🏎️ How Does RPM Affect Website Values?

RPM & industry benchmarks, update on "Project Cashflow," real due diligence questions, .eu domains suspended, and more great reading below.

Happy New Year and Welcome Back!

Our first issue of Website Investing Weekly for 2021 will bring you up-to-date with what’s going on in the world of website investing and alternative related asset classes.

You asked for it, Ben, so we’ve added a table of contents below😀 How many of you would like us to continue doing this?

Contents:

  • RPM for Valuing Website Traffic

  • “Project Cashflow” Update

  • Domain Appraisals - What’s it Worth?

  • The REAL Questions to Ask Before You Buy

  • Evaluate Your Website Returns

  • Can You Effectively Outsource Link Building?

  • Investing Snacks: Affiliate Disclosure Examples, Shop your Domain Offers, 81,000 .eu Domains Suspended, Podcast - Beyond Affiliate Marketing.


🏎️ RPM for Valuing Website Traffic

No, we are not referring to RPM as in the ‘frequency of rotation around a fixed axis.’

RPM (revenue per mille) is one of the metrics used to value your website traffic. In layman's terms this means how much you're getting paid by ad networks per 1000 impressions.

It's used industry-wide, but is only one of the steps required to properly value your site.

Our own Richard Patey features in this article because he set off a chain of events by posing this question in a Twitter poll:

What $RPM [are] people are achieving here before flipping [their website]?

(Image courtesy of Richard Patey)

This prompted a blog post from Richard after he manually scraped ~500 listings on the Empire Flippers’ website, and another post from Hekkup where Hektor calculated the RPM from his portfolio of over 30 websites.

To understand whether RPM should be used as an accurate benchmark of a website’s valuation, Benjamin Hoffman investigated several platforms and researched the opinions of industry experts.

The results were mixed.

Hoffman concluded that there are shortcomings with RPM as a metric, and suggests several alternative measurements.

He notes several additional factors he'd like to see including niche-specific RPM. 

He states:

It’s not good enough that we have “medium RPM.”  We need to know what RPM looks like across verticals and niches. The RPM for a news aggregator is going to be much different than for a fashion blog. Knowing the RPM per niche will help us learn which vertical provides greater value.

Hoffman's article for Flippa offers more interesting insights into RPM and alternative metrics.

Do you know the RPM for your website or portfolio?

Tell us about it in the comments section on the web version of this letter.


💰 “Project Cashflow” Update

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Matt Diggity is on track to grow his new website from $900 monthly revenue to $10k+ as fast as he can.

Back in our November 30th, 2020 issue we covered the first instalment of Matt's "Project Cashflow." 

The first few weeks after acquiring an affiliate website are packed with activity so we couldn't wait to see what had occurred.

Matt has recently released exactly what he's done with his new site and the results he's achieved so far.

He takes us through all the crucial first steps to optimize an affiliate website, including:

  • Site design and architecture

  • Technical SEO

  • Content optimization and creation

  • Monetization

  • Link building

In conclusion, he shows us his month one results and the impact of Google’s December 2020 core update.

Matt's walks us through the details of every step he took and why he chose to make certain changes.

He also mentions the necessary tools to use and gives you several 'before and after' examples.

The best part?

The major *&^% up he made with affiliate links.

It doesn't get better than this.


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💭 What’s it Worth?

When you're selling a domain name, the question of the appraised value of your domain will likely come up at some point.

There are several ways to handle this type of negotiation, but here are three ideas from Nat Cohen that you might find useful.

He shared the rebuttal style he uses in this Twitter thread.


❓ The REAL Questions to Ask Before You Buy

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Lately, we've covered several articles about selling a business, but not so many on how to buy an online business.

It's essential to complete due diligence on any purchase and you probably have a list of the basic questions to ask a seller.

The trick is to go a little deeper with your research and uncover the hidden details on the business you're looking to acquire.

How do you do that?

Ask the untypical questions.

Empire Flippers cover several of these in their article: The REAL Questions You Should Ask When Buying a Business.

