Welcome to Module 1 - Market Research

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1 Welcome to Module 1 - Market Research In this module, you will learn about the critical first step towards building a successful AdWords campaign -- market and product research. A. Introduction: So What Affiliate Offer do I Promote Anyway? I wish I could tell you that there was a surefire system to finding a goldmine of a niche every time. But in reality, finding a hot niche will take WORK and TESTING. A Numbers Game Ultimately, finding a profitable niche is a numbers game. What I want to show you in this section is how to improve those numbers. So instead of going through 20 affiliate offers to find one good one, you go through three to find one good one. 1 in 3 is a.333 batting average, and with numbers like that, you ll be able to grow your affiliate income very rapidly!

2 I m going to show you several ways of finding and evaluating affiliate offers. The more of these methods you use in combination to evaluate an affiliate offer, the greater your chances of finding a winner. B. Searching for Affiliate Offers in ClickBank Let s walk through two major affiliate networks so that you feel comfortable with the nitty gritty of actually evaluating an offer. ClickBank and Commission Junction are great affiliate networks to get started with as a newbie PPC affiliate. ClickBank.com (http://www.clickbank.com) ClickBank specializes in digital products, which includes ebooks, software, and membership sites. Clickbank has recently announced international support and is presently in the process of rolling out digital products starting with the Spanish language. ClickBank is where I got my start, primarily because there s really no barrier to entry. It takes all of two minutes to sign up and, BAM, you have a clickbank ID that allows you to promote ANY merchant in their system. I want you to go to Clickbank.com right now and click on the Marketplace link at the top next to the Home and Sign Up link. You should see the page below:

3 Now under the category drop-down box, select Society & Culture.

4 As you can see, there is a HUGE listing of affiliate offers in just this category. These are ranked by something called gravity, which is basically a weight average of how many affiliates are having success with the affiliate offer. Quickly Analyzing a ClickBank Offer Now I'll show you how to quickly analyze a ClickBank offer. Let s take a look at the #1 product in this category, Reverse Phone Detective. Take a look at the green line that begins with: $/sale: $16.35: This is the average commission payout (after refunds). I would not recommend promoting any ClickBank product that does not have a payout of more than $10 per sale. If you re paying for every click, it s difficult to make a profit if the payout is only $5, especially with a ClickBank product, where the average conversion rate is typically 1 2%. %/sale: 75.0%: This number is your commission percentage. For ClickBank, 75% is the highest commission you can get paid. In general, the higher the commission, the better. I won t promote a digital product unless I can get at least a 65% commission rate.

5 %refd: 96% & grav: : Pay particular attention to these two numbers, as they are crucial. The %refd is the percentage of total sales for this product that come from affiliates. In this case, 96% is a very high number; it means that affiliates are driving almost all sales for this product. That s a GREAT sign. On top of that, the gravity for this product is , which means there are a TON of affiliates who are making money with this product. Here s the bottom line Top 10 offers of any category in ClickBank have a solid success record with affiliates. However, that doesn t mean you should blindly pick a top 10 ClickBank offer and go promote it. It always pays to do your due diligence and dig a little deeper. C. Looking More Closely at an Affiliate Offer in Clickbank Now we'll take a closer look at the example we are using here, Reverse Phone Detective. Click on the view pitch page link:

6 Notice that the page has a clean and professional look, with one simple search box. I put my cell phone number in the box, and it actually successfully returned my city and state. What s more, when I clicked through requesting a full report, I was taken immediately to a sales page that provided two options: A Premium Membership for $39.95 for one year of unlimited access; or a one-time fee of $14.95 for just the requested report. This whole process is what s called a Teaser Search. The Teaser Search Model converts REALLY well and works great with PPC traffic. There are a couple of different types of Teaser Search Models: Lookup Teaser Search: You type in a name, phone number, etc., to request more information, and you re taken to a page that provides only a partial amount of information. When you request a full report, you re hit up with a one-time fee. Software Teaser: You download a Spyware Remover (free download), and it finds a bunch of nasty stuff on your computer. When you hit the Remove Spyware/Malware button, you re taken to an order page requesting a one-time payment. In order words, you need to register the software before you can actually clean your computer of spyware.

