Google, Advertising, and the Recession
By Max | March 25, 2008
I know some of you have been wondering where I have been. I am still here, but my hiatus was purely do to laziness. I’ll try to write a couple posts over the next few days…
The jury is still out on whether the US is currently in a recession. Some genius economists have to measure GDP growth and see that is negative for two consecutive quarters before calling it an official recession. One thing is for sure, business has slowed.
One of the first things to get cut in a recession is advertising. I think we are going to see some weaker results from internet advertising than in the past few years. If you want to know what I am talking about, just take a look at Google’s stock price over the last few months. Apparently, they are not immune from the business cycle. They are still growing, but just not as fast as everyone expected.
I am seeing this carry over into my sites’ earnings. All three of the major ad networks that I run ads on are giving me reduced payouts for the same traffic as I was getting last year. I would like to hear from folks who are seeing the same thing just so I know its not completely my fault. 
What does this mean for us in the web business? It is important not to panic. For one thing, recessions are never the end of the world. In the end, the economy always comes roaring back. Because of this, I believe there is an opportunity for some serious profit. Timing could be important, and there is certainly risk of further earnings deterioration, but I believe that this spring and summer will be a great time to buy websites. Think about it… Some frustrated webmaster out there has seen his earnings drop each month. He may just think its his own bad luck or increased competition in his niche. You need to get out there and find these guys. They might be ready to sell thinking they’ll avoid further loss. You can swoop in and snap up a decent site at a reduced cost. When the economy and the earnings come back, you’ll make a great return.
Here’s what to look for…
1. Steady or increasing traffic - This is most important. You want a site that will be around for awhile earning so you can whether the storm.
2. A timeless niche - You don’t need something that’s going to be around forever, but you want to buy a site whose subject will still be relevant once the economy recovers.
3. CPA income - I believe CPA income streams should do better than other forms like CPM and CPC. The reason is that companies making a certain profit per sale are willing to pay a certain amount to get that sale. Why would they reduce their payout if the program is still profitable for them? They only pay you when they get paid, so it doesn’t hurt them. Reduced marketing costs in other forms of advertising could indirectly affect CPA campaigns, but I think it will be a less immediate impact than CPM or CPC. Some CPA campaigns might even take off? Are there any job hunting CPA campaigns to run for example?
Happy bargain hunting.
Topics: News | 9 Comments »
Last Week Recap
By Max | November 9, 2007
A few of you in the comments have asked what I have been working on. Unfortunately the answer is not as much as I would like to. I am currently looking for a vbulletin skin guy who can redesign the skin for one of my forums. If you know of anyone let me know. I am not interested in paying top dollar, I just need a functional skin.
Also, I have been brainstorming ways to get ff-fan.com on the frontpage of google for the “Final Fantasy” keywords. I think this will go a long way to improving the traffic on the site, taking it to the next level. As Matt pointed out in the comments, this blog is now a PR4. If you have any ideas for a link exchange let me know. One thing I am thinking of is giving a link from this blog in return for a link from your site to ff-fan.com.
A sample of what I am looking for is:
“Check out this great Final Fantasy resource I found.”
If you are interested in the exchange, please email me at max(at)maxtower.com
Topics: News | 5 Comments »
Website Income - October 2007
By Max | November 2, 2007
I am probably the laziest poster on the planet. Someone might actually read this website if I could manage to crank out a post once a day. Its quality, not quantity right?
Anyway, October turned out to be a decent month! The grand total was $5,010.29. The digg I received in the middle of the month really helped out to push me over $5k.
Google Adsense: $2496.23
TribalFusion: $1819.79
Kontera: $609.57
ValueClick: $65.42
ShoppingAds: $19.28
Topics: Monthly Income | 10 Comments »
Be On The Lookout
By Max | October 23, 2007
I have been checking Sitepoint frequently lately, and there just aren’t a lot of quality sites for sale right now. The few decent ones that have popped up got sold pretty quickly so I missed out on even trying to evaluate. This game takes patience. Has anyone bought anything recently? I would love to hear about your experiences.
Topics: Website Buying Process | 6 Comments »
Getting Dugg!
By Max | October 20, 2007
One of my websites got dugg the other day! I really love it when that happens. If you want to launch a successful website, getting to the frontpage of digg is one of the best things you can do to get exposure. If I was a little more serious about this blog, I would be working my ass off trying to get a quality article to the front page of digg.
