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ProBlogger Challenge: Put a Value on Your Blog

Posted By Darren Rowse 22nd of February 2013 Featured Posts, Other Income Streams 48

This week we’ve heard from blog sellers, and blog buyers. Whether or not you’ve been inspired by what they’ve had to say, I’ll bet that the conversation has raised one key question in your mind:

What is my blog worth?

Price tag

Image courtesy stock.xchng user ba1969

These days, we’re seeing blogs being recognised as valuable business tools, both for business-to-business as well as business-to-consumer connections. So if you own and run a blog, it makes sense to understand its value.

Today’s challenge is to do just that.

The basics

If you’ve been following along this week, you’ll already have a few of the key metrics for a blog valuation in mind:

  • the age of your blog
  • uniqueness and quality of blog design
  • traffic levels, sources, and quality
  • visitor stats: bounce rates, time on site, conversions, and so on
  • current monetization approaches and levels
  • associated social media footprint.

Andrew Knibbe of Flippa recommended that we use the marketplace as a yardstick by which to value a blog, but what other factors should we take into account before we start doing research there? Let’s step through the process of getting a rough idea of your blog’s value.

Vital stats

First, make note of these vital stats for your blog. You could do this on paper, but I recommend a spreadsheet, because that’ll make it a bit easier when it comes to comparing your site to others down the track.

  • Blog age: Andrew from Flippa mentioned earlier in the week that older blogs tend to be given higher valuations.
  • Domain: If you’re selling the domain with your blog, a shorter or more memorable domain is probably likely to be looked on more favourably than a longer domain, or one that contains hyphens, for example.
  • Platform: The platform on which your blog is hosted might not in itself raise or lower your blog’s value, but it might impact the types of buyers who’d be interested in it.
  • Theme: If you’re on a WordPress blog, paid or unique themes are more likely to attract more serious buyers.
  • Alexa rank: We saw earlier in the week that Alexa rank also contributes to a blog’s value, so if you don’t know where yours sits at the moment, find out.

By this point, you should be off to a good start.

Traffic stats

Next, it’s time to open up your Analytics tool and take a critical look at your blog stats not just for the last month, but over the last few months.

  • Monthly traffic: Note down the total traffic levels first.
  • Traffic sources: Next, allocate portions of traffic to the relevant sources of those visits.
  • Landing pages: Look at your key landing pages. Shahzad mentioned yesterday that some of the most popular landing pages on the blog he was buying were off-topic posts. How relevant are your main landing pages to your blog’s brand and niche?
  • Bounce rates: It’s important to look at this data over time, and to work out which traffic sources have lower or higher bounce rates. This can help you get an idea of the overall value of your blog’s traffic.
  • Time on site: This is a good measure of engagement and, again, it’s worth looking at the average time on site for each different traffic source, to see which visitors are more engaged.

This information should help you get a feel for the value of the traffic your blog attracts, and the content you’ve developed. It might also help you identify places where there’s room for improvement, but for now, let’s keep going with our valuation.

Monetization

If you’ve monetized your blog somehow, you can be sure that potential buyers will be interested to know how you’ve done it, and how successful you’ve been. Let’s pull together the data—if you don’t already have it at your fingertips.

  • Monthly revenue: Add up your revenues for the last three months and divide by three to get a monthly average.
  • Monetization sources: Make a note of the ways you monetize your blog. Have you created unique products from scratch? Do you use certain advertising or affiliate networks?
  • Conversion rates: Look at your conversion figures for the last three months, and compare them with your last three months’ traffic to calculate your average conversion rate.
  • Value per visitor: Take your average revenue figure for the last three months and divide it by your average traffic figure for that time period. This will give you an average visitor value, which will be really helpful in assessing your site against others for sale in your niche.
  • Profit: You might not be able to calculate this figure until you complete the next section, but do be sure to subtract your costs from your revenue figure to get a profit figure. Again, this will make for easy comparison between your blog and others. If it’s good, it could also go a long way to tempt potential buyers.

Note that at this point, you can calculate a valuation based on a multiple of your revenue—either 12 or 24 months, say. This will give you a good reference point for the research we’ll do on Flippa in a moment.

