How Do Websites Make Money?

How Are Websites Making Money?A look at $30 Million in Website Sales Flippa.com User Meetup – Feb 2013 Andrew Knibbe – Operations Manager, Flippa.com

How Are Websites Making Money? • Approach • Average Site Profile • Niches • Site Types/Models • Advertising • Affiliate Programs • Platforms • Questions

Approach• Transaction data for all established websites sold in 2011 and 2012• Over 8,000 transactions worth almost $30 Million• Mix of seller provided and directly sourced data• Focus on median performance 2 - 4 - 4 - 4 - 6 - 6 - 6 - 12 - 16 – 40 [mean=10, median=6]• Compared changes between 2011 and 2012

Average Site Profile in 2012The Baseline• Monthly Revenue: $133 12%• Monthly Uniques: 2,097 38%• Monthly Revenue per Unique: $0.04 15%• Sale Price: $493 1%• Sale Multiple: 8 x monthly revenue 21%• Built on a standard CMS• Single Monetization Method

Tier 1 Niches – 70% of Sales Volume Internet Marketing Entertainment Health & Beauty Home Internet Services Technology Hobbies Business Travel Gaming

Tier 1 Niches – Call Outs• Gaming and Business sites are good earners• These + Hobbies and Tech tend to beat the market when selling• Gaming/Tech have high traffic but low user yields• Business sites have best revenue yielding traffic• Internet Marketing sites tend to be short-term earners (ie low sale prices)• Gaming site capital/revenue yields GREW in 2012

Tier 1 Niches – Capital/Revenue Yield Median Monthly Revenue $- $50 $100 $150 $200 $250 $300 $350 $400 Gaming Travel Business Hobbies Technology Internet Services Home Health & Beauty Median Sales Price Entertainment Median Monthly RevenueInternet Marketing $- $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 Median Sales Price

Tier 1 Niches – Traffic Yield Median Visitor Value $0.00 $0.02 $0.04 $0.06 $0.08 $0.10 $0.12 $0.14 $0.16 Gaming Travel Business Hobbies TechnologyInternet Services Home Median Monthly UniquesHealth & Beauty Median Visitor Value Entertainment Internet Marketing - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Median Monthly Uniques

Tier 1 Niches – wheretogetmovingboxes.com• Home Niche• ShareASale• PageRank 1• $69 Monthly Revenue• 301 Month Uniques• Sold for $747 (24 bids)

Tier 2 Niches – 24% of Sales Volume Employment & Education Electronics Finance Social Media Family News Sport Automotive

Tier 2 Niches – Call Outs• Family, Social Media and Finance are strong earners: all grew in 2012• Automotive, News, Family and Employment beat the market wrt sell price: all up 20% in 2012• News sites tend to sell for more but need A LOT of traffic to earn revenue• Finance earns 20 cents per unique: double in 2012 on 2011• Sport and Family not massive in raw traffic but getting over 7 cents per unique• Social Media sites had strong financial and traffic performance: fad or trend?

Tier 2 Niches – Capital/Revenue Yield Median Monthly Revenue $- $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 Automotive Sport News Family Social Media Finance Median Sales Price Electronics Median Monthly RevenueEmployment & Education $- $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 Median Sales Price

Tier 2 Niches – Traffic Yield Median Visitor Value $0.00 $0.05 $0.10 $0.15 $0.20 $0.25 Automotive Sport News Family Social Media Finance Electronics Median Monthly UniquesEmployment & Education Median Visitor Value - 2,000 4,000 6,000 8,000 10,000 12,000 Median Monthly Uniques

Tier 2 Niches – iKidApps.com• Family Niche• Link Share (Apple)• PageRank 4• $1,300 Monthly Revenue• 19,000 Month Uniques• Sold for $19,100 (35 bids)

Site Type Performance Blog Ecommerce Directory Services Social Forum Marketplace Reviews

Site Type – Call Outs• Forums still beat the market - despite strong sell price decline in 2012• Review sites earn roughly as much as a blog - but sell for double!• Review sites saw a massive increase in traffic in 2012• Forums, Directories and Social sites struggle to convert traffic into revenue (Forums down 60% on 2011)

