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Is Making Money from Blogging Passive Income?

Recently, I attended an event and heard a speaker talk about how they’d build a passive income from blogging. The person sitting next to me leant over toward me and at whispered:

“Based on your Twitter Stream, I’m not so sure that blogging is ‘passive’ – is it?”

I thought it might be an interesting discussion to re-open here on ProBlogger – do you think that income earned from blogging could be classified as ‘passive income’?

Wikipedia defines ‘passive income’ as:

Passive income is an income received on a regular basis, with little effort required to maintain it.

Wikipedia also goes on to define it from a tax perspective, which I’m won’t get into here. I’m more interested talking about the ‘with little effort required to maintain it’ aspect of the definition, which I think is what many people are attracted to when they hear anyone talk about ‘passive income’.

Relaxed Person Hangs Flip Flops Out The Car Window

Let me kick off the discussion by making a few comments:

Most Bloggers Making a Living from Blogging, Work Hard

This has been a recurring theme here on ProBlogger, since I started the blog in 2004. While there’s no single way to make a living from blogging, most full time bloggers I know – who blog as their primary income stream - work pretty hard on their blogs.

They:

  • Post content on a daily basis
  • Spend a significant amount of effort to maintain the community around their blogs
  • Work hard on promoting their blogs and finding new readers
  • Build relationships with other bloggers
  • Work hard to maintain their income streams (whether that be by liaising and working with advertisers or developing and launching products)
  • Also work on any number of other tasks including SEO, maintaining social media accounts, answering emails, moderating comments, blog design, racing other blogs, managing hosting etc

Some full time bloggers have grown to the point where they are able to outsource some of the above – but then there’s the task of managing a team!

Income from blogging is neither quick or easy. In short, if you expect to earn an income from your blog, you need to consistently put time and effort into it.

Some Aspects of Blogging Will Generate Passive Income

Having just said that blogging for income takes a significant amount of work, there are some elements of blogging that could be said to generate ‘passive income’. Let’s look at a few examples:

There’s Gold in Those Archives

Each post I publish could potentially generate an income for me, on the day it’s published but also tomorrow, next week, and next month. Even years into the future.

Example 1 – when I dig into my Google Analytics account and drill down into the AdSense stats there, I see that last month my post ‘Aperture‘ on dPS earned me $233.23 and this Wedding Photography Tips post earned $222.61.

Those posts were published in 2007, five and a half years ago!

Example 2 – when I look at my Amazon Affiliate earnings, I can see that my Popular Digital Camera and Gear post generated $60 yesterday for me. That post has been up since 2009 and while I do update it from time to time, it has been over 2 months since I reviewed it.

Of course, part of the reason those old posts continue to generate income for me is because I continue to publish new content on the site. Alongside the new content, the posts in my archives have the potential to earn income for years to come (if all goes well).

You could argue that a blogger who spends years doing all of the above could then completely stop doing any work and still make some income based upon continued traffic from search engines. However, that traffic (and the income from it) would decrease in time without you maintaining your blog (depending a little on how evergreen the content of your blog might be).

The Long Tail of Products

In a similar manner, when you develop a product to sell to your readers that product can continue to generate an income for you into the future, without needing continual development.

Example – when I first wrote and released 31 Days to Build a Better Blog, it took significant work to get ready to be published. There was the time I put into creating the content, the editing, the design, the setting up of shopping carts, the marketing etc.

In return for that effort the eBook produced a good income when it launch during the launch period.

However, it has continued to sell almost every day since then. I did a full update of the eBook and added new content in 2012 but other than that, the 31DBBB continues to sell (as do our other eBooks) thanks to it being promoted in our sidebar/navigation areas and through annual discount promotions we’ve run.

This is the beauty of creating something to sell for your readership, particularly if it’s evergreen and doesn’t date.

Is Making Money from Blogging Passive Income?

I’d love to hear your thoughts on the topic – do you see the income you earn from blogging as ‘passive income’?

My April Blogging Income Breakdown

Yesterday I published a post telling my story of adding 12 income streams to my blogs over the last 10 years.

Screen Shot 2013 05 08 at 12 24 58 PM

One of the comments and tweets I had a number of times was a request to make the diagram I used shows how the 12 different streams of income go towards making the overall revenue on my blogs today.

It has been a over a couple of years since I did an income breakdown so I decided to put together the numbers today. The categories don’t completely coincide with the 12 income streams mentioned in yesterdays post (for example I no longer do consulting and I’ve combined all the affiliate income and all the ad network income – however you’ll get the picture.

Income streams breakdown

The above breakdown is for last month’s income (April 2013). It is worth noting that while I chose April as it was a pretty typical month for me that things can vary quite a bit from month to month depending what the monetization focus of my blogs is.

For example if I were to show you December last year you’d see Affiliate earnings and eBooks dominating the chart more as we do a 12 days of Christmas promotion on Digital Photography School that promotes a series of affiliate products and our own eBooks over a two week period.

Or if I created a chart for March this year you’d have seen ‘Events’ as a bit bigger as we launched our ProBlogger Event Early Bird Tickets that month.

I hope it helps to see a visual of the breakdown of what I was talking about yesterday.

What was your #1, #2 and #3 income stream last month?

12 Blogging Income Streams [And the Story of My 10 Year 'Overnight' Success]

Today I was speaking with a blogger (I’ll call her Alice for the sake of this post) who was feeling a little overwhelmed with the idea of monetizing her blog. She expressed that as she looked at other blogs in her niche, everyone seemed to be doing such amazing things. She said she felt she’d never be able to compete.

Other blogs in Alice’s niche were running online courses, selling out hundred people live events around the country, selling ads to fortune 500 companies, authoring best selling eBook and more. The thought of even beginning to monetize her blog in these ways was completely paralysing Alice!

It is so easy to be overwhelmed to the point of paralysis when you look at what other bloggers are doing. I know this from personal experience!

My advice to Alice was to keep in mind that all those other amazing blogs started in the same place that she was – without any income streams at all.

Often it is easy to forget this and see a successful blog as always being what it is today.

By way of illustration, I shared my own story

When I started blogging, I did it as a hobby. I had no intention of it ever being more than that and there were no examples of people directly monetizing blogs.

Over the coming year and a half, my blog grew in popularity and the hobby became something of a passion and obsession. It also began to cost me money to run for hosting, domain, design etc.

Phase 1

Blogging Income 6

I began to dabble in monetizing with the hope of simply covering my costs. My first experiments were with Google AdSense and the Amazon Affiliate Program. The results weren’t spectacular but they were encouraging enough for me to keep trying. A few dollars began to trickily in but more importantly – I was learning a lot!

Phase 2

Over the coming months I continued to experiment with AdSense and Amazon. I vastly improved how I was implementing the programs (better ad positioning, writing reviews for affiliate products). I also began to think about how to drive more traffic to my blog. I even started a second blog (and then more followed)!

The results were that my income began to grow. I began to see my blogging as a part-time job and even began to wonder if it could one day be full-time.

Over the coming year I also began to also look at other forms of monetization.

Blogging Income 6

During this time I started promoting affiliate programs with other online stores. I also did something that terrified me but which became a great income stream, I picked up the phone and began to sign up advertisers directly. This was a period where I had to bite the bullet and start to treat blogging not just as a hobby – but as a business.

Again – these new income streams started small and were experiments. My first ad sale was for $20 for a month long ad. It didn’t bring me overnight riches but securing the ad taught me a lot and contributed to my overall income.

It was around this time I realised that while none of my income streams were enough to sustain me alone, a blog could actually sustain multiple sources of small income that could add up to something significant.

My goal was to go full time as a blogger. To do that I knew I needed to grow multiple streams of income and my blog’s traffic.

Phase 3

It was around this time that other Advertising Networks began to appear. I experimented with quite a few but the one I had most success with was Chitika. At the time, AdSense was my #1 source of income but putting Chitika on my site almost doubled that income overnight and allowed me to go full time as a blogger!