7 Any high-ranking ClickBank product that has a teaser search conversion model is an almost guaranteed winner with PPC traffic. So far, so good! Now I want you to go back to the Reverse Phone Detective home page and click the link on the bottom that says Affiliates:

8 Not only does this merchant have pages dedicated to affiliates, but if you scroll down, you can see the merchant also provides banners, articles and content, keywords, and conversion tracking. Conversion tracking is VERY important. I would strongly recommend going with a merchant that has a system for affiliate conversion tracking or allows affiliates to put their Google, Yahoo, and MSN conversion tracking codes on their thank you page. If you don t know what conversion tracking is at this point, don t worry about it. I ll talk more about that later and why it s really important. A Good ClickBank Offer -- Let's Review Based on everything we ve seen, ReversePhoneDetective.com is a merchant that I would promote with PPC. Here s a recap of why I recommend promotingreversephonedetective.com: 1. Their offer has a high ranking in ClickBank. In addition to having a high gravity and high %refd, this offer has the max payout of 75%. 2. The sales page is clean and simple, with one conversion goal of having the user perform a reverse phone number search. I ll talk more about this in the landing page module: pages that are uncluttered, easy to understand, and focused on having the visitor perform one simple task (purchase a product, download software, perform a search, fill out a form) convert the best. 3. Their offer has a teaser search conversion model.

9 4. Based the affiliate page for this site, it s clear the merchant is very pro-affiliate. A number of resources are provided to help affiliates succeed. 5. The Merchant provides Conversion Tracking (BIG ONE). D. Searching for Affiliate Offers in Commission Junction Now let s shift gears and talk a little about Commission Junction (CJ). Commission Junction (http://www.cj.com) Go ahead and click here to sign up for CJ (that's the shortcut term affiliates use when talking about Commission Junction). Once you ve got your account set up, sign in. Now I'll show you how to look for offers in CJ. Once you've signed into your account, click on the Get Links tab. As you can see, there s a bunch of different categories: retail, travel, education, financial, software, automotive, etc.

10 As we did with ClickBank, I m going to walk you through the process of evaluating an offer. Okay, now go to the Entertainment category:

11 The offer we'll investigate is from VistaPrint.com. On the next page we'll look at it in great detail. If you'd like to review the video of what we just did once again, click this image and it will open in a new window. E. Looking More Closely at a CJ Offer Let s take a closer look at VistaPrint.com.

12 First, we ll go over EPC, Network Earnings, etc., for Vistaprint: 3 Month EPC: $87.08 & 7 Day EPC: $85.77 EPC is the earning per 100 clicks. That means for every 100 visitors affiliates are sending to VistaPrint.com, they re earning around $ Month EPC is just the EPC averaged over the last three months, and 7 Day EPC is, obviously, the EPC average over the last seven days. Is EPC an important metric to look at when deciding what offer to promote? Yes, but it s NOT the only factor you should consider. EPC is really meaningful only within a given niche and whether the offer pays per lead or per sale. Here s what I mean. If you re looking at mortgage offers that pay you every time someone fills out a form (called pay per lead), then you can expect a very high EPC, since the conversion rate on filling out a form will be HIGH. On top of that, mortgage offers have a high payout. However, the average you can expect to pay per click in the mortgage market is MUCH higher than you can expect to pay if you re trying to sell business supplies through vistaprint.com. Why is this important? Remember this formula:

13 What s important is that the difference between your EPC and your CPC is your profit. Disclaimer: Be sure to pay attention to the particular terminology used by the affiliate network. If you are promoting another affiliate program, then please look closely at the terminology used. For example, Azoogle, a popular CPA (cost per acquisition) network uses ECPC which is earnings per 100 clicks. So be sure to pay attention! So how does the EPC of Vistaprint.com compare to similar merchant affiliate offers? Here s how to check that: Click on the VistaPrint.com link in the first column (next to << View Links ). This will take you to the information page about the offer, which we will discuss in detail later.