Costs

Whether or not you’ve monetized your blog, potential buyers will want to know how much it costs to run, so they can compare it with other blogs they might be considering buying. Make note of the costs you pay for:

  • Hosting: Note monthly or annual figures.
  • Design and development: Unless you have regular maintenance charges, you might want to add up what you spent on your blog’s design and development in the last year as a more objective figure than your expenditure for the last three months.
  • Content: Do you pay writers? Buy content? Add up those costs—along with your own time cost for writing and editing your blog’s content.
  • Marketing and customer acquisition: If you spend money on advertising—or time on guest-posting and content marketing—again, add up those costs for the last three months.
  • Time: Don’t forget to tally your time for other blogging tasks, like social media, affiliate and ad management, and so on. Try to get a clear and honest picture of how much time it takes you to run your blog on a monthly basis.

Comparing blogs in your niche

This basic information shouldn’t take you too long to collate. And once you have, the real challenge begins! Try to find at least two other blogs for sale in your niche to compare yours with.

  1. Go to Flippa.com. You can, of course, search for sites for sale in your niche on Google too. That can be a good way to find out what’s for sale, but as those sites may not give you an indication of how much they’re hoping to sell for, a visit to Flippa for research is a good idea.
  2. Find sites for sale and auction in your niche or a similar niche. I’d recommend you look at finished sales, since that’ll give you the figure the sites sold for, rather than just their current bid price, or Buy It Now price. Recent sales will give you the best indication of what the market is actually willing to pay for a blog like yours.
  3. Assess the sites. Go through the checklist above again for each of the sites you’re looking at. Make a note of the prices they sold for. See if you can spot any trends that can indicate what the market values in blogs within your niche, and think about how your blog stacks up on these points.
  4. Settle on a price range in which you think your blog might sit. Rather than picking a single figure that you think you’d accept for your blog, I think it’s probably a better idea to use your research to work out a range in which that price might reasonably fall. You’ll have a figure you wouldn’t sell below, and a range in which you can set your expectations.
  5. Compare the range with your multiple-of-revenue price. If you calculated a multiple-of-revenue price above, compare it with the price range you’ve arrived at to see if the figures are in the same ball park.

By the end of this challenge, you should have a rough valuation on your blog. If you’re game, share it with us in the comments below. Or, if you’d rather, you can just let me know if you were surprised—or disappointed, or inspired!—by the price range you arrived at.

About Darren Rowse
Darren Rowse is the founder and editor of ProBlogger Blog Tips and Digital Photography School. Learn more about him here and connect with him on Twitter, Facebook, Google+ and LinkedIn.
Comments
  1. Thanks so much Darren for putting this together. It’s such a big topic and definitely not easy to put a value on a blog and even if you have the value in money the owner might feel much different about it. We all know how much time and sweat goes into creating a blog and when you sell it, it feels as if you sell your “baby” (speaking metaphorical of course).
    For example: My new site cost me 6 months to finally get online with a product and enough content. The problem is now the marketing part. I know it will cost me another 6 months to drive enough traffic to the site to make a decent income. So speaking about the numbers so far the site wouldn’t be worth much but speaking of the development time I put in – it is valuable to me at least ;-)

    • Keep at it Monja,

      Those 6 months already invested and another 6 months for marketing will pay off massively if you ever wanted to sell!

      I bought a well established documentary based website from flipper last year and gave it a re-design, including some social marketing scipts and left it for a year. I returned back to it and sold it for twice what I paid for it which was pretty good. Also what a lot of people don’t recognise is that you earn every month from having a website so which I always look at as payment for my development costs…

      Good luck and take care,

      Paul :-)

    • Very well said and all the hard work will be worth it. It may seem overwhelming especially if you are doing all the work yourself…but all the more rewarding :) Good luck!

  2. Darren,

    This is a great unique post. I love how you continue to expand the breadth of topics on your site. Besides the traditional method of valuing a business based on its financial statement, I’ve often wondered what other variables are considered when valuing a blog or news site. There are so many random sites out there that attempt to place a value on a site, but the valuation can range wildly.

    We don’t have any intention of selling our site, but understanding the value of our site as time goes on helps us set goals and performance benchmarks.

    Philip

  3. Blog valuations depend a lot on the blogger it self. What kind of relationships he or she has built. What happens to the site after the blogger parts away. Is there a deal to keep the original blogger on?