Site Types– Capital/Revenue Yield Median Monthly Revenue $- $100 $200 $300 $400 $500 $600 $700 $800 $900 Reviews Median Sales PriceMarketplace Median Monthly Revenue Forum Social Services DirectoryEcommerce Blog $- $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 Median Sales Price

Site Types – Traffic Yield Median Visitor Value $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 Reviews Median Monthly Uniques Median Visitor ValueMarketplace Forum Social Services DirectoryEcommerce Blog - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Median Monthly Uniques

Site Types – BestHydrationPacks.com• Review Site• Amazon Associates• PageRank 1• $24 Monthly Revenue• 870 Month Uniques• Sold for $210 (19 bids)

Advertising Performance Google Adsense BuySell Ads Infolinks Chitika DoubleClick.Net Openads/OpenX

Ad Performance – Call Outs• 20% drop in revenue in 2012• Traffic yield tends to be half of what the market is getting• Plus, all yields dropped in 2012 (despite total market yield being up 15%)• BuySellAds sites sold for good prices based on having more traffic

Ad Performance – Capital/Revenue Yield Median Monthly Revenue $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500Openads/OpenXDoubleClick.Net Chitika Infolinks BuySell Ads Median Sales PriceGoogle Adsense Median Monthly Revenue $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 Median Sales Price

Ad Performance – Traffic Yield Median Visitor Value $0.00 $0.01 $0.02 $0.03 $0.04 $0.05 $0.06 $0.07 $0.08 $0.09 $0.10Openads/OpenXDoubleClick.Net Chitika Infolinks BuySell Ads Median Monthly UniquesGoogle Adsense Median Visitor Value - 20,000 40,000 60,000 80,000 100,000 120,000 Median Monthly Uniques

Ad Performance – CrispMe.com• BuySell Ads• PageRank 3• $61 Monthly Revenue• 110,000 Month Uniques• Sold for $9,450 (55 bids)

Affiliate Performance Commission Junction Amazon Associates SkimLinks Link Share CPAlead ShareASale ClickBank Affiliate Buzz

Affiliate Performance – Call Outs• Commission Junction and Link Share are yielding especially strong revenues: both up in 2012• … largely due to being 50% better at visitor revenue generation (over 8 cents/unique)• Amazon Associates not a strong performer and flat in 2012

Aff. Performance – Capital/Revenue Yield Median Monthly Revenue $- $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000 Affiliate Buzz ClickBank ShareASale CPAlead Link Share SkimLinks Amazon Associates Median Sales PriceCommission Junction Median Monthly Revenue $- $500 $1,000 $1,500 $2,000 $2,500 $3,000 Median Sales Price

Affiliate Performance – Traffic Yield Median Visitor Value $0.00 $0.02 $0.04 $0.06 $0.08 $0.10 $0.12 $0.14 $0.16 $0.18 $0.20 Affiliate Buzz ClickBank ShareASale CPAlead Link Share SkimLinks Median Monthly Uniques Amazon Associates Median Visitor ValueCommission Junction - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 Median Monthly Uniques

Affiliate Performance – LoveTheOutdoors.com• Amazon Associates• PageRank 3• $1,200 Monthly Revenue• 118,000 Month Uniques• Sold for $37,100 (32 bids)

Platform Performance WordPress Joomla! vBulletin Drupal Blogger tumblr Pligg

Platform Performance – Call Outs• Popular platform = strong sell price• Wordpress up 8% in CMS share in 2012• Joomla still powering well performing sites• Drupal and Blogger are equal wrt median revenue & traffic BUT Drupal doubled in 2012 while Blogger halved• Tumblr went from zero to hero in 2012

Questions – Take-Outs• Website performance down in 2012 compared to 2011• Offset by more effective monetization in 2012• Median sale prices have held steady• Not all Niches were created equal: Finance, Business, Home, Entertainment/Gaming and Family niches tend to outperform the market• Review sites are seeing a performance comeback• Ad revenue is generally in decline• Affiliate revenue is generally growing• Wordpress growth in unstoppable. Keep an eye on Tumblr

Questions How Are Websites Making Money?Contact Flippa• Flippa.com/blog• facebook.com/flippamarketplace• @flippa• support@flippa.comContact Andrew• andrew.knibbe@flippa.com• linkedin.com/in/andrewknibbe• @andrewknibbe

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How Do Websites Make Money?

by Flippa.com on Feb 18, 2013

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