Blogging Income 6

Of course it wasn’t just that Chitika worked well. I’d also been growing my traffic, building reader engagement/community etc – but the extra income stream helped a lot.

Phase 4

It was around this time that I’d started ProBlogger as a blog along with a whole new range of income streams. I did monetize ProBlogger in the early days, using all of the above income streams but I found that ProBlogger was actually better to monetize indirectly.

By ‘indirect monetization’ I mean that ProBlogger began to grow my own personal profile and authority on the topic of blogging and I began to be approached to provide products and services that I could sell. The blog itself didn’t necessarily make money – but it enabled ME to make money as a result of the blog.

Blogging Income 6

For example, it was through ProBlogger that I landed my first paid speaking opportunity. I was asked to fly to Washington DC to speak at a conference – (all expenses covered plus a small fee paid).

Around the same time, I was approached to write the ProBlogger Book (the hard cover one that is now in it’s 3rd edition). This only came off the back of the ProBlogger blog.

Similarly, around this time I began to offer my services as a consultant to help people with their blogging strategy (a service I don’t offer any more).

Once again, these income streams started small (in fact writing a Book isn’t generally a big income stream for most authors) but they each contributed to the overall revenue from my blogging, which was now adding up to be a lot more than I’d ever earned from any other job (keeping in mind that I’d been blogging now for 4-5 years).

Phase 5

Most of the above income streams have continued to grow but other opportunities have presented themselves as new technologies emerge. While I’d previously been approached to create a hard copy book, we began to see the emergence of eBooks. While people previously had asked me to speak at their live events we began to see people delivering content via virtual/online courses and conferences.

Blogging Income 6

I began to experiment with creating eBooks and membership areas to my sites. eBooks have gone on to become my main income stream (both with ProBlogger eBooks and Photography eBooks). The main income from eBooks tends to come in fits and starts, when we either launch a new eBook or run a sale/promotion on one but even when we don’t have these events happening they still steadily sell each day in small numbers. Again, contributing to the overall revenue.

I also added the Job board here at ProBlogger.

The job board is an interesting example of what I’m talking about today. It has never been a spectacularly huge income stream but it has actually been a pretty steady source of income over the years. We generally see 1-2 new blogger jobs advertised every day and that $50-$100 per day in income adds up over time. I’ve not got the exact figures but I’d estimate that over the last 5 years it has brought in over $100,000! I’m glad I started it!

By this stage my income was growing to the point where I was able to bring on others into my team. This started with some very part time outsourcing of small jobs but in more recent times has enabled me to hire a number of team members to help run different components of my business.

Phase 6

The final income stream has become a growing focus of my team and I (although I have to say it’s not a massive income stream at this point) has been running events and conferences.

Our annual ProBlogger Training Event here in Australia has grown in number each year and this year we think it’ll probably turn a small profit. Having said that, my intent with these events is not to make a lot of money. Rather, it is about giving something back to the Aussie Blogosphere (it is also great for branding and gives me a lot of personal satisfaction and fun).

We’ve also started to run some smaller more focused workshops (our Email Marketing workshop in Melbourne still has a handful of spots left).

Blogging Income 6

My suspicion is that events will be something we’ll see expand a little in the coming years.

Final Thoughts

Let me sum up with a few thoughts, disclaimers and words of encouragement:

Keep in mind that all of the above has happened over 10 years. While today there are obviously 12 or so income streams (although I’m sure I’m forgetting something) they all started quite small and as experiments.

There have been moments where it did seem like I had rushes of income, those rushes were usually the result of several years work and investment of time and money.

I also would say that in each case, I started each experiment not really knowing what I was doing (on at least some level) but really seeing the experiments as a chance to learn. For example, my first eBooks were taking previously published blog posts and updating, completing and adding to them to offer readers a more convenient way to access my content.

At the time I had no idea if that would work and the design and delivery of the eBooks was fairly basic. In time I learned what did and didn’t work and was able to grow the sophistication of my delivery systems, design, authoring and marketing to the point that it’s become a fairly well-oiled machine.

The key is to pick something to try and to see whether it connects with your readership and to learn as much as you can while you’re doing it. Often you end up evolving what you do to the point that it is a better fit for you and your blog – but you’ll never get to that point without starting.

Update: I’ve since published a followup to this post that gives a split of the different income streams.

How Early Should You Monetize Your New Blog?

A common question that I get is ‘how early should I begin to monetize my blog‘.

I understand the concern behind the question – some bloggers certainly like to build their audience before they introduce monetization and you do need readers before whatever monetization model you choose will work – but have always believed that if you intend to monetize your blog one day you should probably do it in some way from early on.

I’ve never heard a shop owner ask – ‘how early should I monetize? – shops open from day #1 with products to sell.

Likewise – Newspapers generally run ads from Day #1, Businesses open with sales staff from Day #1, Gyms generally offer membership packages from Day #1… why shouldn’t a blog that intends to monetize start with that in mind.

It’s never too early in my opinion.

Monetizing from the start has a few benefits:

  • Firstly it’ll generate a little income – it won’t be much early on but a little is better than nothing and you’ll be surprised how even just earning a little can motivate and energise you!
  • Secondly – you’ll learn a lot by just trying. The first time I tried to monetize I used AdSense and Amazon’s affiliate program. In the first week of doing so I learned a lot – knowledge that I’ve utilised ever since.
  • lastly, and perhaps most importantly – monetizing from the start means your readers expectations are that your blog is one that will be monetized and you don’t have to break it to an established community that you’re suddenly going to start monetizing in some way.

A better question might be ‘HOW should I monetize early on?’

Some blogging monetization techniques will work better from Day #1 than others.

For Example

If your goal is to sell advertising directly to advertisers/sponsors – you’ll need to build your traffic before an advertiser is likely to want to advertise with you. In that case you might want to consider running ads from an Advertising Network like AdSense or Chitika (aff).

Or if your eventual goal is to sell your own products (an eBook or course perhaps) it may not be feasible for you to have a product developed from Day #1. In that case it might be worth promoting someone else’s eBook or course as an affiliate while you develop yours.

When Did You Start to Monetize?

I’d love to hear your experience – did you monetize from the start or introduce it later? Or are you still waiting for something to happen before you do it?

Mastering the Upsell

Everyone’s heard of the term ‘would you like fries with that‘ – it’s probably the most famous upsell of all time. The fast food industry are not the only ones working the upsell magic. Retail, supermarkets and yes online are all over it.

There’s two common terms used in the corporate world that are measured and heavily invested in — and it’s all related to upsells. The first is average transaction value. It’s essentially the average amount each customer is spending on each transaction. The second is the average number of units per transaction, so how many ‘things’ people buy each time they transact. To a business even a small lift in each of those measures can result in significant increases in revenue and profit. The same goes for bloggers who are selling products.

If you’re a ruthless businessman you’ll stop at nothing to get those upsells happening, regardless of if the customer likes it or not! But I know all of you don’t think that way and you certainly don’t take for granted that behind these measures are people and whilst you would like to have them spend more money with you, you don’t want to resort to trickery to make it happen.

… and that’s why I’m happy to share all my experience with upsells online.

When I’m looking at upsell opportunities, I first break them into three groups; The pre-sale upsell, the checkout upsell and the post sale upsell. Each of these areas require a different approach that I’ll try to explain.

Pre-sale upsell

These upsells typically happen on the sales page. They form part of the overall sales pitch of the product. You might have something that costs $19 on your sales page, but you also offer it as a bundle with another product for just $9 extra. You present both of these options to the customer before they check out.

We use this exact technique right here on problogger. If you look at the workbooks tab you’ll notice that each workbook is laid out for you to explore, but at the top and bottom, are details of a special offer to buy the entire library and save 40%. It’s not a hard sell, but something I want potential customers to have in the back of their mind as they are shopping around.