14 Now, on the line that begins with Category, you ll see a show similar advertisers link. Click on that link:

15 As you can see, VistaPrint.com ranks very well in terms of EPC when compared to similar advertisers. Network Earnings: 5 out of 5 This metric is similar to your gravity in ClickBank. It rates how much success affiliates are having promoting the offer on CJ. Try to pick offers that score a 4 or 5 out of 5. The last column tells you if the offer pays you for every sale, lead, and/or click. VistaPrint pays 16% commission per sales, which is high for a physical product, and a flat $3.50 when someone orders free business cards. Also, notice that VistaPrint offers a Performance Incentive. This means if you make a certain volume of sales in one month, you ll either receive a cash bonus or, better yet, an increased commission. Now click again on the VistaPrint.com link next to >> View Links in the first column:

16 This page gives you tons of specific information about the VistaPrint offer. Here s a couple things to look for: How long is the average return cookie? As you can see, VistaPrint s average return cookie is 60 days. This means that if someone comes to VistaPrint through your affiliate link, you receive an affiliate commission on whatever that person orders within 60 days. What s their three-month EPC trend? This tells you that if this offer is getting hotter or dying out. In the Network Performance Box (middle of the right-hand column) click on view trend link next to the three-month EPC value:

17 You can see that EPC for this offer has gone up considerably over the last 12 months. What, if any, Performance Incentives does this offer have? As we mentioned before, VistaPrint.com does have performance incentives. If you scroll down, you can see them:

18 This is pretty cool. If you make more than $2K in sales a month, you receive a 12.5% increase in commissions. If you make more than $4K in sales a month, you get a 25% increase in commissions. Now, a 25% increase in commissions may not seen like a lot. However, when doing PPC marketing, it s HUGE. Consider what percentage your profits would increase by (if you re ROI is between %) with a 25% increase in your affiliate commissions while your PPC costs stayed the same? I ll let you do that math ;) Are there any promotions running for this offer? For retail merchants, typical promotions can include free shipping, discounts, coupons, etc. As it turns out, VistaPrint currently runs several promotions: Now, check out the upper right corner:

19 Here s where you can access the affiliate links to the various promotions that VistaPrint is running. Let s check out the Sale/Discount promotion. Click on that link: WOW! Check out the SUPER high EPC on some of these discount promotions.

20 One angle to making some good money fast is to launch a PPC campaign on a promotion the very day it s released. You can get very high ROI and profit margins while the promotion is hot and not too much competition has entered the market. A lot of PPC affiliates base their entire business strategy on pushing offers with hot promotions as well as offers around major holidays and seasons. Are there any restrictions on affiliates? Since you re dealing with a lot of big companies and big names on CJ, in many cases you re going to have restrictions on what you can bid on. In particular, a lot of CJ merchants don t allow bidding on their trademark brand-name terms. They say it s to protect their brand. However, in my opinion, the real reason they don t want you bidding on their trademark is because the marketing agency they ve hired is making all their sales of the brand-name terms, and they don t want to compete with affiliates. Now, take a look in the Get Links box: Click on Keyword Link in the lower left:

21 As you can see VistaPrint.com does not allow trademark bidding. This is one rule I won t ever break; otherwise, you risk getting ALL your affiliate commissions reversed. Also, a lot of CJ merchants also require that you, as an affiliate, have a landing page. They do not allow you to go directly to the merchant with their domain name in your display URL. Again, the agency they hired doesn t want to get clobbered by competing with what, in many cases, are much savvier super affiliates. A Good CJ Offer -- Let's Review Let s recap why I believe that VistaPrint.com is a strong offer worth testing out with PPC: 1. The offer has a high EPC compared to other similar merchants. 2. The offer has a solid 16% commissions on sales + performance incentives. 3. The offer has a increasing three-month EPC trend. 4. The offer has multiple high converting promotions. 5. The offer has a 60-day cookie -- which is actually just okay. Some merchants give 90, 120, and even six-month cookies. F. Evaluating Offers on the Search and Content Networks Are Other Affiliates Promoting the Offer? I can't emphasize enough how important it is to do your HOMEWORK before you even test an affiliate offer.

