Mike Saakyan has been working with traffic for 20 years. Over the last 7 years, he has focused primarily on the MFI niche. Three years ago, Mike launched LeadAvenue, his own CPA network in the US and now he intends to work with affiliate marketers from Russia. We asked Mike to tell us about his experience of working with payday loans in the US, how much it is possible to earn on microloans, and what traffic sources serve the purpose.
How did you find yourself in the payday loans niche?
My professional IT career began after graduation from the university. I provided services to many online businesses, particularly to those specialized in lead generation and loans. Within a few months, I established business contacts and figured out how to work online.
In 2015, I ventured to launch my own website focused on microloans. All tasks, including analytics, SEO, and content, I performed on my own. Three months later, the website was at the top of Google’s ranks. Income has grown significantly. In six months, the site’s margin reached $6k, although it was last in the search result listing.
I was able to hire an SEO specialist, designer, and copywriter. By the end of the year, the monthly income from the website rolled over to $30k. So, this was my starting point in the microloans niche.
The last page of Google SERPs? What rank, at least approximately?
If you enter in the search field “microloans online”, Google will offer around 13 pages of results. The result may vary based on a specific user, but not much. Sometimes my website was ranked 92, 94, 97, and so on.
How did you launch your own CPA network? How did the idea come to your head and what challenges did you face at the beginning?
I have had many satisfied direct lender clients. That is why I got into this business. They trusted me, and I offered them to sell leads. With the buyers, everything was established and streamlined from the beginning; the only challenge was to ensure a continuous traffic flow. The SEO specialist did his job well, that is why we were ranked #4 in Google, and the monthly income remained $25k - $35k during the year. However, new competitors appeared daily. To hold the ground and expand our reach, we launched five more websites. Yet still, some competing companies were doing pretty well too — they gave us some hard time.
We had to adapt to new circumstances, so we launched an affiliate program to enlist the support of competitors. We had high-quality buyers and a smoothly running workflow — 3 out of 5 publishers agreed to cooperate.
How soon after launching the website did you set up the CPA network?
The site was running for a year and a half when we launched an affiliate program. Another six months later, we established a network of reliable partners that work with us till now. Naturally, many webmasters come and leave, and then come back again. We had nothing against webmasters testing other affiliate programs, but we appreciate reliable partners that stay with us no matter what. We look forward to long-term and mutually beneficial cooperation.
You have been working for 10 years in the finance niche. Where is the MFI niche the most developed?
Undoubtedly, the US market is the broadest, with the largest number of borrowers. As for the webmasters, countries with the largest volume of MFI traffic are Russia, Ukraine, Belarus, Poland, Romania, China, Taiwan, Singapore, Hong Kong, and Japan.
They have better publishers and the highest possible quality traffic. That is to say, you don’t need to be in the US. Modern means of communication allow working from anywhere around the globe. For instance, my team includes people from Russia and Armenia.
How much do finance affiliate programs pay to webmasters in the US? Do they pay for the confirmed application or for granting a loan?
In the US market, a webmaster receives an average of 60% based on the revshare model. Our affiliate program offers up to 90% revshare because we do appreciate their time and contribution. We work with the PPL (pay per lead) model: payments are up to $250, of which 90% are paid to publishers.
What traffic sources are relevant today? How to break into the TOP of search results in the very competitive MFI niche?
Before launching the new website, we worked hard to expand our social media presence. We paid for ads. Advertising on Facebook is challenging as loan ads violate Facebook rules and policies. Having spent a total of $10k on advertising, a few months later, we noticed some results, but they were insignificant. I do believe that SEO is one of the most secure and reliable traffic sources. As for how to get to the first search page, I would recommend analyzing competitors’ content, content volume, and keywords they use. Then, try to get ahead of them in some way.
Purchase dropped domains and backlinks, establish a PBN, and make guest posts on popular finance blogs. Create useful informative content, for example, “How to get a $2 000 loan in 10 minutes.”
What should a webmaster who has never worked with the US microloans market begin with? Create a loan-oriented website, buy ads, or work with social media?
You need to compare with the results that appear in Google SERPs. Try to target smaller cities, post the company’s data in Google search and on Google Maps. For example, if you create a microloan website for Salt Lake City residents, it is most likely that it will be ranked higher among other local sites than if you were targeting Los Angeles.
The population of Salt Lake City is around 200 000 people, and some of them need loans. Of course, you will have traffic, but the competition will be moderate and manageable, not the same as in a large city.