Most of us will ask a seller why they want to exit their business, but have you thought about asking ‘What will you do if you can’t sell?’

This allows you to see if the seller has a backup plan. If they don’t feel confident that they can keep their business running and profitable, you might want to think about whether you’d be in the same position.

Another great question that is seldom posed is: Are there any pending lawsuits or issues?

As the writer says:

Profitability won’t matter if you have a lawsuit on your hands, so ensure that any legal matters are completely settled before buying the business.

The complete post gives you more useful tips to complete your due diligence and help you close the perfect deal.


♎ Evaluate Your Website Returns

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Calculating your website investing returns is a complex business, and the exact formula will differ according to what type of website you own.

This article from Kyle Kroeger of Financial Wolves dives into 5 main areas to consider when determining your site’s rate of return. These include your website's ability to convert and calculating your client value.

He also lists some of his favorite strategies for website investment, such as distressed investing.

You'll find plenty of helpful info on how to evaluate your site to determine the investing returns.


🔗 Can You Effectively Outsource Link Building?

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This is the question Dom Wells asks in his latest post.   

You could take care of On-page SEO and keyword research yourself, but link building requires a third party.

Link building is a major industry and within it there are many different types of services offered.

Wells takes an in-depth look at how to outsource your link building so you can make the right decision on a strategy for your business.

As he says (edited):

You need to go into the process with your eyes open; aware that as well as good links, you also need good on-page SEO, good speed, and first and foremost, quality content.

Without any of the above, you’ll have bad user metrics, and then all the links in the world might not make much of a difference.

Learn from Dom Wells’ experience and pick up a few tips on outsourcing your SEO.


🦄 SEOs with Skin in the Game

Smash Digital - a growth agency, filled to the brim with unicorn images and SEO memes. A team of SEOs with actual skin in the game, ranking their own portfolio of profitable businesses, and offering the exact same services to clients. An agency with so much link juice you’ll need a mop and bucket to clean it all up.

Check. Them. Out.


🍿 Investing Snacks 🍿

↣↣ Affiliate Disclosure Examples

If you earn affiliate commissions you must have an affiliate link disclosure on your website. The disclosure wording informs your visitors of the financial relationship between your website and a product or service you recommend.  

To better understand affiliate link disclosure, Niall Roche defines it as:

A snippet of text that informs your readers of an existing relationship, financial or otherwise, between your site and one or more of the companies you recommend.

If your affiliate disclosures are non-existent or need a tweak, then this article shares 5 tips with several great examples.

Your disclosure doesn't have to be boring. Try injecting a little personality, like Jonathan Fields does:

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↣↣ Shop the Offer Around

As a domain investor, when a reasonable offer is on the table it’s tempting to grab it and close the deal.

But, if you are not in a hurry, try these tactics for shopping the offer around to get the deal you really want.


↣↣ 81,000 .eu Domains Suspended

Surprise! 

Eurid, the registry manager of .eu domain names, has suspended thousands of .eu domain names owned by UK citizens. 

The UK lost its right to a .eu website when it left the European bloc and now owners have until the end of March 2021 to apply for reinstatement. This may be done by transferring the domain names to EU subsidiaries outside the UK or by declaring EU citizenship or residency.

Non-eligible domains will be made available for general registration starting January 2022.


↣↣ Beyond Affiliate Marketing - Getting a Percentage of All Sales

This podcast from Evergreen Profits discusses what’s working best with partnerships, building great relationships with product creators, and revenue share deals.

Their guest is James Schramko, the founder of SuperFastBusiness, who says:

I think that’s one of the secrets. The longer you can wait to monetize something, the more powerful it can be when you do.”

Have a listen to get useful strategies and tips for getting big results from a little effort.


That’s all for this Monday.

🙋How did we do this week?

With your feedback, we can improve the letter. Please click on a link to vote:

We look forward to seeing you here next week.

In the meantime, hit us up in the comments at the bottom of the web version.

Cheers!

Juliet