiliates, Billy Bob and Willy Bob build up a list of 25,000 subscribers. Most launches won’t have super affiliates so these guys got lucky and built up a list at least three times larger than they’d otherwise create without the super affiliates promoting.

At launch and a small window post-launch, 15,000 of those subscribers show up and read the sales letter for TBS. 4% decide they want to become trillionaires and buy the product.

But 1 out of every 4 buyers charges back or demands a refund, leaving a net 3% conversion rate. Some even get their Internet attorney involved in order to squeeze out a refund…or they file complaints with the government, anti-scam websites, etc.

But 3% of 15,000 is still 450 sales. And 450 * $1,000 = $450,000.

Does this figure make Billy and Willy trillionaires?

Not quite. Let’s break the numbers down further. After paying out affiliate commissions, handing out affiliate prizes to the top sellers, paying production costs, etc., the guys are left with 1/3 of the money.

$450,000/3 = $150,000.

And then there are income taxes (assuming they’re not committing tax fraud). Let’s conservatively write off $30K for that, leaving $120,000.

Then the funds are split between Billy Bob and Willy Bob, i.e. each is getting a $60,000 pay day.

The multiple launch hustle

From a timing standpoint, the guys are looking at a maximum of 2 to 3 launches per year. More than that isn’t feasible logistically because of seasonal dead zones, competing launches, etc.

Three launches will earn each of them $180,000 annually. Nice money but not building wealth if they’re blowing it on the “guru lifestyle,” that is, spending the money as fast as it comes in to fake it until they make it.

That guru lifestyle typically involves leasing expensive cars, McMansion mortgage or rental payments, and burning through cash flow on hedonistic adventures (drugs, hookers, etc.) at pitch fests.

If Billy Bob and Willy Bob want to boost their income, they’ve got to promote heavily to their email lists regularly. This means promoting for stuff with a big affiliate payout, assuming they don’t get “stomped” by an unethical marketer who stiffs them on affiliate commissions.

Affiliate Pimping

They pike as affiliates for products that often have little value but are sold to newbies who don’t know they’re getting screwed.

And the vicious cycle continues…

Deceptive Cross-Promotion

If Billy Bob has large email lists, he can join together with other marketers in a group that cross-promotes each other’s products as affiliates. Heck, they might even coordinate those info product launches so that no two overlap and conflict with others done by group members.

Anything wrong with that?

Yes.

First, these groups almost never disclose they exist when promoting for each other even though they’re giving each other reciprocal testimonials to add credibility.

And when exposed, they laugh it off as a tinfoil hat conspiracy (shooting the messenger rather than defending the indefensible).

Second, the emails and other marketing materials they use to promote are filled with lies and half-truths intended to deceive prospective customers into buying info products that have never been tried by the person promoting it.

Third, what’s sold in one launch is recycled as a “freebie” bonus by the same marketer when piking as an affiliate later. This is a key to understanding the stench that underlies some of the biggest “guru” events you see online, affiliate leaderboards, and the affiliate prizes they give each other for number of sales made per launch.

The Circle Jerk Calendar

Let’s say Billy Bob joins five other marketers in a private group called the “The Circle Jerks.” They decide each marketer in the group will have two product launches each year with everyone else promoting as an affiliate for those launches.

They split it up over a calendar so that there’s a launch every month by someone in the group (12 launches per year).

That’s 2 launches where a marketer profits from launching his own products plus 10 more launches where he also profits as an affiliate for launches done by the other five Circle Jerkers.

When there are hundreds of affiliates promoting on a particular launch, how do you induce prospects to sign up through your affiliate link instead on someone else’s link? After all, during pre-launch, the average prospect is going to get promo emails from 5 or 6 different affiliates.

The solution for Circle Jerkers is to offer as an affiliate freebie bonus one of the same products they duped other people into buying at a prior product launch.

In other words, Billy Bob will sell a product for a $1,000 during his own launch and then turn around six months later and give it away as a “bonus” to someone buying through his affiliate link for product launch by another member of the group.

How would you feel if you were the person who bought for $1,000 to discover it as a “freebie” six months later?

Getting Caught And Finding Jesus

At some point, a trial lawyer representing a deceived client, or a government agency (e.g. FTC) deciding to make an example, will nail notorious info product marketers for misconduct when they cross the line by making unsubstantiated claims and engaging in other deceptive trade practices. It’s a natural response to part of this disturbing trend in Internet marketing.

Because many of these “gurus” have an anti-social personality disorder (they are sociopaths or psychopaths), it’s common after getting nailed for wrong-doing that the act of getting caught is actually marketed to the guru’s advantage.

Some play the victim, wearing it as an “us versus them” persecution badge of honor to their tribe of sheeple.

Others will claim they’ve reformed, found religion, or some other insincere spin to dupe prospects into believing they’ve turned over a new leaf when selling that next info product.

Are All Info Product Launches Bad?

No. Online info product launches do have their rightful place in a successful information marketing business model.

But they are too often misused to hurt a lot of people…customers who mistakenly placed their trust in the wrong “gurus” because of lack of knowledge, financial desperation, or greed.

What should you take away from this?

If it sounds too good to be true, don’t invest your time and money on it.

And if you’re marketing through info product launches (your own products or as an affiliate), be ethical and comply with the law when you do it.

Mike Young, Esq.

Author Mike Young, Esq.

Mike Young has been practicing business and technology law since 1994 and is an angel investor in startups. He's been an entrepreneur since 1988. To get legal help from Attorney Young, click here now or call 214-546-4247 to schedule a phone consultation.

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