    • Hi Rohit,
      Ophelie from Flippa here. Blogs that have a strong link to the original owner sometimes go through a transitional re-branding period where new writers are brought on. Sometimes the original writer continues writing for the blog as a contractor. Other times, the site goes down for a few days and comes back up entirely re-branded, with no transition. It’s up to the buyer and seller which one of these options is a better fit for them.

  4. very nice post its help to optimize the cost of blog and earn money by blog selling thanks for sharing..

  5. I use Google Page Rank and authority trust rank to evaluate the value of the blog.

    • It’s not good to only use these values as PageRank is exponentially rated so if your site is relatively new and on a PR 3 then it could be worth pennies or thousands. Authority trust rank is ok to use but again not as a sole expression for site worth.

      Paul :-)

  6. i am new blogger but i will try hard

  7. Hi Darren,

    Regarding this:
    “Domain: If you’re selling the domain with your blog, a shorter or more memorable domain is probably likely to be looked on more favourably than a longer domain, or one that contains hyphens, for example.”

    I just have a question:

    What can you suggest to a blogger who’s interested in selling his blog, but he happened to have already registered his personal name as the domain name (ex: Carl Ocab, John Chow, ZacJohnson, etc.)?

    Thanks,
    – Terry T.

    • I’m not sure if Darren will have time to answer this but I’ll try and pitch in with what I know…

      In answer to your question, I would say it doesn’t matter too much. The new website owner can always set up 301 redirects to his new domain and re-brand the site should he wish. Alternatively you could do this yourself prior to the sale, but you’d probably be best to leave it a month or two (dependant on the size of your blog) to allow google to properly index the new domain.

      There is no penalties for 301 redirects and is common amongst website owners to do this if changing domain.

      I hope this is of some help.

      Paul :-)

  8. Before I take any further step in selling my blog, I always stalk the sites that has been successfully sold before. It helps me to get extra ideas about price, description and more.

    Thanks for the awesome tips as always, Darren!

    • Hi Anup! You might want to have a look at Flippa’s just sold page (flippa.com/just-sold) for a look at what other website sellers did well before listing your own.

  9. Nice tips to avaulate the value of any blog, but isn’t it too long? I usually count the value of blog in the following method
    Earnings (monthly) X Site age + theme, hosting and domain costs. Hope you will like it.

    • Hamayon….I like your evaluation method. Quick question, how do you find the “Earnings” for any blog?

  10. Hi Darren,
    I went to Flippa a few weeks ago to get an evaluation from them. I put in the stats they asked for and they emailed me back the value evaluation. I was fine with the value they placed on my blog.

    I always looked at my blog as a piece of real estate that I must upkeep in order to sell someday.

  11. Hi there,

    Very interesting blog post! I have always wondered what defined the real value of a blog, especially the “age” thing. A few years back, I was going through Flippa and noticed that blogs and domain names of a certain age–let’s say 5– sold for more than very young ones, even though they had little or no content, traffic etc!

    Stats is something I need to get better at! I currently use Google Analytics like most people I suppose but I haven’t looked at all the features offered! I definitely should.

    I currently have a blog that’s got some traffic and has been registered for 4 years (maybe more), so I’ll definitely do my homework with the great tips you gave here!

    Thanks for the contribution.

    Yoan

  12. Excellent post. you have summed up a great post about making value on blog but can i know that why are you writing too many posts on selling blog and buying the right blog these days ? ;)

    Thank you

  13. I enjoyed the series Darren,

    I think the best way to evaluate blog value is to look at the domain like a piece of property.

    Calculate the value based on income.

    Just think, in real estate a property that consistently rents for $1000 per month is considered to be worth $100k.

    • Many website buyers use a similar calculation in their own valuation: they’ll typically pay between 10 and 15 months of profit for a site.

      Why the (relatively) low multiple? Things change much faster online than they do in, say, real estate, so sites that are at the mercy of a Google algorithm update, or depend on one advertiser, are considered riskier. That, in turn, brings in lower multiples.

  14. Now I know, adding value to a content is a big help. At first I thought it doesn’t matter as long as you have content on your site but now, you have to have a very good content to give wonders on your site. Thanks for the ideas Darren

  15. A long and informative post. I always calculate the value of a blog, based on its income. Thanks for awesome tips, Darren.