Checkout upsell

This is when a customer has indicated through some sort of action (clicking an add to cart or buy now button) that they wish to buy a particular product. On your way to the checkout you’ve got a couple of opportunities to, in your own way, ask if they’d like fries with that.

We use a specific technique on Problogger. If you head to the Blog Wise sales page  for example and click the download it now button, you’ll be presented with an upsell that looks like the below.

With this type of upsell, I only ever offer 1 product. I’m interrupting the checkout flow so I keep it short and simple also ensuring there is an easy way for the customer to say ‘no thanks’ and continue on. I’ve found that this is my best performing upsell technique, however it seems to be seldom used elsewhere.

The second opportunity you have in the checkout process is when someone is confirming their order. You can see in this example from SitePoint that they are subtly suggesting some alternative products. Amazon do a great job of this as well.

Post sale upsell

The post sale upsell is one of the most often used techniques and normally is an email sent post purchase offering them a similar product to the one they purchased. It might be a more advanced eBook or course if they originally purchased a beginners guide. It’s much easier to sell another product to an existing customer than it is to find a new one. That is of course as long as you treat them well.

What to upsell and when

At each stage of the above upsell techniques, the customer is in a different stage of the sales cycle. In the first instance when they are reading the pre-sale upsell they may not even have decided to buy. In the checkout stage they have committed (in their own mind) that they will buy, and post sale they are hopefully enjoying your product. So…

Pre-sale: I find bundles of similar priced products work best here. So ‘buy two books and save X’.

Checkout: Again I find bundles work well here, but also slightly cheaper priced add-ons can also work well. So for example, extra video content or downloads for $5 on your course page.

Post sale: This is where you have some freedom. Having proven yourself with one product you might look to offer your premium, more expensive offer. For example you might offer personal coaching services to someone who purchased one of your eBooks. Alternatively you can simply offer alternative products to the one they purchased. With a little testing you’ll figure out which upsell works for you.

Some things to consider so as not to piss off your customers

Upsells done well can be very rewarding, done poorly and you can frustrate your customers to the extent they no longer wish to deal with you. So here’s three little tips to ensure you don’t look silly.

Automatically adding things to their cart.

Adding things to people carts that they didn’t ask for surprisingly converts really well, but there is an element of dishonesty about it and if trust is important to you I would walk away from this.

Offering an additional product that they already own.

Where possible (and this is often difficult) try not to offer someone an upsell on a product that they already own. A customer doesn’t care about the technical challenges of this. They’d like to think you value them enough to remember what they have bought.

Offering them the same product when they’ve already said no thanks.

Most people don’t mind being offered an upsell. But when you offer them the same one over and over again it can start to become frustrating. Don’t be afraid to offer the upsell, but honor the decline if a customer indicates such.

Doing the math on the benefits.

There is a fine line to walk when balancing upsells with a low friction checkout process, so you need to ensure that you are measuring your upsell offers and they are not resulting in lower overall sales. I’d be suprised if they are, but there has been instances where I’ve had to back off my upsells to find the right balance.

So that’s how you can use upsells to boost your bottom line.  If you don’t, you might be leaving money on the table.

From Spark to Sale in 18 Days

Some of you will know that Darren has just headed off for a well earned 10 day break. While enjoying his holiday, Darren has bravely given me the keys to ProBlogger to share a collection of posts – with of course the one condition that I don’t scare you all away :)

Together we’ve picked 5 posts that I do hope you will all enjoy and importantly get something from.

The first is a story, or a mini-case study if you like about SnapnGuides. A new brand and product that went from idea to reality in less than three weeks. Before I get into the nuts and bolts, I want to give you the context behind the SnapnGuides decision…

The Need before the Solution

For some time we’ve talked about creating short mini-guides on Digital Photography School(dPS). There were quite a few potential eBook topics with clear demand that our current publishing process couldn’t meet. The subject matter was valuable, but wasn’t as deep and broad reaching as previous dPS eBooks, thus we could never give them priority over other eBook ideas. We knew with some out of the box thinking, there must be a way to deliver these mini-guides, however there were a couple of considerations we needed to make outside of our publishing priorities.

  1. Historically dPS eBook titles have been significant both in length, subject and market appeal. – In other words they are big books that comprehensively cover a subject that most photographers would be interested in. Our mini-guides on other hand are quick reads that cover a topic within a specific photography niche.
  2. Prices of dPS eBooks are between $20 and $30, due to their size, scale and comprehensiveness. – We couldn’t charge the same as existing eBooks for our mini-guides. Correction, we could have, and some people would have been happy to pay, but we felt $7-$10 was more appropriate. The risk was if we launched lower priced eBooks on dPS it could devalue the larger eBooks.
  3. The value of the dPS brand is something you only carefully tinker with. – Millions and millions of people visit dPS every month to help improve their photography. It’s built on a foundation of value both through the free content on the blog and great discussions in the community but also the content available through the eBooks. These new mini-guides were a new, unknown entity for us. Our standards of quality would always be maintained however they were shorter, cheaper and more niche. The impact they would have on the dPS brand was unknown for us — and presented quite a risk.

A quick rule of thumb about brand impact. If you’re thinking of making a change that may impact your brand, I like to ask the questions “Will this change the way other people describe my brand? How will it change? Is that a change I want?” In the case of our mini-guides it would be “I got this great little book from dPS, it only cost me $10 and was perfect for me as I like X.”

Enter SnapnDeals then SnapnGuides

Talking through these issues, Darren and I first considered SnapnDeals as a place to publish the new mini-guides. We could still leverage the dPS audience to bring awareness to the guides and given SnapnDeals is more about deals and cheaper prices this seemed a good fit. The problem with SnapnDeals was that it’s sole purpose is time limited offers on photography products, not publishing it’s own products. Adding this new dimension to the brand might dilute its original purpose. We ummed and aahhed about this for a while before finally coming up with the answer. Solution:Create a new brand under the ‘Snapn’ sentiment but focused on publishing and thus SnapnGuides was born. It …

  1. Allowed us to define a new, ‘fit for purpose’ brand
  2. Presented little or no risk to the dPS brand
  3. Came with no existing price expectation

However what that meant was, we needed to a start a brand and website from scratch and due to scheduling we had only three short weeks to get it done. Always up for a challenge, it was time to make it so.

Building SnapnGuides in three weeks

Given the time pressures we had to adhere to three basic rules.

  1. Keep it simple
  2. Leverage what we can
  3. Fine tune later

Keep it simple

In a perfect world we would have designed a new theme for the site, installed WordPress, got it on our main hosting platform but that takes time. Instead we chose to launch the site and brand with one single page, the sales page for the book. If it’s successful (more on that later) we’ll do it right. We also kept the people involved to a minimum to keep decision making simple. There was Darren, Jasmine and Myself and all decisions were made within a 30 second Skype chat.

Leverage what we can

We’ve already got a good system set up for selling dPS eBooks. We did want to separate the brand where possible, but leverage what we already had where needed. For example we are using the same Paypal account as dPS however have a separate payment email address and an independent e-junkie account (shopping cart) so we could keep the experience on brand.

Fine tune later

I’m not a perfectionist like say my friend Matt Magain, but I do like it when things just work. That said, when there is a time pressure, you need to come to terms with the fact that you’re not going to get everything right upfront. You’ll be fine as long as the fundamentals are there — you can always circle back and fix up the rest.

The process

I thought I’d share the actual process we went through (outside of creating the mini-guide itself).

Hosting and domain

  1. Register and setup the domain
  2. Create hosting environment (see note below)

Sales page

  1. Wireframe and write copy for the sales page
  2. Hand the wireframe to a designer
  3. Review and finalise design (artwork only)
  4. Hand the design to HTML and CSS coder
  5. Review and test web page
  6. Load up to the hosting environment.

