If I were a selfish SOB, I’d say it’s a horrible business and should be avoided at all costs.
But I’m not selfish. Well, maybe I am just a little given I sell a course on the stuff.
The fact I spend far more time and money on my niche site portfolio than selling courses should tell you all you need to know.
In fact, I spend less and less time on Fat Stacks because my niche site portfolio has FAR more upside than selling courses does.
While most of Fat Stacks public materials are raw, what this focus does is give me plenty of insights to include in the paid materials and forum.
I’ll take raw but useful over polished but useless any day of the week.
Short answer: Niche sites is a killer business but there’s risk on the horizon.
2 main reasons it’s a good business right now
First, ad revenue is higher than it’s ever been. Years ago AdSense was the only game in town. Most pubs focussed on affiliate promotions. In time, better ad networks popped up and continue to pop up. Now we have outfits like Mediavine and AdThrive earning publishers outrageous sums of money.
Funny story. Yesterday I had a call with an email software outfit that I’ll be testing. I rarely schedule calls but I’m pretty excited about what this outfit is doing so I made an exception. They’re taking “passive email marketing” to another level.
Anyway, the guy I was talking to asked me what my niche site’s CPM was. I said for my biggest site it’s $35 to $40. He replied “I’m asking about cpm; how much do you make per 1,000 visitors?”
I replied “it’s $35 to $40 per 1,000 visitors.” He said “I don’t think you understand… do you know what CPM is?”
Anyway, eventually I got through to him that my site does earn $35 to $40 per 1,000 visitors.” He gasped. He couldn’t believe it.
But those of us with AdThrive and Mediavine in decent niches know it’s possible.
Okay, the story wasn’t hilarious but it does illustrate the point that ad revenue right now is very good (if you know what you’re doing).
And while I’ve enjoyed fairly healthy CPMs for several years, I’m still amazed at how much ads can earn pubs.
Another reason it’s such a great business is more people spend more time online. Everything is online. We have online access 24/7 thanks to our ever-present phones. Hopelessly waiting for some person to choose 5 scratchers at the gas station, surf the Web. Bored in class, surf the Web. Got nothing else to talk about on a date, surf the Web.
Five years ago mobile revenue was pretty bad because most people didn’t buy on their phones. These days ecomm is totally optimized for mobile purchasing. Mobile purchasing means better mobile ad revenue. While mobile ad rev isn’t as good as desktop, it’s far better than it was 5 years ago.
Just ask Yellow Pages how much they’re pulling in selling print ads. Can you buy a page in the Yellow Pages anymore? If you can, you’re probably throwing your money away. I can’t remember the last time I whipped out the Yellow Pages to find something. You?
More and more ad spending is online. That means more ad revenue for pubs.
But wait! More money and traffic means more competition, right?
I don’t have any data but my guess is there are more pubs trying to break into niche sites than 5 or 10 years ago. Just a hunch. It makes sense if you buy into the basic foundation of economics. More demand means eventually more supply in a free market. And for now, the internet is pretty much a free market. There are almost no barriers to entry.
It gets worse before it gets better…
There’s a storm brewing on the horizon that may seriously disrupt this business. It could be disastrous; or it might barely make a dent. Nobody knows but in all likelihood it’ll be somewhat bad to quite bad.
Loss of the third party cookie is coming to Chrome in 2023.
I’d like to think Google isn’t going to do anything to crater its ad revenue. Even if Google protects its revenue, that doesn’t mean pubs are going to fare okay.
We have no idea what this will do to ad revenue.
Some folks guess a 20% to 40% loss in revenue.
I’m expecting the worst… somewhere in the 25% to 50% revenue decline. It’s gonna suck. It’ll be a setback for sure. It’ll change the industry. I hope I’m wrong. I’ve been wrong many times.
Please note that my guess is merely a guess. I have no idea. I’m planning for the worst, that’s all. There may be no loss in revenue. I don’t know.
Right now could be the golden era of ad revenue on the cusp of entering the dark ages. Grim? Yup.
These are all maybes.
You need to be aware of this stuff.
If ad revenue does take a hit, that means…
You guessed it, less competition. Pubs will leave because there’s less money. Those who hang in there, will do well in the long run.
possible probable ad revenue will drop with the loss of the third-party cookie, I also expect that over time solutions will arise to bolster ad revenue higher again. Somebody somewhere will figure it out if they don’t before the big change.
And that means more competition… again.
And while all of this happens, other changes will take place. Some will be good. Some will be bad.
Fortunately, the lion’s share of our expenses are variable. My actual overhead is almost nothing (Web hosting). The remaining are highly variable; it’s mostly content. I can increase or decrease monthly content investment any time I want. I prefer being able to constantly increase my content reinvestment but it’s nice to know I’m not locked into huge amounts of overhead. Overhead sinks a lot of businesses.
Could this be a boon for affiliate marketing?
Recent Google updates kicked affiliate marketing to the curb. A lot of “affiliate” sites took a shellacking. Google’s timing does not strike me as accidental because one obvious solution to lower ad revenue is affiliate revenue. Google dealt that death blow in advance.
You can just imagine conversations like the following at Google HQ.
“Hey Sundar, you know what would be lots of fun? Let’s cut affiliate sites off at the knees so they all turn to display ads. Then, once affiliates make the switch to ad-supported site, we ditch third party cookies and watch the turmoil.”
The thing is, despite all the clickbait YouTube videos on the topic (including one yours truly published) affiliate marketing is not dead. Not even close. It’s just changed and to make it work means adjusting. That doesn’t mean I’m transitioning to an affiliate focus but I suspect the death of the third party cookie will result in a resurgence in affiliate marketing. It’s an option. Again, make sure you know how to go about it in today’s landscape. If you do it right, there are some big opportunities.
Is it a good time to get into niche site publishing?
Yeah, it is but you must do so fully aware of the both the upsides and downsides. You should like the business. If you don’t, there are easier ways to make a buck. More lucrative ways too.
As you can see from the above convoluted twists and turns of pitfalls, risks, and opportunities, you just have to be prepared for it all.
It’s a lifestyle business; at least for me it is. I like it. I’ll stick with it as long as I can.
Jon runs the place around here. He pontificates about launching and growing online publishing businesses, aka blogs that make a few bucks. His pride and joy is the email newsletter he publishes.
In all seriousness, Jon is the founder and owner of a digital media company that publishes a variety of web properties visited and beloved by millions of readers monthly. Fatstacks is where he shares a glimpse into his digital publishing business.