How Do Websites Make Money?

How Are Websites Making Money?A look at $30 Million in Website SalesFlippa.com User Meetup – Feb 2013Andrew 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

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

Average Site Profile in 2012

The 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

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

Tier 1 Niches – 70% of Sales Volume

Internet MarketingEntertainmentHealth & BeautyHomeInternet ServicesTechnologyHobbiesBusinessTravelGaming

• 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 – Call Outs

Tier 1 Niches – Capital/Revenue Yield

Internet Marketing

Entertainment

Health & Beauty

Home

Internet Services

Technology

Hobbies

Business

Travel

Gaming

$- $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600

$- $50 $100 $150 $200 $250 $300 $350 $400

Series4 Series1

Median Sales Price

Median Monthly Revenue

Tier 1 Niches – Traffic Yield

Internet Marketing

Entertainment

Health & Beauty

Home

Internet Services

Technology

Hobbies

Business

Travel

Gaming

- 1,000 2,000 3,000 4,000 5,000 6,000 7,000

$0.00 $0.02 $0.04 $0.06 $0.08 $0.10 $0.12 $0.14 $0.16

Series3 Series2

Median Monthly Uniques

Median Visitor Value

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 & EducationElectronicsFinanceSocial MediaFamilyNewsSportAutomotive

• 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 – Call Outs

Tier 2 Niches – Capital/Revenue Yield

Employment & Education

Electronics

Finance

Social Media

Family

News

Sport

Automotive

$- $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600

$- $50 $100 $150 $200 $250 $300 $350 $400 $450 $500

Series4 Series1

Median Sales Price

Median Monthly Revenue

Tier 2 Niches – Traffic Yield

Employment & Ed-ucation

Electronics

Finance

Social Media

Family

News

Sport

Automotive

- 2,000 4,000 6,000 8,000 10,000 12,000

$0.00 $0.05 $0.10 $0.15 $0.20 $0.25

Series3 Series2

Median Monthly Uniques

Median Visitor Value

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)

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

Site Type Performance

BlogEcommerceDirectoryServicesSocialForumMarketplaceReviews

• 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 Type – Call Outs

Site Types– Capital/Revenue Yield

Blog

Ecommerce

Directory

Services

Social

Forum

Marketplace

Reviews

$- $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000

$- $100 $200 $300 $400 $500 $600 $700 $800 $900

Series4 Series1

Median Sales Price

Median Monthly Revenue

Site Types – Traffic Yield

Blog

Ecommerce

Directory

Services

Social

Forum

Marketplace

Reviews

- 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

$0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80

Series3 Series2

Median Monthly Uniques

Median Visitor Value

Site Types – BestHydrationPacks.com

• Review Site

• Amazon Associates

• PageRank 1

• $24 Monthly Revenue

• 870 Month Uniques

• Sold for $210 (19 bids)

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

Advertising Performance

Google AdsenseBuySell AdsInfolinksChitikaDoubleClick.NetOpenads/OpenX

• 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 – Call Outs

Ad Performance – Capital/Revenue Yield

Google Adsense

BuySell Ads

Infolinks

Chitika

DoubleClick.Net

Openads/OpenX

$- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000

$- $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500

Series4 Series1

Median Sales Price

Median Monthly Revenue

Ad Performance – Traffic Yield

Google Adsense

BuySell Ads

Infolinks

Chitika

DoubleClick.Net

Openads/OpenX

- 20,000 40,000 60,000 80,000 100,000 120,000

$0.00 $0.01 $0.02 $0.03 $0.04 $0.05 $0.06 $0.07 $0.08 $0.09 $0.10

Series3 Series2

Median Monthly Uniques

Median Visitor Value

Ad Performance – CrispMe.com

• BuySell Ads

• PageRank 3

• $61 Monthly Revenue

• 110,000 Month Uniques

• Sold for $9,450 (55 bids)

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

Affiliate Performance

Commission JunctionAmazon AssociatesSkimLinksLink ShareCPAleadShareASaleClickBankAffiliate Buzz

• 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

Affiliate Performance – Call Outs

Aff. Performance – Capital/Revenue Yield

Commission Junction

Amazon Associates

SkimLinks

Link Share

CPAlead

ShareASale

ClickBank

Affiliate Buzz

$- $500 $1,000 $1,500 $2,000 $2,500 $3,000

$- $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000

Series4 Series1

Median Sales Price

Median Monthly Revenue

Affiliate Performance – Traffic Yield

Commission Junction

Amazon Associates

SkimLinks

Link Share

CPAlead

ShareASale

ClickBank

Affiliate Buzz

- 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000

$0.00 $0.02 $0.04 $0.06 $0.08 $0.10 $0.12 $0.14 $0.16 $0.18 $0.20

Series3 Series2

Median Monthly Uniques

Median Visitor Value

Affiliate Performance – LoveTheOutdoors.com

• Amazon Associates

• PageRank 3

• $1,200 Monthly Revenue

• 118,000 Month Uniques

• Sold for $37,100 (32 bids)

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

Platform Performance

WordPressJoomla!vBulletinDrupalBloggertumblrPligg

• 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

Platform Performance – Call Outs

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

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.com

Contact Andrew• andrew.knibbe@flippa.com• linkedin.com/in/andrewknibbe• @andrewknibbe