Hosting the site: For ProBlogger and dPS we use synthesis from CopyBlogger however, we were eager to play with a new service called site44.com. How this works is it simply creates a dropbox folder for your website which you save the files too, it syncs and your site is live. It’s sits on Amazons server cloud so can take just about any traffic you can throw at it. We did go the paid option but did all our testing on the free plan. It’s very cool.

eCommerce

  1. Create a new e-junkie account for SnapnGuides
  2. Create a new email alias for current Paypal account
  3. Link new email alias to e-junkie account
  4. Set up and load SnapnGuide product
  5. Integrate with sales page (above) and test.

Prelaunch

  1. Final changes to the landing page. (I tend to make lots of changes here)
  2. Independent review and test of sales page. (more changes again)
  3. eCommerce check (actually buy the product yourself)
  4. Scalability test

Then of course there’s the launch, but that’s a whole series of posts!

The result

It was a late night on the date of launch (most of them are) but as I fell asleep at 3AM I was really happy with what we’ve been able to create in such a small period of time. That smile widened when I checked in on the sales a little later in the morning. Suffice to say that our experiment was a success and we’re likely to see more SnapnGuides in the future. Doing things that other people say can’t be done, in timeframes that seem impossible is really a part of my everyday life. But I’d love to hear any stories you might have in launching a new product under a time constraint and of course if you agree or disagree with anything above.

Four New Ways to Monetize a Blog

The ad industry is dead.

Target will only buy remnant inventory. Federated Media, the darling of the online ad world, is just about vaporized. And media behemoth IAC is building a state-of-the-art ad sales system that will work like a trading floor where you don’t even know what content you’re buying—you only see the profiles of the people who are viewing the content right this second.

So how are people going to make money blogging? Here are four ways.

whiteboard

Image by Jeff Kubina, licensed under Creative Commons

1. Build a paywall

This was once seen as impossible. But after growing up online, generation Y reads and writes more than any other generation in history and is therefore more willing to than others to pay for online content.

This attitude has opened up lots of fee-based content models. Today The New York Times is successful in its paywall strategy, and it’s paved the way for bloggers to start looking at this as a viable option. Andrew Sullivan, for example, launched a paywall and raised $100K in a few days.

The problem is that a paywall is limiting rather than expanding in terms of the ways you can connect to the world as revenue options grow and change.

2. Turn your brand into a company and take in investors

As a serial entrepreneur, I saw this option coming early in the blogging game. So I named my blog something that was not attached to the domain name. Then I built up the brand name, sold the brand to investors, and spun off a company.

I don’t know why more people don’t do this. It’s a great way to leverage your community-building abilities, if you have them.

In this scenario, you hold onto your blog and your personal brand and you own stock in the spin-off brand. (And look: I recently gave up the CEO position and went back to blogging. But I held onto the founder’s stock. It’s like a big lottery ticket.)

3. Use your blog as an incubator

The best way to test new companies is to launch them. You could throw up a product offering on a web site, then announce it on the incubator blog. If it takes off, fine, if it doesn’t, then announce the next product.

In this scenario, the blogger is like a full-time marketing team for a range of startups within the incubator. Keep writing good content and you can send your audience to any beta site you need to. In this scenario, you’d get stock in each of the companies that you help launch.

4. Go after a talent acquisition

It’s common these days for companies to buy a startup to get the employees who would otherwise not be in the job market. You could create this same scenario with your blog.

Typically, a talent acquisition is for developers. But I can see it happening for someone who is amazing at PR, for example, and is essentially offering up her social media sauce and her high-powered media network in the talent acquisition of her blog.

Another way I can see this going is that someone uses the blog as a way to display thought leadership in the industry, so the acquisition’s purpose is to have the property attached to the larger brand, but also, to get the talented thought leader behind the blog.

What will you do?

Each of these four ideas takes planning, but with ad sales no longer being a viable option for blog revenue, we need to think more creatively.

Blogs are clearly becoming more and more prominent in the social and intellectual fabric of our lives. Those of us who can adjust in the most creative, big-thinking ways will benefit the most from our blogging talents.

Contributing author Penelope Trunk is a serial entrepreneur, and the author of the bestselling book Brazen Careerist: The New Rules for Success. She has written for a wide range of publications including Time, Business Week, and the Wall St. Journal, but she likes writing for her blog best: http://blog.penelopetrunk.com.

Behind the Scenes of a Successful Blog Acquisition [Case Study]

I really love the idea of buying and selling websites. Recently I listed one of my blogs on Flippa, a marketplace for buying and selling websites, and sold it successfully.

Then, I bought another blog outside of Flippa. Since we’ve already talked about selling blogs this week, I wanted to walk you through my buying experience today…

Fortune cookie

Image by Flickr user quinn.anya, licensed under Creative Commons

A couple of months ago while browsing the web I landed on a blog called WPBlogTips.com. Eventually, my eye got stuck on a banner that said, “This site is for sale”.

At that time I was thinking of starting a blog in the internet marketing niche, which is the niche that WPBlogTips.com covers.

To be honest, I personally hate to start a blog from the ground up. It’s a lot of work! Choosing the domain, crafting content, building traffic, waiting till the Google sandbox effects end before you can start link building, growing an active community … obviously there’s a lot to do, and in many cases the job is tedious. I would prefer to buy an established blog in a niche that has decent traffic, an engaged community, and quality content.

Long story short, I decided to buy that blog.

Doing due diligence

Before jumping in to buy that blog, I undertook some due diligence research on both the owner and the blog itself. Doing your homework before you purchase may help you to avoid disappointment down the track.

So before I made an offer on the blog, I researched a few things:

  • the owner of the blog
  • the site’s traffic stats
  • the blog’s monetization history.

Knowing more about the seller

Knowing more about the seller is really important task before you make an offer, or can even calculate how much the blog is worth. It’s especially important if you are not willing to use a third-party transaction site like Escrow.com to manage the transfer of payments and assets in the acquisition.

Here are the simple steps I took to research the seller of the blog.

  • Search the domain’s WhoIs information: Check if the domain is handled by the same person who runs the blog. In my case, the domain was not WhoIs guarded, so I was able to find the owner’s details and their address. If that information was protected, I would have ask him to remove the guard so I could see the data. This is an important first step in verifying site ownership.
  • Do a seller profile web search: A simple Google search should show you the profile of the seller. I also found some other blogs that this person owned, and I found that reassuring—it’s nice to deal with a person who has some kind of reputation online. That’s not something most people would achieve if they weren’t honest and trustworthy, nor is it something they’d throw away by behaving badly in a site sale.
  • Search on social media: A simple search on Facebook, Twitter, and Google+ also told me a lot about the seller, and how he deals with others. Today everyone is social, especially bloggers. So this is a good way to research a site owner.

Analyzing blog traffic

Once I’d got the details of the blog’s owner, I contacted him and asked him to send me some stats for the site’s traffic and its monetization history.

If you’ve ever looked to buy a site on Flippa, you might have seen a section called Claim Traffic where sellers need to claim their traffic by uploading Google Analytics verified stats. The problem is that straight traffic stats say nothing about the site’s traffic sources, or what the most popular content is. These are important factors in the site’s current success and its potential, so it’s important to ask for more detailed stats before you buy.

Importantly, traffic screenshots can be faked easily. So always ask for verified Google Analytics reports when you’re asking for Analytics data. Then, start analyzing…

1. Determine what the Analytics stats really mean

You will get a bunch of details from Google Analytics, but those details are as good as junk if you can’t analyze what they really mean.

  • Unique visitors per month: This is one of the key factors that helps determine the blog’s value.
  • Bounce rate: I think the normal bounce rate of a blog should be around 60-70%, but in this case, the bounce rate was very high. By looking more closely at the blog, I found that the main reason for the high bounce rate was poor site navigation and a lack of user engagement. I felt that with a little effort, I could bring the bounce rate back to a normal level.
  • Average visit duration: Again, I wasn’t satisfied with this data, since it was lower than my other blogs’, so I had to look a little deeper to find out the reasons for it. The reason for the low visit duration was, again, a lack of reader engagement.