22 Here is one simple, but often overlooked method of market research. Take the time to check if other affiliates are promoting the offer through PPC (Google, Yahoo, and MSN) for a handful of the main keywords of the offer. * If you find lots of affiliate promoting the offer, then that's a GOOD sign. It means there's money to be made. * If you're having a hard time finding even one single affiliate promoting the offer, then chances are the offer does not work well on paid search. A Paid Search Example Recently I investigated some products in the tatoo designs niche for my Niche Detective members. I evaluated the strength of the niche as a whole, and found several factors that made it worth looking at further. I then chose two products, and started doing my research. To see whether affiliates were promoting on the search network, I just went straight to the Google search page and typed in "tattoo designs." Here's what came up: There are the two products I was considering: TatooMeNow.com and Chopper- Tattoo.com. Both show up in the "above the fold" results for the fairly generic keyword "tattoo designs." When I see something like this, I get "cautiously optimistic." Why? The minimum bid for "tattoo designs" is probably pretty high. So when I see these ads on the first page, that tells me that sales are probably good enough to generate decent ROI, even for an expensive keyword. However, I also found a downside. I could find only one affiliate landing page for this niche! Here's the ad: And here's the landing page: Why no more affiliate landing pages? There could be a couple of reasons: * Maybe Google is tougher on affiliates for this particular niche. Which means that affiliates could be having more success promoting on MSN and Yahoo. * Conversions may not be high enough on search for this keyword. In the coming months I'll get into why and how some offers work better on Yahoo and MSN. And I'll also be getting into issues like this with my Niche Detective members every month. But the important thing to note here is that I can't find too many affiliates running ads on search. So these particluar products may, in fact, not convert very well at all on AdWords search.

23 Which leads me to the next place you should research a market -- the content network! Will an Offer Work on the Content Network? Check Content Sites! As far as evaluating whether an offer will succeed on the content network, I recommend you check out article directories such as EzineArticles.com, forums, and major content sites that run Google Adsense (such as About.com). Find your niche on these sites, or find sites that are specifically dedicated to your niche. Look at the content ads that these sites are running, and check to see if any of them are affiliate ads. Again, if you see a lot of affiliate ads running the offer that you're evaluating (or similar offers), then that's a great sign. I'll talk more about how to identify affiliate ads and research affiliate competition in Module 5, so stay tuned! An Example of Content Network Research Here's an example of how some quick research on the content network can really help you get a more realistic idea of whether you should test a product. I decided to see whether affiliates are promoting the tattoo products on the content network -- because if they are, it means the products probably worth testing there. First I went to EzineArticles.com to do research on the content network. All I had to do was: * Search the site for the keyword "tattoos." * Check the Google AdSense ads that are displayed on the article pages. Here's a shot of one of the pages. The yellow arrow points to an ad for one of the products: Right at the top there's an AdSense ad for TattoMeNow.com, one of the products I was researching. When I scroll down further There's Chopper-Tattoo, another merchant I was investigating. The more I searched this Category on EzineArticles.com, the more I I saw AdSense ads for Chopper-Tattoo and TattooMeNow showing up pretty consistently.

24 What does this tell you? That affiliates for these products are definitely running ads on the Google content network! This probably means that the content network is sending good quality traffic in this niche. At least it's worth testing, to see whether that traffic actually converts well for these particular products. G. Researching Offers at Trade Shows and Conferences Why Attend a Trade Show? Trade shows and conferences such as the Affiliate Summit, CJU (Commission Junction University), PubCon, SES (Search Engine Strategies), etc. offer a great opportunity to track down hot affiliate offers to promote. Lots of merchants, affiliate networks, and affiliate managers attend these major venues. Their goal is to recruit affiliates to work with their network and promote their offers. Your goal is to find a handful of potential merchants and/or affiliate networks with whom you want to work. In fact, the most successful offers that I ve ever promoted came from talking to different merchants and affiliate managers at the Affiliate Summit. The Right Way to Approach Merchants Now, let s get one thing straight; there s a right way to do this, and a wrong way. I treat it like an interview process.

25 In fact, I m very straight with people, and I can be flat-out rude when I m interviewing merchants and affiliate managers. I don t take any bull from these people; either they give me the facts, or I walk :-)! Here are the questions I ask them: 1. How much does your top affiliate make per month? If it s anything less than $100K, I walk. If you re a newbie, you may want to lower that to $20K. But keep one thing in mind: It takes the same amount of effort to promote an affiliate offer that has a little bit of search volume versus one that has large search volume. Which will you choose? 2. Are your top affiliates making their sales through paid search? The answer to this is almost always yes. But in some cases, it may not be. You need to ask. 3. If I work for you as an affiliate, how much are you willing to help me, and how much information are you willing to provide me? Ask them if they ll give you a keyword list, set up conversion tracking for you, work with you on a regular basis to help you set up your landing page and get your campaign going, etc. Believe it or not, there are some really great affiliate managers out there who will bend over backwards to help you. Finding a good merchant is a numbers game. You may have to talk to 20 merchants in order to find one you want to work with. So don t get discouraged if you talk with 10 people and you re not satisfied. H. Contacting Affiliate Managers Outside of Trade Shows I understand if you re just getting started in this business and are not in a position to drop thousands of dollars and take time out of work to attend a conference or trade show.