For the site in question, my normal traffic is around 6000-7000 uniques per day. With the help from digg, I received 34,000 uniques in one day. Thats incredible. The best part about all this is that I didn’t even know it happened until a couple days later. That just goes to show the upside potential of websites. Some forum user on my site posted an article, and then someone else must have submitted it to digg. Two days later I check my statistics and found out I made three times as much as I do on a normal day! Running a website isn’t a passive investment, but its as close as any other business you’ll find.
Topics: News | 5 Comments »
ShoppingAds Followup - AuctionAds & ShoppingAds Both Suck
By Max | October 18, 2007
A couple weeks ago, I got an email from Patrick Gavin from MediaWhiz. He was starting a new ad network called ShoppingAds. I thought I would give them a shot since my AuctionAds campaigns have done progressively worse month after month.
I am sorry to report that ShoppingAds is no better and possibly worse than AuctionAds. My previous AuctionAds reviews are here:
AuctionAds Review 1
AuctionAds Review 2
My worst month with AuctionAds still managed to make me $33. I also got a decent number of clicks. ShoppingAds performance is just gross right now. For the month to date, I have displayed 82,326 impressions resulting in only 36 clicks. For those 36 clicks I am earning $8.42. The pay per click isn’t bad at all. The problem is that I am not getting nearly as many clicks as I would like. With AuctionAds, I got click-through rates over 1% on good days. Now with ShoppingAds, I am getting an abysmal 0.05% CTR.
Compare the two ad units.
ShoppingAds: |
AuctionAds: |
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Due to the disappointing performance of these two product based ad networks, I am going to try some others. I really think my ipod site should do well with product based ads, so I am going to try TTZMedia and WidgetBucks. TTZMedia offers very specific product targeting which could help the bottom line, while WidgetBucks has a really nice presentation for their ads. Look for reviews of them in a week or so.
WidgetBucks |
TTZMedia |
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Topics: Ad Network Review | 4 Comments »
The Big Leagues
By Max | October 11, 2007
While I was reading Markus’s blog, I stumbled across this post. Markus runs the largest free dating site, and he pointed out a sales listing of one of his competitors. I guess he’s gloating about putting them on the auction block.
The sale is posted at iMergeAdvisors. I haven’t heard of them before, but it appears they broker deals for large web businesses. I looked through their listings and saw that they have businesses ranging from $500,000 up to $25 million.
I hope one day I can seriously browse their listings. Although I think I would prefer to sell one at those kinda prices.
Topics: Website Buying Process | 1 Comment »
Final Fantasy Fan - One Year In Review
By Max | October 10, 2007
Last year on October 3rd I purchased my Final Fantasy site for $15,000. Since it has been a little over 1 year, I thought I would update you with the results of my first attempt at the webmaster game.
The total earnings for my site were $10,739.06. Assuming, I could sell the site for exactly what I paid, this represents a 71% gain. I believe in a worst case scenario, I could sell the site for $10,000 which would yield a respectable 38% ROI. I have since seen Final Fantasy sites with less traffic sell for more than 10,000. My target return is 50% considering the returns possible on passive investments and the work involved with websites. Here’s the ad network breakdown:
Google Adsense: $5,244.65
Tribalfusion: $3,172.63
ValueClick: $1948.78
Direct Ad Sales: $232
Azoogle: $141
This first site has been a lot of fun, and it has encouraged me to pursue even more websites. I did learn quite a bit from this first site. I made a few mistakes that I hope to correct in the future.
Mistake #1: I paid too much.
I feel like I could have bought this site for around $12,000-$13,000. I went ahead and put in a BIN bid, but looking back, I think I could have purchased the site for less as I didn’t really try too hard to negotiate. You make money on websites (and pretty much everything else) when you buy not when you sell. In any case it will only take me a couple months to make up the difference.
Mistake #2: I skimped on the server.
Being new to the field, I really skimped on the server. The guy I bought it from was a big help, but he didn’t really clue me in to the actual server requirements. I now have a much better idea of how much server is required for the number of visitors a site gets. When you get down to it, servers are cheap and overkill should not be a big concern. You can always add a site to it, or dial it back later. I spent far too much time in the first month switching servers and worrying about the RAM when I could have easily just spent a little extra initially. As a result of this I really didn’t make any money my first month. Also I now have a rule that I will only use a hosting company that has 24 hour phone support. Email ticket systems suck when you want to call someone and yell or if you don’t have convenient internet access.
Mistake #3: I underestimated the impact of product cycle on traffic.