The key lesson here is to check the blog’s stats, not only to get some idea of what the blog is worth, but also to determine where you can improve the blog, and how. This will help you get an idea of how much time you’ll need to put in to improve things, which will help you to come to a decision about whether to buy or not.

2. Looking more closely at traffic sources

Believe me, getting traffic is not a big deal today. Just Google “buy traffic” and you’ll see tons of services that offer you 10,000 visitors to your site for just $20.

The only way to make sure that the traffic to the blog is original and of high quality is to look at the traffic source stats of the site’s Analytics reports.

My case

Before I bought it, WPBlogTips.com’s traffic was highly dependent upon Google and other organic sources. This is both good and bad.

The good thing is that we can say this blog has high targeted traffic.

The bad thing is that whenever Google updates it search algorithm, chances are high that the traffic will drop—if not almost disappear.

One of the things I discovered as I looked at this data was that Facebook and Twitter aren’t in the top ten traffic sources. The main reason was that the blog had almost no social presence. It did have a Facebook page and Twitter account, but there was no reader activity in these forums.

Another thing I found was that when I excluding Google from the mix, there was no strong referral traffic source. Likely reasons were a lack of networking and link building. So obviously I would need to focus on building these elements after the acquisition.

3. Uncovering the audience’s interests

The interests of a blogger may vary time to time. It is quite common for a blog to have many transitional stages before it reaches to its “present” state. For example, WPBlogTips.com was obviously in the “blogging tips/internet marketing” niche, but the previous owner had also published many articles that had to do nothing with that niche.

So before buying a blog, it’s important to find out what all of the popular pages of that blog are. Sometimes the blog you are about to buy may have high Google ranking on topics other than its main focus. Let me explain.

Imagine that you are buying a blog in the internet marketing niche. Your main goal in buying that site is to sell SEO services without paying a penny for advertisements or making any extra marketing effort.

Now, what if that site has a low rank for the specific keyword you are targeting—the traffic’s coming through comparatively off-topic posts? Or, what if most of the blog’s audience is actually interested in a topic that’s off the main topic of that blog? If you don’t intend to maintain that off-topic focus in your content, you may well lose a large chunk of the blog’s loyal readers.

So it’s important to understand the exact nature of the audience for the blog you’re researching.  Find out which are the popular pages on the blog, and ask for content keywords  lists from Webmaster tools. This information gives you a very precise idea about the interests of the blog’s audience, and on which keywords Google ranks the site well.

My case

Most of the readers of the blog I was researching came to the site through search engines. Because people were getting the exact thing they were looking for, they weren’t returning to the blog.

I could see that if I added related articles lists to every post, that may catch the eyes of readers without harming the user experience, and increase the blog’s time on site metric and repeat visit potential.

I also noticed that a few of the off-topic posts on the blog had received some Google juice, but I was planning to remove those, so that didn’t factor into my buying decision.

Another problem I found was that the blog wasn’t ranked well on Google for any relevant long-tail keywords. This was especially a problem on the Services page, so I couldn’t expect many client requests to buy those services. I thought this may because of a lack of effective link building, but it meant that, to begin with at least, I’d need to buy traffic from Adwords.

Reviewing monetization

A couple of months ago Flippa introduced a new feature called the Verified AdSense Report, which is similar to the Verified Analytics Report. This feature is hugely helpful for buyers, since it means they don’t need to rely more on screenshots of AdSense income provided by the seller.

However, there’s still no way to verify PayPal earnings like there is with AdSense. So while deciding how much a blog is worth, as the buyer, you still have to rely on screenshots provided by the seller, no matter whether you’re buying the site through Flippa or independently.

That said, I would always prefer to buy a blog that is under-monetized and has massive traffic rather than a blog that has decent traffic and makes a lot of money. There are two reasons for this.

1. You need to rely on the seller’s data

When you’re calculating how much a site is worth, it is common to give preference to earnings over traffic.

This means that the higher the earnings of a website, the more you will pay to acquire it. The problem is that as a buyer, I can’t be 100% sure that the data provided by the seller is true, unless he gives full access to verify the payments, which is almost impossible.

So the risk here is that the seller’s not being truthful about the earnings, and if you base your valuation of the blog on a false earnings figure, you’re going to lose out.

2. What if the traffic declines?

Recently I came across an article by Daniel Scocco entitled, Where there’s traffic, there is hope. In it, he explains his experience of buying two different blogs: Blog A, which had high traffic but was under-monetized, and Blog B, which had decent traffic and earned a lot of money. Due to fluctuations in search ranking, the second blog’s traffic dried out, and so did its earnings. Blog A, on the other hand, continues to make a profit.

So I repeat: where there’s traffic, there is hope!

My case

The blog’s owner had not tested any monetization methods on WPBlogTips.com. He tried to sell blog migration services from the site, but didn’t have a nice portfolio to support the work.

I felt that his offer was not unique. Hundreds of different blogs provide Blogger-to-WordPress migration services, and there was nothing to make his service stand out from the crowd.

Soon after the acquisition I started an AdWords campaign to promote those services. To make this offer unique I offered free Blogger to WordPress migration. The only catch is that the client must buy Hostgator hosting through my link, so I still gain income, in the form of affiliate commissions.

Currently, I’m also testing AdSense units on that blog. I will be testing how those units work and, if they’re a success, I’ll continue to use them on the blog. I am not a believer of quick money making schemes. Making money from a blog definitely takes time.

I also started an email newsletter subscription on the blog. Email lists will definitely help me monetize this site in the long run. In coming months I’ll also try selling direct ads. However, I’m not hurry. I’m currently focused on attracting more traffic and making readers more engaged with the blog.

Pricing the blog

Most first-time sellers won’t have any idea when it comes to deciding how to set the price for their blog. In fact, sellers frequently overestimate the value of their blog, since they have an emotional engagement with it and have spent so much time and energy building it up.

Many people suggest that setting a price using the monthly income of your blog is the way to go. But for a buyer, to be honest, this kind of equation doesn’t make much sense.

For example, imagine that Darren decided to sell Problogger.net. Do you think that he would be willing to sell it for 24 times the monthly income? No way. He’d want more than that, for sure. On the other hand, imagine you own a blog with no reputation, and you wanted to sell it for 24 times the monthly income. As a buyer I probably wouldn’t be interested in paying such a big price for a blog with no reputation.

In simple terms, buyers value the reputation of a blog—as that impacts reader loyalty—sometimes more than the history of earnings or traffic stats.

My case

As I mentioned, WPBlogTips.com hadn’t been monetized. Yet the seller wanted a very high price. After some negotiation, I bought it for 37% of the initial price he’d set.

All of the negotiation was done over email. However, after we agreed on the price, I made a phone call to the owner. Why? Because it is nice to establish a good relationship with the guy who you are dealing with—especially when you’re about to transfer large sums of money in exchange for an asset like this.

Managing the purchase transaction

The safest payment method for buying or selling digital assets online is to use a third-party service like Escrow.com—especially if both the buyer and seller don’t share a high level of trust.

The buyer can create an account on Escrow.com and transfer the money to this account. Escrow.com will hold the payment until the transaction of property is complete and both parties flag that they’re happy with the outcome.

My case

The seller of WPBlogTips.com is Indian, like me. This helped to make me confident about the transaction.

Even if a problem did arise, the law we would be dealing with would be our national law, not other international treaties that may not be consistent across nations. I felt pretty confident that no problem would arise because I knew the seller has good reputation as blogger, and he would continue to run other blogs after the sale, so he wouldn’t want to tarnish his reputation online. My due diligence had paid off here.

I told the seller that, as a first step, I’d pay half the price we’d agreed. After he received the money, he’d transfer the ownership of the blog to me, and after that I’d pay the balance. We didn’t use Escrow or similar services, and for us, everything went smoothly.