You can even buy a local address to make your site look more credible. Be sure to note that you do not work with clients at the specified address. It is worth trying such tools as email marketing, SMS, and SMM. They will be more efficient in our industry than Google Ads. Email marketing works in the US pretty well. If the letter contains the “Unsubscribe” button, you don’t need to get users’ content for the newsletter.
How do you select the right cities with lower competition?
You should search. I do not have a ready-made list of cities to choose from. You need your own selection criteria. You may just poke your finger on the map of the US and see what happens. You may look at the legislation of certain states; Wikipedia might be useful for that. Choose states with not very strict legislation and focus on cities with a population of 50 000-100 000 people. Sort out keywords and evaluate the level of competition. Then repeat the same procedure for another city — also select keywords and estimate the competition.
What restrictions for MFI are there in western markets? Are there states in the US where microloans are prohibited?
While creating your ad content, deploy a personal approach. For example, write “short-term loans” instead of “microloans”. Microloans are legal in 27 states, 9 others allow using landings with certain restrictions. In the remaining 14 states and the District of Columbia, microloans are prohibited.
We have a network of lenders that allows us to reach most states by the means of the so-called Tribal Lending Enterprise. These are financial institutions located on the territory of the indigenous population and run by people from the tribe. They provide the same array of services as familiar microfinance institutions. Since they are located in the protected sovereign territory, they are not subject to standard restrictions.
How do search engines and regulatory authorities behave towards microloan websites in western countries?
In 2016, Google announced a global ban on microloan advertising. Up to the present, it classifies activities of microfinance institutions as illegal, placing it on the same footing as the sale of weapons, explosives, and drugs.
Google does not publish microloan ads. However, on other search engines, such as Yahoo, microloan ads are still legal. Potential customers can find lenders via Google search. However, microloan ads are not placed in ad units in the first positions or on the side of the page.
How effective are Yahoo ads? Do you have some data?
Yahoo does not prohibit microloan advertising. They have general guidelines on what ads should not contain. The rules are not complicated. Yahoo search has more than 117 million unique searches monthly. Hence, if you ignore Yahoo ads, you lose 30% of your potential market.
What is the target audience for payday loans? What MFI clients are worried about, and how to attract them?
According to recent research, women in their 30s and 40s are more likely to apply for a microloan. At most, they are single women who face financial difficulties. Single parents are also part of the target audience. They live paycheck to paycheck, and if something unexpected happens, they have no savings. If expenses exceed the regular limits, they have to look for additional funds.
These people have a non-perfect credit history. They do not have savings. That is why banks will reject credit. They need a quick solution to the problem, but at the same time they do not want to be debt-stricken — this is very important for them. If you explain to your clients that the due date can be delayed and provide the details on how to manage payments, they will fill out the form offhand.
To sum up, a newcomer to the US market should offer payday loans to single parents from small cities using SEO and SMM, right?
Yes. This approach is efficient not only for beginners. If you are confident in your traffic and your activities pay off, that is great. However, if you are not just entering the industry but still experience some difficulties, try the above-mentioned method.
How has the pandemic affected the microloan market? What is your immediate forecast?
Many people lost their jobs. If people don’t get paid, they will not take out a loan. Altogether, the industry will bear losses. May and June were the worst months. Profits halved. But as soon as people began getting unemployment compensations, they felt safe, and in July, financial receipts began growing. In August, Americans will receive their next payments, so we can expect that the income of microfinance institutions will not decline. We expect to reach the numbers of the “pre-COVID-19” period somewhere in December.
What are the average earnings of a webmaster in the payday loans niche?
On average, a good webmaster can earn around $25k per month with no extra effort applied. We also have webmasters who make $800k monthly. Still, everything depends on a specific website and the quality of marketing. If you have the right skills, there is no upper limit.
You do have experience in launching such websites. Would you reveal to us how much we need to invest in the website to receive the above-mentioned $25k-35k?
As for the time investment, the more the better. We managed to reach the mentioned income after one year and a half — a team of four people worked on the website daily.
As for the money, it depends on the location of your team. For example, in Russia salaries are around $5k a month, and marketing costs are around $2k.
After all, all investments will be justified if you manage to reach an income of $25k per month. But above all, try to balance all your decisions with your capabilities. Despite the level of your current income, reinvest at least 30% in the business.
That’s about it for now. Those of you who want to have a bash at the US MFI market or ask questions can contact LeadAvenue сustomer support or directly Mike via Skype or Viber.