SES Interviews: Pepperjam’s Kris Jones on Search Arbitrage

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This is our last interview in the SES series and is with Kris Jones, President and CEO of Pepperjam. Kris is a powerhouse of an Internet marketer and Pepperjam has been named (for the 2nd straight year) as one of the fastest-growing privately held companies in the US. With a reputation as a great place to work, the Pepperplex boasts unending supplies of a leading energy drink for its employees. Kris talks about ping-pong on the job, search arbitrage, and other dilemmas with Joe in San Jose.

Thanks again to everyone who took time out of their busy conference schedule to answer some of Joe’s questions.

SMS: Hi Kris. We’re actually at YOUR booth. Thanks a lot for having me here. Just recently you did an episode with The Next Internet Millionaire. How did that go for you?

Kris: Actually, they just put out their first episode. I’m going to be in episode number 7. I can’t talk about exactly what my role was, but it was sort of like a hybrid co-host/judge. It was fun. And I will disclose that one of the reasons I was invited on the episode was to focus on Pepperjam’s work environment less so than to stand up in front of the contestants and say “here’s how to effectively market your website through search.”

Instead, what they wanted me to focus on was how do you build a business that is fun to work at. So that’s what you are going to see on Next Internet Millionaire on episode 7. So it’s probably like on in mid-to-late September.

SMS: That’s really interesting that you mention that because you do really have a fun working environment. I watch all your employee videos on your blog. In order to grow a business, the way that you have right now, it’s hard to find people to do the work who are dedicated to the craft and to have fun doing it. What kind of advice would you give people looking to hire somebody?

Kris: The approach that we took when we were at two employees – myself and our Chief Operating Officer – was we said “we want to find the smartest people we can find that will fit within a fun work culture.” We’re not looking for suit and ties. We’re looking for young, smart, creative people who are going to set their own standards.

So my advice would be that sometimes you get wrapped up in how much do you pay the employee and everything. We pay all of our employees very well, but what I think the value of working at a company like Pepperjam is not in “I make X number of dollars” but “this is a fun place to work.”

We give everyone on our staff the ability to play ping-pong and to play Nintendo Wii. We’re actually sponsored by an energy drink company so we always have an unlimited supply of energy drinks. I’ve never walked up to anyone who has seemed like they’ve been playing ping-pong a little bit too long and called them out on it. Because the way I look at it is that you create a work environment where people want to be there and they know that other people are standing right behind them if they don’t perform. So for that guy or that woman who is playing ping-pong too long, they still have to manage their performance. And if they’re not performing, they’re not going to last at a company like Pepperjam.

So my advice is to focus on what environment you put your employees in and invest in it. Spend money. Don’t count the pennies; instead, spend money to make sure that everybody wants to come to work.

SMS: That’s very important. I appreciate your sharing that with us. Let’s kind of shift a little bit to search arbitrage and PPC arbitrage. I see a lot of companies are still in their infancy and having to do something like this to generate income to help supplement their spending. Can you give a little bit of advice maybe on how we could use that or anybody could use that?

Kris: When I got involved in affiliate marketing back in 1999, that’s what I did. I bought PPC ads and sent them through landing pages or direct linked and the profit was the difference between what I put up and what I was getting paid by any of my merchant partners.

Honestly and sincerely, that was the seed money that I used to fund the company that I now run. So I went from being solely a search arbitrager to having 100 employees in one of the fastest-growing companies in the US.

So how do you do it? That’s what I typically talk about at these conferences. My focus is on scale. So some search arbitragers will say to focus on one or two or three different merchants and just blow out as many keyword lists and everything as you can. My focus is a little bit different. I try to make $50-$100 profit a month with as many merchants as you could possibly make that kind of profit with.

SMS: Sounds like a lot to manage though.

Kris: It is a lot to manage. And you can’t just launch 2,000 campaigns a week. You have to start focused. And what I say is, find something that works. You replicate it and then you scale it. So something as simple as trademarks – that’s really something you could make $50 to $100 profit on per merchant.

One other thing I was going to say is when I was speaking at Affiliate Summit, I put out an idea. And I don’t know if anybody took my advice because I’m not doing it – but, be the typo guy. In search arbitrage, your profit margins are everything and staying focused is key to your success. So why not create campaigns around typos – trademark typos. I’ve never met anyone – I’m serious – I’ve never met anyone who came up to me and said “I’m the typo guy,” but somebody is going to and they’re going to be making $100,000, $200,000, $300,000 a month. So be the typo guy. That’s what I thought.

SMS: It’s a good idea. Actually, whenever I do PPC, I’ll always do typos. But that’s a really great idea.

Kris: The idea is to focus on it. Because, as you said, how do you manage it? Well, one way to manage it is to stay focused. Because it’s not just about putting on every keyword you can find. Some people take that approach – ShoeMoney for instance. I call him the nickel-click guy. He wants to buy as many keywords as possible and pay the minimum.

SMS: Right.

Kris: He’s made an awful lot of money doing that. But that’s his approach. My approach is more about finding something that works and replicating it and scaling it. So trademark bidding for me in the early days was one way that made a lot of money. You could do typos. You could do branding. There’s a whole number of different things.

But one other thing I’ll say is that there’s a tool called KeyCompete.com. And what it does is it scrapes Google AdWords for the keywords that any given advertiser is bidding on. So you could type in, say hypothetically, Target.com into KeyCompete and they’ll offer you the ability to download the keywords that Target is actually bidding on.

So as an affiliate marketer, the bell goes off and the lights go off in your head (laughs) and all you have to do is choose your favorite merchant, download their keywords, direct link, or build yourself some landing pages. Honestly, if you’re doing search arbitrage and you’re not making at least $25K a month profit, you’re going have to suck it up.

SMS: You’re not doing it right?

Kris: Yeah.

SMS: I appreciate you taking some time to speak to us today, Kris. Thank you very much.

About the Author

Joe Whyte has been developing, managing and implementing successful, innovative, bleeding edge digital marketing strategies for Fortune 500 companies for over 7 years.

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3 Comments

  1. Great post Joe. Lots of valuable information, not just on the search arbitrage stuff, but in how to have a great work environment. Also, you'd think it would be just standard to hire the best, brightest, most talent people in the industry, but a lot of people hire what they can get, which means they'll get what they pay for. Good for you Kris!

  2. Very good, thanks kris I learned a lot from this post and scarping other keyword from other sites this can make things so easy, but very profitable. I don't see how someone could fail I can't even believe your releasing info like that I wonder what you know that we don't know :).

  3. Very interesting interview. Thanks, Joe