Content strategy

Even if you are buying a blog that has a lot of good content, nicely targeted traffic, and a massive community you might need to spend your time building content.

Sometimes the previous owner may have a personal approach to the content. In such cases, the challenge for you will be to write more content without boring the community, or losing them altogether.

How can you enhance your readership by helping readers, and thereby growing the community on your blog? To get clear idea, answer these questions.

  1. Will you have time to spend on your blog writing content?
  2. If not, is it profitable to hire a freelancer? Will accepting guest posts enhance your community?

My case

The old owner had accepted and published many guest posts on WP Blog Tips. But my strategy is different. I wanted to bring more visitor engagement to the blog, so I stopped accepting guest posts and started writing every post myself. This really helped. The comment counts increased and an interactive community started to grow up around the blog.

As I mentioned earlier, there were many off-topic posts on the blog. I won’t be deleting those posts, because I hate to be landed on 404 pages and expect the same goes for my readers. But I will be developing a more focused content approach going forward.

Blog acquisition success

Buying a blog is not a tedious task—at least, it is not as tedious as building a blog from scratch! If you do it correctly, buying is breeze.

WPBlogTips.com was not properly monetized before I acquired it. I am not looking to sell it in future, so this will be my main online project as of now. My goal is that within a year I can make the money I spent to buy it.

Here are a few other tips I learned in buying a blog that I believe will help you.

  • Respect the seller’s work: Yes, you’ll need to ask the seller for different stats, but make sure that you always respect the seller and their work. Understand that this has benefits for you both. The rule of thumb is to give respect first; only then can you expect to get it back.
  • Beware of “potential”: Don’t get obsessed with the supposed “potential” of the blog that the seller might be keen to show you. Most of the sellers have habit of claiming that their blog has huge potential, in an effort to make huge money. But the fact is that they would be unlikely to sell the blog if it had massive potential. So rely on the stats, and your assessment of how well the blog fits your skills—not on the “potential” the seller describes.
  • Analyze the performance: When I bought my blog, I found that its bounce rate was very high. I was sure I could improve it a lot with little effort. So it’s important to carefully analyze the blog. Learn how you can improve the overall performance of the blog and what strategy you can implement to monetize it further. This will help you to gauge the potential of the blog for you, specifically.
  • Start networking: A couple of months before I acquired the blog, I started networking with other bloggers in the same niche by commenting on their blogs. The result was that those bloggers who I interacted with have helped me out by spreading the word about the blog, and commenting on my blog. This not only increases my traffic but it also helps me to build an interactive tribe on the blog.
  • Remember, you can buying outside Flippa: Flippa is one of the best places to buy a site. But if you are serious about buying I’d suggest you look beyond Flippa. You can find tons of sites for sale—try searching on Google with keywords like “<your niche> website for sale”, “<your niche> site for sale” and “<your niche> blog for sale” using double quotes.

One final tip is to ask a blogger directly if they are ready to sell their blog. They may not consider selling until you ask! If you can’t find any recent posts or activity on a blog, chances are high that the blogger might be busy with some other work and would consider selling it. Believe me, this strategy works, and asking costs you nothing.

Have you ever bought a blog? I’d love to hear your story in the comments.

Contributing author Shahzad has recently bought a blog WPBlogTips.com where he writes about unconventional blogging tips. Find his free guide on buying and selling websites here.

The State of the Blog Sales Market: Interview with Andrew Knibbe of Flippa

As blogs are increasingly recognized as business assets—or businesses in their own right—more entrepreneurs and publishers are looking to enter the blogosphere by buying a blog. And as we’ve already seen this week, in many cases, bloggers are happy to sell.

While blogs are often bought and sold privately, to get a reliable overview of the blog sales market, we spoke with Andrew Knibbe, Operations Manager of Flippa.

Andrew Knibbe of Flippa

Andrew Knibbe of Flippa

Among the little-known facts we discovered in this interview were:

  • blogs make up more sales than any other site type on Flippa
  • the platforms used to run and monetize a site can affect its value
  • building your authority in your niche can be a big help if you want to acquire a blog down the track
  • yes, Blogger blogs do sell!

For full details, read on.

PB: Today I’m speaking with Andrew Knibbe from Flippa. Andrew, thanks for talking with us.

No problem.

First up I was wondering if you can tell us a bit about the market for blogs on Flippa. Not much is known about the blog sales market and you guys obviously have a good overview of what websites and being bought and sold at the moment. So can you tell us a bit about that in relation to blogs?

Sure. Blogs are probably the biggest part of Flippa. About half of our websites sold tend to be blogs. It’s probably a fraction up on previous years—it’s probably grown at two percent in 2012 based on 2011. So they’re pretty popular, they sell well, and it’s probably our bread and butter.

Blogs as a % of total sales

Blogs make up the main site type sold at Flippa

The next [site type] is ecommerce, and that’s at about ten percent of what blogs sell for. So blogs are a big part of what we do.

Are there particular types of blogs that sell better than others or key niches that are more popular?

Yep. The ones that tend to sell most in terms of volume are health, entertainment and internet-related niches. Entertainment and health are up on the previous year but internet’s dropping in terms of demand.

The demand tends to reflect in terms of the multiples as well. So the prices people pay for those sites is up for health and entertainment. The prices for internet sites tends to be dropping a little bit compared to the previous year.

Also I guess the resourcing of these sites kind of varies a lot, so we see different quality blogs in some of those niches come through which tend to drop the price down was well.

So overall are you seeing more developed or more advanced blogs more frequently? Or is the spread staying reasonably consistent?

Currently the spread is relatively consistent. I think about two or three years ago when Google’s SEO algorithm was a bit more lax we saw a lot more autoblog content come through. That seems to have trailed off primarily because the buyer demand is less—because they don’t perform so well in terms of search engines—so that’s trailed away.

But in terms of the sophistication of sites and blogs that come through, it’s stayed relatively constant. There’s some really awesome ones, there’s some blogs that have obviously been neglected for a while, and people are selling them off, and everything in between. It’s pretty stable.

So there’s opportunities if you’ve got a reasonably developed blog—from that point on there is an opportunity to sell it?

Yeah, absolutely—depending on a few factors. But for the most part, if it’s got something going for it—and even age is something that goes for a blog, buyers value that—that gets reflected in the price.

How blog management affects demand

So with the blogs that are sold on the site, do they tend to be more single-person operations (like just me and my blog and I want to sell it), or do you also see sales of larger blogs with multiple authors or multiple owners?

Yeah we’ve seen, as of late, more sophisticated blog operations come through. My understanding when I see some of the sellers is that they’ve become a bit more sophisticated as well. They tend to operate as “publishers” rather than pure solo bloggers. So they won’t set up a staff, but they’ll have contacts that they use to write some of the content—either in full or to supplement their own effort.

We still see a few solo ones, but we’re seeing a growth in people who outsource part of what their blog does.

Firstly, when you say “publishers”, would they have a portfolio of sites?

Often, yes, they’ll have more than one. If they’ve got a special-interest blog, it tends to be the solo person who’s got an interest in that particular niche, and that’s what they focus on. But also we’re seeing a larger segment of people who’ve got multiple interests and have multiple blogs, and kind of run it as a bit more of a commercial operation.

And so that outsourcing—does that make the blog more saleable because it’s more of a business than a personal labour of love, or because there’s automated aspects?

Yeah, I think a lot of the buyers tend to favor sites where it doesn’t take up a lot of their time necessarily, and also that means that the revenue and cost base is reflected a bit more clearly as well, because the costs are [shown] for the people who do the work rather than the owner who doesn’t necessarily cost out their time.

But yeah, we’re seeing a few more of those come through, which is interesting, and probably positive.

From the buyer’s perspective, would most of your buyers be people who are looking to add to an existing portfolio of sites? Or they have a site and they need to tack a blog on? What are most of your buyers like?

