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How Do Websites Make Money?

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What's better than owning websites? Owning money-making websites! Flippa's operations manager, Andrew Knibbe, gathered 18 months of data to find out what kinds of sites make the most money.

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How Do Websites Make Money?

  1. 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
  2. How Are Websites Making Money? • Approach • Average Site Profile • Niches • Site Types/Models • Advertising • Affiliate Programs • Platforms • Questions
  3. 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
  4. How Are Websites Making Money? • Approach • Average Site Profile • Niches • Site Types/Models • Advertising • Affiliate Programs • Platforms • Questions
  5. 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
  6. How Are Websites Making Money? • Approach • Average Site Profile • Niches • Site Types/Models • Advertising • Affiliate Programs • Platforms • Questions
  7. Tier 1 Niches – 70% of Sales Volume Internet Marketing Entertainment Health & Beauty Home Internet Services Technology Hobbies Business Travel Gaming
  8. 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
  9. 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
  10. 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
  11. Tier 1 Niches – wheretogetmovingboxes.com• Home Niche• ShareASale• PageRank 1• $69 Monthly Revenue• 301 Month Uniques• Sold for $747 (24 bids)
  12. Tier 2 Niches – 24% of Sales Volume Employment & Education Electronics Finance Social Media Family News Sport Automotive
  13. 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?
  14. 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
  15. 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
  16. 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)
  17. How Are Websites Making Money? • Approach • Average Site Profile • Niches • Site Types/Models • Advertising • Affiliate Programs • Platforms • Questions
  18. Site Type Performance Blog Ecommerce Directory Services Social Forum Marketplace Reviews
  19. 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)
  20. 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
  21. 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
  22. Site Types – BestHydrationPacks.com• Review Site• Amazon Associates• PageRank 1• $24 Monthly Revenue• 870 Month Uniques• Sold for $210 (19 bids)
  23. How Are Websites Making Money? • Approach • Average Site Profile • Niches • Site Types/Models • Advertising • Affiliate Programs • Platforms • Questions
  24. Advertising Performance Google Adsense BuySell Ads Infolinks Chitika DoubleClick.Net Openads/OpenX
  25. 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
  26. 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
  27. 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
  28. Ad Performance – CrispMe.com• BuySell Ads• PageRank 3• $61 Monthly Revenue• 110,000 Month Uniques• Sold for $9,450 (55 bids)
  29. How Are Websites Making Money? • Approach • Average Site Profile • Niches • Site Types/Models • Advertising • Affiliate Programs • Platforms • Questions
  30. Affiliate Performance Commission Junction Amazon Associates SkimLinks Link Share CPAlead ShareASale ClickBank Affiliate Buzz
  31. 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
  32. 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
  33. 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
  34. Affiliate Performance – LoveTheOutdoors.com• Amazon Associates• PageRank 3• $1,200 Monthly Revenue• 118,000 Month Uniques• Sold for $37,100 (32 bids)
  35. How Are Websites Making Money? • Approach • Average Site Profile • Niches • Site Types/Models • Advertising • Affiliate Programs • Platforms • Questions
  36. Platform Performance WordPress Joomla! vBulletin Drupal Blogger tumblr Pligg
  37. 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
  38. How Are Websites Making Money? • Approach • Average Site Profile • Niches • Site Types/Models • Advertising • Affiliate Programs • Platforms • Questions
  39. 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
  40. 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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