26 Honestly, if you re a total newbie, it s not a good idea to rush to attend a conference, even if you have the money. You ll get a lot more out of it once you understand the basics of the business. Therefore, if you re not in a position to meet affiliate managers in person, you need to find the contact information of the affiliate manager of the offer you re interested in. In many cases, the affiliate information page (ClickBank) or offer detail page (CJ) will provide an , sometimes you ll even get a phone number. The Right Way to Contact the Affiliate Manager If you re contacting an affiliate manager via or telephone, you need to be more diplomatic than the trade show/conference approach. Tell them that you re very interested in promoting their offer and ask them a few key questions that demonstrate your interest. The questions can be similar to the ones you would ask in person. Let's review those quickly: 1. How much does your top affiliate make per month? 2. Are your top affiliates making their sales through paid search? 3. If I work for you as an affiliate, how much are you willing to help me, and how much information are you willing to provide me? Flat out, ask them for help. Some affiliate managers won t reply to your at all, but some will go out of their way to help you get your campaign launched. You can take a guess as to who I choose to work with! Once you ve established a working relationship with an affiliate manager, that manager will give you a TON of insight and tips about how to effectively promote their offers. Also, affiliate managers are not the only people you want to build relationships with. I. Building Relationships with Other Affiliates Ever heard of the cliche Business is all about relationships? A lot of affiliates believe that since they work out of their home and have no customers, they can be completely isolated from the world and not have to worry about building relationships. I m here to tell you that building relationships is VERY important in this business.

27 Not only do I go out of my way to build relationships with other affiliates, affiliate managers, and my business team (if you choose to take it to that level), but all the successful super affiliates I know do the same thing. That being said, the best place to meet with other affiliates, even super affiliates, is to join an affiliate marketing forum or attend a conference (Affiliate Summit, CJU, SES, Ad:Tech, PubCon, etc). If You're New, Try Online Networking Back when I was a newbie, I joined a quality paid affiliate marketing forum. I think I was paying $30 a month, but the value I got back was amazing. I quickly started participating and making new friends. I had a chance to ask questions of super affiliates who were making $50K/month profit (at the time, I was making nothing). Eventually I joined a weekly mastermind group that included several newbie affiliates and some super affiliates as well! Not only did I obtain lots of valuable information and insights from this forum and my first mastermind, but I also received some awesome insights on what markets were hot and highly profitable. That being said, I strongly encourage you to participate in the PPC Classroom forum. Yes, I will be personally answering questions on the forum, along with several other PPC experts. Caveat: Keep in mind there are lots of forums, both good and bad! Often the people that are the loudest are the people that know the least. Joining and participating in a forum will take time. So be sure to choose wisely. J. Why Testing Is the Ultimate Judge

28 Does Your Offer Have Significant Search Volume? There may be situations in which you have an offer in a market you know is hot, but you re unable to contact the affiliate manager to find out how much traffic the top affiliates are driving to the offer. In other words, you have no idea if the offers will get significant search volume with PPC traffic. To be completely honest, in my experience, there s no quick and dirty way to check the amount of traffic you re going to get for a particular affiliate promotion without launching a campaign on AdWords. There are several reasons for this: 1. A lot of the keyword tools out there give inaccurate data on keywords search volume. 2. Even if you had accurate keyword search volume data, it doesn t help, since I m going to show you how to get traffic from a broad spectrum of keywords and not just a handful of high traffic keywords. That changes the equation. 3. On top of that, as an affiliate, most times you won t be making a majority of your sales from the most obvious high-traffic keywords, but rather from mid- to low-traffic lateral and long-tail keywords. So just looking at the search data for a few high traffic keywords won t help. I ll talk more about broad, lateral, and long-tail keywords in the keyword research section. I ll also talk about how you can get a good ballpark estimate on how much traffic you will get by looking at how large a keyword net you can cast. Confused? No worries; we ll address this topic in the Keyword Research Module. Is Market Research Enough to Find a Winning Affiliate Offer? You can spend hours and hours of time researching an offer, but the truth is you really won t know how it well it will perform until you launch your offer on AdWords. But this is not to say that the time you spend researching your offer will be a waste. Market research will dramatically increase your chances of finding hot and highly profitable affiliate offers. Just to give you an idea of how much market research can make a difference: When I was a newbie affiliate and didn t do market research, my success rate was between 1:20 to 1:15; that is, I typically went through offers before I found a single winner. Of the last 8 offers I ve tested, 4 were winners, and 2 of those 4 were home runs.