There’s probably two segments. One of them is people who are just starting out, and they tend to buy newer blogs that aren’t necessarily SEO-ranked, for example.

For the guys that are buying existing sites, they tend to own one already—it might be in a complimentary niche or it might be something totally new—but they’ve got some background behind them where they’re trying to expand out to what they’re buying. So they’re not necessarily buying a blog for the sake of having a full-time job as a result of that purchase.

Are people selling blogs in languages other than English or from countries other than the western hemisphere? Are people using them as a means to enter a new market in any cases?

Possibly. For the most part, given the internet’s global, most of it tends to be English-based. That doesn’t mean they’re from English[-speaking] countries, but they’re English-language sites.

We’ve seen a few French, Spanish, Italian sites come through. Not a whole lot, but there’s a few that are on there, and they tend to attract those sorts of buyers. Whether people are looking to enter a Spanish market and they want to buy a Spanish blog, the volumes probably aren’t enough for them to do it that way, but they might stumble onto it, and as a result get into a particular country.

The key blog value drivers

You mentioned age before. How much does that matter? Are there particular characteristics at particular ages with the blogs that are for sale that are influencing price or interest from buyers?

Age is a good one. I think at some point, age matters a lot. So if you’ve got a blog that’s been around for a few months, and it has nothing else going for it, it’s worth a lot less than a blog that’s been around for like three years and has a good lot of traffic. So that age component counts for a lot.

Having said that, once you go past maybe three, four, five years, the age component tends to drop off, so you’re not getting a whole lot more bang for your buck once you go past a certain age point. But age definitely counts, because you can’t really replace age buy building [a blog] yourself. That’s probably the biggest thing there.

If you had missed that window where you’re going to get the most bang for your buck on an age basis, obviously there would be other factors that would come into play that would affect the value of your blog thereafter. Could you tell us a bit about what those key factors would be.

That would drive blog value?

Yeah, particularly for the older blogs.

For an established blog, the biggest thing that’s going to drive value is revenue. So if your site is earning two thousand dollars a month, you’re going to get more money for your site than someone who doesn’t.

I think after that, there’s traffic. So you might not be earning revenue, or revenue might not be so strong, but if you’ve got good traffic, both in terms of the quantity of traffic—visits, for example—and also what they do on the site (so if the bounce rate’s low, pages per view are high), that tends to keep the value pretty high as well.

Outside of that, I think some of the SEO components tend to be valued very highly. If you’ve got a whole lot of backlinks without a lot of traffic, that’s something that new buyers can fix up and do something with, and then either keep or sell on.

Another one is niche. We touched on a few niches beforehand, but there’s definitely some niches that are worth more than other niches. Finance, business—those niches tend to be more lucrative because they tend to generate more revenue. So if you’ve got a thousand users on a finance blog, you’re going to get a lot more money out of those guys than a thousand users on a pets blog, for example.

Buying assets: content, lists, social media and more

The word that I was waiting for in your list of value items was content! Obviously that plays into a lot of things—your traffic and your revenue and that kind of stuff. But I know that a lot of our readers focus very heavily on content.

So how’s blog content handled in the sale? A lot of bloggers might want to retain rights to the content they’ve written. Are rights normally included in the sale? Would they retain some rights? And what about guest posts, where it can be a grey area for a lot of bloggers?

The content baseline: we run Copyscape on Flippa, so if there’s no Copyscape matches, that tends to be attractive to buyers. Unique content is good, and the quality of that content tends to be reflected in things like SEO ranking and the like.

But when you’ve got that content and you go to sell your site, for the most part that’s included. My view is that if you’ve got a blog that you want to sell, but you don’t want to sell the content, you’re really just selling the domain, and that’s a different transaction.

So usually the content’s all included. Usually they’ll try and flag that it’s unique, and that they’re allowed to publish that content, and you can take the content with the site. Guest posts I’ve usually seen go across—I haven’t seen excluded necessarily. I don’t know if the guest poster comes back later on and asks for it to be withdrawn.

But on the whole the content comes across because it’s such a big driver of site value. So you’ve got an audience that’s been built around specific content, so without that, that audience is likely to disappear and search engine rankings and possibly revenue and the like mightn’t be there either, so in most cases that content component comes across—as does the source.

If they’re using existing writers to create the content, that’s an important part of the sale as well, to make sure those contacts don’t get lost as part of the transition.

One other question I have about content is to do with off-topic or outdated content. I know that one of the other articles that we’re running this week is a case study about a blogger who bought a blog and when he was doing his due diligence on the blog he could see that there was some off-topic content and outdated content on the site.

Do blog sellers on Flippa tend to shape their blogs for sale, and remove that kind of content first? Or is it up to the buyer to know what they’re buying, and that they’re not paying money for content that they later realise is not appropriate.

It’s probably more on the buyer’s side. To be honest, I think most blogs that sell on Flippa are being sold because the owner’s lost interest or they’ve run out of time, and so it’s probably started to wind down a bit, and it’s not as good as it could be. And so they’re not really going to invest too much in the blog necessarily before they sell it, apart from making sure that it’s running and doesn’t have broken links and the like.

But very often we’ll go and visit a blog that’s been bought later on, and it usually has a whole new design, has new navigation, they’ve probably improved their tagging of some of the content and I’m guessing they’ve fleshed out some content as part of that as well.

So it’s definitely more on the buyer end where they try to fix some of those things up and ultimately improve the ranking of the site as a result of that.

So that sounds like potentially good opportunities for buyers, in that if they’re buying a site that has room for improvement rather than necessarily looking for a site that’s at its peak.

Actually there’s probably two things there. I think some buyers are looking for the sites with awesome content that are broken in some other way, and they’ll tweak whatever it is, and suddenly make the content more available, and the site picks up from there.

And there are others that are looking to fix up broken content on a site that’s otherwise doing well and take it to the next level as a result of that.

As well as content, I know there’s some other assets that bloggers see themselves as having: one would be social media accounts, and the other would be lists—email lists. And you’ve also mentioned contacts in terms of content generation, but there may be other contacts that a site owner has made. Are those kinds of things often included in the sale?

Again, it depends. I think that the email list is the interesting one. Some site owners will buy and email list and attach that to the sale, even though they can’t really sell it. So I guess the smarter buyers will check out that it’s a double opt-in arrangement with email, and it’s for the site being sold.

We’ve got in our terms that you can’t include items that come from sources outside of the site being sold, but it’s almost impossible for us to police that. If we know about it, we’ll shut it down, but otherwise the buyer’s in the best position to check that stuff out.

The social media footprint is an interesting one, too. If the blogger or the person selling has done it right, the social media’s all attached and quite clean. But if they’ve got their personal Twitter account, for example, that’s driving traffic to the blog, that’s likely to not be included as part of the sale, and that’ll probably reduce the value of the blog if that’s a big source of traffic for that blog, or the audience. So that’s an important point.

I think the social networks themselves are a bit of a grey area in terms of transferring some of those accounts over, but in most cases it goes through. I’ve not heard of someone who’s bought a site with a Twitter account and had problems with it once it’s been moved across.

What about Pinterest? Are people selling Pinterest [accounts] as part of their blog sales?

We saw a whole bunch of Pinterest-type clones come through when Pinterest was big—eight or nine months ago.

Since then we haven’t seen much of a focus on that. I’ve seen a few ecommerce sites where Pinterest is driving a lot of their traffic—they’ve got an account with a lot of Pinterest followers, and they drive traffic to their ecommerce store from that. There’s probably a smattering of bloggers that do the same. I think it might depend on the individual nature of the blog as to how big a role that plays.

Brands and audience engagement: a balancing act

The next thing I wanted to talk about is the personal blog or the personally branded blog, versus a business branded blog, or one that’s not got your name attached to it. And then also grey-area blogs, like ProBlogger in a way. ProBlogger’s got its own brand, but then everyone associates Darren Rowse with it.