My traffic has slowed quite a bit from when I initially purchased the site. This site is closely tied to the success of the Final Fantasy franchise. I bought the site about one month before the new Final Fantasy 12 game came out. As far as Final Fantasy traffic on the internet, this had to be near a peak. There are other games released quite often, but Final Fantasy 12 was the last major release. If I ever sell the site, I will definitely look to get out around the time of another major release. Fortunately, due to ad optimization I am still making about the same as I was when I purchased the site.
Knowing these mistakes naturally leads to the question of what did I do right. I think I made a couple of decent moves with this site that has impacted its success.
Accomplishment #1: I worked on the bottom line.
While I agree that providing a great user experience can lead to success, I also understand that most of the money you make in webpublishing comes from casual internet users who find your site one way or another and click an ad that appeals to them. Certain niches are good for marketing affiliate products to savvy users, but in the video game genre, most of the revenue comes from young people who don’t have a lot of cash to spend. That means CPM and CPC are your bread and butter. They find your site through a search engine, take what they want and then leave. Hopefully a certain percentage clicks an ad. Knowing this led me to the decision to implement some spammier ad schemes. I have a very large adsense block running on the page, as well as a pop under campaign. If I were designing the site keeping the users in mind I would have used less intrusive ads. Also the deal came with a forum site that earned very little. Forum users can be demanding of your time if you aren’t careful. I believe its prudent to spend very little time responding to these requests since they aren’t typically contributing to your bottom line. Time is money after all, and your time would be better spent selling ads or building traffic than catering to users who don’t generate revenue.
Accomplishment #2: Improving Search Results
I have quadrupled the search traffic this site was receiving when I bought it. I think that is pretty significant given the number of fan sites dedicated to this genre. When I bought the site it hardly ranked in google at all. One thing I focused on was targeting the key phrase “Final Fantasy 7″. I noticed that most sites used the more appropriate “Final Fantasy VII” key phrase referring to the game. However I found that most internet searches after “Final Fantasy” itself were for the phrase with number “7″ not Roman numeral “VII”. FF7 is the most popular game in the series, and still generates a lot of search traffic. Check out my google ranking for “Final Fantasy 7″. My goal for 2008 is to get to the front page of google for the more popular search term “Final Fantasy”. I also want to get a head start on “Final Fantasy 13″ before that game comes out.
Topics: Article | 7 Comments »
Lets All Try To Learn Something
By Max | October 6, 2007
So the other day I mentioned the site that was for sale. It was quickly bid up to $15,000 while monthly incomes were shown as about $300. I looked at the traffic, and in my estimation its getting enough traffic to produce somewhere between $600-$1000/mon. Its hard to say because the niche is Singapore, and if a lot of traffic is foreign the ad rates might not be as high as what I am used to with American sites.
I am sure the new owner must have some plan for the site, because $15000 is way too much to pay for $300 monthly income. Thats about a 4 year payback which is a long time in the web game. This is the cool part though. We get to watch exactly what changes are made to the site to optimize revenues. Although, I know a few things, I don’t claim to be a guru on the subject. I am sure some of my competitors are better at monetization of traffic, so we should watch and see what changes he comes up with. The more money you can squeeze out of these sites the more competitive offers can be made opening up options quite a bit.
Right now I see 4 main ads, one banner across the top, two adsense banners and one adsense skyscraper. Right away I would change this setup. It would be smart to change the position of the banner and the adsense banner. Since the adsense banner is pay per click, it should be featured most prominently. The other banner can be positioned lower since it isn’t pay per click.
I’d probably also add a few more CPM ads, possibly removing one of the adsense spots to do it. We’ll see what the new owner comes up with.
Check out the current ad arrangement. It won’t likely change for a week or two while the new owner is transferring the site.
Topics: Earnings Optimization | 3 Comments »
Site For Sale
By Max | October 4, 2007
I ran across this listing the other day, and have been keeping my eye on it. It looks like it is a little out of my price range right now, but I think the site is solid. Revenues could definitely be increased given the 3000 uniques per day the site is receiving.
It is a forum site with Singapore as its focus. You know how I feel about forum sites! Also the niche is good, because Singapore is never going to go away. If you were to purchase this forum and run it well, you could easily have a site that continues to earn year after year.
As usual if you are serious about this site, make sure you do your homework. I just checked his adsense stats and there is no mention of the site where the stats came from. I usually like to see a URL channel listed in the screen shot. I think this site will probably sell for the $15,000 BIN.
EDIT:
Wow, in the 10 minutes since I made this post someone has already offered a BIN price. Go ahead and make a standby offer if you are genuinely interested as top bidders will often bail for a number of reasons. No, it wasn’t me who made the offer.
Topics: Buy Alert | 5 Comments »
