Project: “Throw Money At It” – Part 1
In this project, I will be documenting a simple experiment to answer one question: can I create a site and make it profitable, if my own involvement is basically limited to “throwing money at it”?
In other words, if I don’t create any content myself and don’t build any links myself and instead just purchase content and use some link-building services, can I make a profit or will I just be losing money?
Read on to see how I’ll kick this project off and why.
No Time for SEO
Building websites, creating content and building backlinks used to be my main occupation, back when I got started in this online marketing game. In fact, I used to be quite the obsessive link-builder, because that was the one thing I had picked out to specialize in.
Fast forward to the present and I can’t remember when I last built a backlink that wasn’t part of a review or test, but just a good old backlink made to increase the SERP of one of my pages. Why this change? As I got more deeply involved in projects like SECockpit (the awesomest SEO tool ever) and Backlink Battleplan (my own link-building course, that I’m currently updating for the seventh time since it’s inception), I’ve found less and less time to pursue niche-site building and SEO’ing myself.
It’s clear that I can’t do everything myself and that I need to look to outsourcing the bulk of the work involved with niche marketing. This has been clear for a while, but I’ve really struggled in making the transition from a one-man-operation to something more.
No More Excuses
Outsourcing makes a lot of sense. Once you get to a point where you have a profitable system set up and there’s more work than you can do yourself, hiring people to help you out is the logical next step.
Unfortunately, hiring people is a big project in and of itself. You need to find qualified candidates, come to some agreement concerning working hours, conditions and payment, make sure that you’re covered in terms of taxes and fees, train the employees and teach them exactly what you need them to do, create clear communication channels and keep track of everyone’s progress.
I have hired people for a few short-term projects, with mixed success. While I’d love to build up a little SEO team of my own, this is simply a project that I have not yet gotten around to. I have so much to do that I really need to hire some help, but I don’t have time to hire some help, because I have so much to do…
With the “Throw Money At It” project, I’m taking an easier way out by outsourcing the work without actually hiring anyone. Instead, I will just make use of existing, specialized services. I’ll purchase articles from SEOgenerals, Text Broker and the Content Authority, and I’ll scower some SEO forums and buy some link-building services offered there.
All I personally need to do is set up the website (takes less than 5 minutes) and copy-paste the articles I get, to populate the sites with content.
Let’s do Some Maths (yay!)
The goal with each of the sites built for this project is simple: fill them with relevant content, monetize them with affiliate offers or AdSense and get them ranked for a few targeted keywords, so that they get some nice Google traffic.
I’ve built dozens of sites along these lines, with varying success. Not every site becomes wildly profitable and not every site turns out to be worth investing more time and effort in. So, how can I know how much money to throw at a site, before dropping it and focusing on a new one? To help me estimate this, I’ll employ some (very) rudimentary maths.
There are two factors I need to estimate:
- How much traffic can I get?
- How much money can I make from this traffic?
To estimate traffic, I check the exact match search volume for each of the keywords I’m targeting and estimate that I can get between 40% and 60% of that traffic to my site, if I get a top spot. This is a very rough estimate because A) the search volume numbers in Google are not highly exact and B) the actual click-through rates for a number one spot can vary, depending on titles and descriptions used by yourself and the competing pages, the amount of sponsored ads in the results and the presence or absence of “special” listings like product listings or video-listings that are accompanied by thumbnails.
Still, it’s a better number to work with than any other estimate I know. You can get the exact search volume by using the Google Adwords Keyword Tool, or you can just use SECockpit, which automatically calculates the estimated traffic volume for you.
If I’m targeting five different keywords, I’m going to base my estimate on the assumption that I get top rankings for all of those keywords. However, when I do keyword research, I usually also pick out some keywords to create articles about, without the intention of actaully getting the articles ranked for those keywords. It’s good to have some extra content on your site and keyword data can help you find out what kind of questions people in a niche have and what kind of content they might appreciate on your site.
Next, I need to figure out how much money I can potentially make with a site. There are two scenarios I’m working with, for this project. The first is for a site monetized with AdSense and the second is for a site monetized with affiliate products.
For the AdSense example, I have limited data to work with, from the two measly little AdSense sites I currently own. For those sites, I’m getting an average CTR of 4.55% (based on Google Analytics pageviews, not AdSense pageviews, which are always a lot higher, for some reason) and I’m getting an average EPC of $1.46. According to Google, the average CPC of the keywords I’m targeting is $3.82.
I could now calculate exact percentages, but in my experience, CPC data is so erratic that it’s really only useful for very rough estimates. So, as a low-ball figure, I’m going to assume that I’ll get about one third of the CPC, per click on an AdSense ad on my site.
So, the calculation goes like this:
Combined exact-match search traffic for my targeted keywords: 12,040 searches per month.
40% of which is: 4816 visitors per month.
A 4% CTR results in roughly 200 clicks per month and one third of the average CPC for the keywords is $2.95 (= my very rough EPC estimate). This would result in the website earning about $590/month, once I get top rankings for all of the target keywords. That’s not super-spectacular, but it’s a good enough earnings potential for me to pursue the project, especially since most of the keywords I picked have low competition.
Affiliate Site Example
For this second part of the project, I’m going to add a few more product reviews to an existing, but badly neglected site of mine. In the past four months, I’ve gotten about 6,000 visitors to the site and made just shy of $1,500 in commissions (after refunds and fees), from a total of 552 clicks (~9% click rate). As you can see, that’s quite a nice per-visitor value I’m getting from the site, so it’s high time I expanded it and optimized it a bit.
Following a similar method as above, I can estimate that the additional keywords I will target, can lead to a boost in traffic in the range of 6,000 new visitors a month. Admittedly, there are some pretty ambitious keywords in there. Still, assuming I can get 6,000 extra visitors each month and I retain a value of about $0.25 per visitor to my site, that would result in the site earning $1,500 per month.
Here’s a quick summary of the main estimation methods I’m using:
It’s important to note that these estimates could all, potentially, be way off target. For example, the visitor-value is only going to be correct as long as additional traffic is coming from the same source and going to the same page. As soon as different keywords and different pages are involved, conversion rates can be very different. Still, I figure it’s better to have some sort of estimate than to have none at all.
Setting a Budget
When setting a budget for a project like this, there are always two factors to consider:
- The recurring income the site can generate.
- The value of the site, if you were to sell it.
In general, sites sell for around 10 times their monthly income. However, even a site without any income has value. A site with good content, a bit of traffic and some decent backlinks can fetch your a couple hundred dollars, when you sell it. In a sense, you are not risking 100% of the money you spend on content and SEO, because you can always sell the site and recoup part of your investment.
Since my affiliate site is already earning more than $400/month, I can assume that I could sell it for at least $4,000, if I wanted to. Therefore, I can go ahead and invest $4,000 in developing this site and even if that doesn’t increase the revenue by a single cent, I can still get all my money back.
For the AdSense site, which I’ll be building from scratch, I’ve come to the conclusion that it can be turned into a fairly profitable site, but I won’t base any further projections on my estimates. Instead, I will start by investing a maximum of $500 and then wait. I hope that I’ll get some initial traffic and clicks from this first investment, so that I can then base my ongoing budget on the actual, measurable numbers.
I’ll be posting an update on how much I spent and what I spent it on, a few days from now.
Let me know what you think of all this, by leaving a comment below! I’d love to hear your thoughts.