Do you see more personal blogs or more business? I’m assuming you’d see more business blogs?

Yeah, more non-one-person-associated blogs. I think that grey area is probably a relevant one, when the persona of the person who runs the blog even though it’s generic—I think even TechCrunch had that happen when they sold, as well—they tend to be taken into account, but it doesn’t necessarily drive the value.

I think, my name (AndrewKnibbe.com), if I tried selling that it’d be almost impossible—not because it’s just rubbish, but even if it was awesome, I think I’d be reluctant to sell it, because someone else has got my name, and they’re publishing things under my name, which I’d have no control over. But at the same time, the person that buys it has to try to stay authentic with an audience that knows I’m no longer there.

As a result of that—and they’re my two assumptions—we don’t see a lot of personal-brand blogs being sold on Flippa, because I think they’re kind of impossible to sell.

We definitely see a lot of blogs being sold where the person who’s founded the blog is very much front and center on the blog, and I’ve seen different ways people have managed that.

Can you tell us about those?

The ones I’ve seen that’ve worked most successfully is when someone who’s kind of in the same niche or industry, and who comes from a position of authority, takes over the blog, and takes it to the next level, which is a good thing.

Blogs that tend to get sold aren’t necessarily at their peak—they need a bit of attention—and so when someone [like that] takes it on, they’re likely to reinvigorate the audience, the content, and everything else, and then those people appreciate that. They don’t want to be getting low-quality content on a blog they used to love.

So I think the personality thing is a good question, but I think it’s manageable, depending on who takes it over.

A seller of a blog like that—would they be a bit selective about the person that they’re selling to?

It varies. It’s not always a price thing. My assumption would be that the one who’s willing to pay the most money is the one that the seller’s most likely to sell the blog to.

In a lot of cases we’re seeing people who’ve probably got an interest beyond pure money—in terms of making sure that their baby continues off into the sunset in a way that they like. And so they’ll ask a lot of qualifying questions of bidders to say, “Why are you interested in my blog? What would you do with it?”—that sort of thing to qualify them before they accept bids. It’s interesting.

So from the buyer’s point of view, if you wanted to buy a blog in your niche, then it’s probably a good idea to be building your authority for that purpose as well.

Absolutely. Especially if you come from a nicely related niche that’s complementary rather than competitive, that tends to work quite well. I’ve seen people do that—they’re in sport for example, and they’ve got a few sport blogs and they’ll go onto parallel [niches]. They’ll be into tennis and they’ll go into hockey or something.

They have some authority in one space and they kind of transfer that and people see they’re serious in what they think about it, and that comes through when they try to buy.

When those transactions happen, is it common that people would stage that so that the new personality is introduced to the audience rather than an immediate cutoff of the seller]?

I think it varies. I’ve seen in forums, where people who are active in forums who aren’t necessarily the owners of the forums, feel a sense of ownership over the forum so if the forum sells, they’re not so happy about it.

I think blogs with a lot of activity from the audience, they might feel the same way—they feel like it’s their platform to a certain degree. And when it sells they want to make sure that’s being done properly.

I’ve definitely seen some buyers take over a blog and they’ll contact the subscribers and let them know what they’re doing, what their plans are, and why it’s so awesome to stick around. Others I’ve seen not really do a whole lot in that regard, and I think it depends on how sticky the audience is to a certain degree.

Are there particular niches where that is more common?

Yeah, possibly the softer niches, pet or entertainment niches, or home style niches. That’s usually where that kind of approach is taken.

The value of a blog business, and the platforms it’s built on

We’ve talked a bit about key factors influencing a blog’s value, but one aspect that I wanted to look at were blogs that have a business attached to them, or where the blogger’s taken their blog and now they run a course, for example, so they’re selling a course through their blog. Or other products, like ebooks, or maybe they have an online store attached to the blog which is selling curated affiliate products.

Does that approach tend to be valued more highly than the traditional publisher monetization strategies like ads?

If when they go to sell that’s all included as part of the sale, in terms of those affiliate pages, definitely—don’t know if you want to hear it—but advertising models are the lowest performing. So if you’ve got a blog that relies on AdSense or BuySellAds or something, our stats show that these guys are earning typically less than two cents per visit off those blogs.

As soon as you include things like affiliate sales—again it depends on the niche—but monetization methods that are a bit more effective, like affiliate sales or drop-ship or some kind of ecommerce arrangement, suddenly you see the yield per visit just shoot through the roof.

Sometimes you’ll see people buy a blog that’s been monetized with AdSense, and within a few months it’ll be an affiliate network blog, and these guys are making a lot more money off the same audience simply because they’ve got a better monetization method plugged into it.

If you’re able to show that when you go to sell, if you’ve been able to monetize your audience better than through straight ads, that contributes to the sell price, most definitely.

In the stats that you gave us, one of the things that stood out to me was that in those different monetization strategies—and also within the different blogging platforms—those factors, the different ad network you choose, the different affiliate network, the particular blog platform you use, can affect the value of the blog.

Capital and revenue yield for popular affiliate networks

Flippa’s assessment of revenue and sales price for sites using popular affiliate networks

Yeah, absolutely. Sometimes the match between the niche they’re in and the affiliate network they use tends to be hand-in-hand. There’s the Apple app review blogs, and those guys tend to use LinkShare as the affiliate network, and as a result they tend to get quite good conversions because people buy apps all the time from those blogs.

There are others that are more built for forums, and so they convert as well, apparently, because of that.

So with those things, like LinkShare, is the blog worth more because that network has affiliates that suit the niche better? Or is it also because potential buyers are used to using that provider?

I think it’s the former. If people pick a niche that’s got a good affiliate provider, that’s always going to work in their favor. Having said that, you can have certain niches with multiple providers, and at the same time, you can pick providers who don’t provide a good return in terms of views or conversions.

For the buyers, it depends. If they know that the network being used is low-value, and they can switch it out for a higher value site, they’ll probably pay a higher multiple for that site, just to get it and switch it across.

There’ll be other buyers who don’t necessarily have that savvy, but they want a sure thing, so they know if they’re on a network that earns well, they’ll just want to buy it and they’ll pay market rate for it and then they’ll know that they’ve got a good income from that going forward.

And in terms of platform selection, I’m just wondering if for many blogs that are sold on Flippa, the buyer would change the platform that it’s built on.

You definitely see that. It tends to trend in terms of if you’ve got a really old, archaic platform, someone might move it onto WordPress because that’s what they’re working in, or move it onto Drupal or Joomla because that’s what they’re familiar with.

We see a whole bunch of Blogger sites being sold on Flippa, which surprised me. But you can see that trend going down over time, whereas things like WordPress is always right up there and Drupal seems to be coming back as well, which surprised me.

I don’t think people necessarily stick with the platform that the blog comes in on. Having said that, it could be hard-coded and it might be a nightmare to move it—I don’t know if they’d bother.

Great. The only other question that I had was can you tell us some ways that bloggers can work out the value of their blog or get an approximation?

I think valuations are inherently pretty hard, because no two websites are the same. A lot of people use Flippa to do valuations, so they’ll do a search on Flippa to try to find sites or blogs that are very similar to their own, and then they’ll watch those auctions and see them play out, and get a bit of a feel for what kind of demand there is, and what kind of values these sites go for.

Outside of that the rule of thumb is that the blog tends to go for between, say, 12 and 36 months’ worth of revenue, and that’s influenced by what we talked about before in terms of niches and traffic quality and the like.

Otherwise, you’re probably looking, by our rough guesses, at about 50 cents per monthly visit when you go to sell. So if you’ve got 1,000 visits, that’s $500 that you’re likely to sell for. It’s highly variable, based on a whole bunch of things, but that seems to be the middle ground, which might be helpful if you’ve got no idea at all.

It’s worth checking out what the current market’s doing, cause that gives you the best feel for what real buyers are paying for these sites.

Cool. Thanks very much for your time, Andrew.

No problem.