29 The bottom line is that finding winning affiliate offers is a numbers game, and market research is all about improving those numbers. K. Google Advertising Policies: Don't Get Banned Recently some affiliates have gotten their Google AdWords accounts shut down because they didn't follow Google's acceptable advertising policies. These affiliates were selling products and/or services that Google frowns upon. To protect your account and your income, be sure to stay away from the products and services -- even the topics -- listed below. This applies not only to your ads, but to the content of your landing page and your entire website. Remember that Google's decision is final, and they will shut down your account if you violate their guidelines. I've summarized the acceptable products, services, and niches below. When in doubt, be sure to check Google's complete listing here: pic=9279 Unacceptable Products and Services * Academic aids that include "test-taking" services (where someone takes an exam for someone else), term paper writing services, thesis and dissertation writing, etc. * Drug Testing aids, including drug cleansing shakes and urine test additives. * Alcohol. Restrictions vary depending on on local regulations and the type of alcoholic product. Hard alcohol and liqueurs are not permitted; double-check local regulations about beer, champagne, and wine. * Anabolic steroids, including muscle-enhancing stacks/cycles, bodybuilding steroid supplements, and related content, even if the merchant claims it's "legal."

30 * Hate, violence, and "anti" anything against a protected group. * Bulk marketing, such as non opt-in lists, bulk software, and bulk messaging. * Copyrighted material (where you don't hold the copyright). * Replica/counterfeit designer products. * Data entry affiliate programs, including ads for sites that promote the creation/data entry of more ads that direct users to the same site. * Dialers (these cut your Internet connection and establish a new connection to a premium rate number). * Drugs and drug paraphernalia, including herbal drugs such as salvia and magic mushrooms. * e-gold, including e-gold exchange, e-gold investments, and e-gold accounts. * Endangered species products, obtained from threatened species such as elephants, sharks, tigers, whales, rhinoceroses, or dolphins. * Fake documents, including fake IDs, passports, social security cards, immigration papers, diplomas, and noble titles. * Fireworks and pyrotechnic devices. * Gambling, including online casinos and gambling activities such as sports books/sports betting, lotteries, bingo, poker, oddsmaking and handicapping, online casino software, gambling tutoring, gambling related ebooks. * Hacking and cracking software, servers, or websites; cell phones and other devices; mod chips; cable/satellite descramblers; copied or backed-up software, CDs, or DVDs; products or services that circumvent digital rights management technologies for copyrighted works. * Ad clicks or impressions, including pay-to-click, pay-to-view, auto-surfing, automated ad clicking, and other guaranteed traffic programs. * Miracle cures. Example: "Cure cancer overnight" * Mobile content services ads are not allowed UNLESS your ads, landing page and website meet the conditions on this page. * Political advertising is allowed ONLY IF your ads, landing page and website meet the conditions on this page. When in doubt, * Prescription drugs and related content are not allowed UNLESS your ads, landing page, website, AND the pharmacy meet the conditions on this page. * Prostitution * Scams/phishing for personal information * Sexual & adult content is allowed ONLY IF your ads, landing page and website meet the conditions on this page. * Solicitation of donations/funds is allowed ONLY IF your ads, landing page and website meet the conditions on this page. * Template sites for ad networks such as AdSense, including products and services that create templates or pre-generated websites solely intended to profit from ads. * Tobacco products, including cigarettes, cigars, tobacco pipes, and rolling papers. * Traffic devices, including radar jammers, jamming license plate covers, traffic signal changers, and related products. * Weapons, including firearms, firearm components, ammunition, balisongs (switchblades), butterfly knives, and brass knuckles.

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