    • and Do you think it is the only metrics for a successful blog? A lots of other constraints are eqaually responsible for the value of a blog as told in this blog post.

  16. I don’t think my blog http://www.danerickson.net is very valuable right now. I’m a new self-published author, musician, and blogger (less than two years) and I’m just trying to build a platform. My rank and traffic have increased, but they are still low. However, as I expect my books and music to become more known in time, and I believe my writing and poetry is timeless, I also believe that my blog is beyond measurement in value.

  17. Thanks Darren… just like business an off net business – very informative.

  18. Really interesting article. I just started blogging some 6 months ago, and was looking at Flippa a few times during the last two months.
    According to a multiple analysis my key blog could be worth some 5000-6000$ – not bad

  19. Really great and easy to follow tips, Thanks for providing these tips.

  20. nooo, I am not gonna share it! :)

  21. I started a year now a real Estate blog / Directory:http://laguiainmobiliaria.com.mx

    We really concentrate in the design, usability and of course content but we are having a really bad time with Alexa. Can´t get below 400,000.

  22. I’m just starting my niche blog and I know its a long road ahead. But if I ever need to sell my blog, now I know where to sell it and what factors i should look into. Thanks for keeping it plain and simple!

  23. Absolutely amazing post. Thanks for putting these points into one blog. Putting value on a blog means a lot for every blogger and this should be a habit of each one.

  24. Really amazing article. Thanks for placing the most important points into one single blog post. I absolutely agree with you.

    When selling a blog, I consider these points when deciding either is good/bad value: 1.) Traffic quality and level; 2.) Visitor stats, conversions, referrs and 3.) Monetization type and level.

  25. Hi Darren!
    This article is a complete package to increase the value of a Blog.Mostly i love this for you have categorized the points,then described. In this article you put some little but important points that we are usually miss.In this time cent percent people are using their PC & Laptops for earning.So this article will help them to start a new way of earning.

  26. This post was truly insightful, I never realized exactly what went into actually placing a value on a blog. I like browsing through Flippa from time to time to see what people are selling and this will definitely make me look at those sites a little differently.

  27. I noticed that some of the sites being sold in Flippa were barely a year old and has page rank of 0!. It is interesting that not all the metric described in the post carry equal weight. There are some buyers who are willing to invest in new blogs, even those with little targeted traffic.

  28. Thank you for all the tips, Darren. This is really useful for bloggers who are still novices, like me.

  29. Excellent overview of blog valuation. Based on my limited research and market exploration, it seems most blogs actively for sale use monetization (profit per month) as the key component for determining value. Not sure I totally agree with this approach, but it does seem the norm on Flippa.

  30. Hi Darren,

    A very useful insight especially when it comes to monetizing and stats.

  31. Hi Darren, you really help me in choosing a perfect domain. After all, if our domain is memorable. It’ll not create any confusion in the mind of people and will clear our site image also….

  32. Thank you Darren. You’ve done a thorough job here. I don’t think there is any better way to establish the worth of your blog than what you have just talked about. Sometimes a lot of blog owners don’t have a way of knowing what price tag to place on their blogs; they either under-estimate or over-estimate the value of their sites. But with the keys you have listed here and the resources to check, it would be easier for one to boldly say ‘This is what I think my site is worth’.

  33. I’m a new blogger and trying to get better. Love your site, really inspiring!

  34. Thank you Darren for all these insights. I have learnt so much from it and I am sure I will benefit from all these wonderful tips that you are sharing in such a detail manner with us. Thank you once again.

    Bill

  35. Hello Darren…
    A blog require a lots of hard work before be ready it for selling.I just started blogging so I have to do a lot of work on my blog.You share really awesome tips for making once blog worth selling. Thanks for it.

  36. Really amazing article. Thanks for placing the most important points into one single blog post. I absolutely agree with you.

  37. master.blogging.great.tips

  38. I love the way the content is presented. It is always important to create brand value for a blog and not to get afraid of the latest Google alogrithms.

  39. Wow, I really don’t think I have a blog that’s worth anything. I should start working on that.

    Not because I really want to sell my blog, but this seems like an excellent way to tell how successful you’re being at blogging.

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