Niche Site Economics 101 (with Display Ads)

Economics 101

I’m a broad-strokes kind of guy. Big picture stuff. This works well for me most of the time but can also be a problem. I miss details. I usually don’t get too worked up about missing details because that’s my nature.

Read most of the blog posts on Fat Stacks and you’ll notice I focus more on concepts than getting into concrete details. That’s probably one reason Fat Stacks traffic isn’t as good as I’d like. I sometimes tell myself I should improve but at the end of day Fat Stacks is my fun blog. I don’t want it to become hard work or boring work.

Another area where I focus on broad strokes is the finance side of niche sites. I operate these days with some fairly broad financial generalizations when I plan out niche sites.

I know every niche is different. Traffic volume and revenue per 1,000 visitors is different. Keywords are different. Content requirements and difficulty is different. Competition is different.

With so many differences across niches, is it possible to create a financial plan for your next niche site?

If you’re the type of person that’s must know every detail and can’t stomach uncertainty or accept plenty of room for error, then no.

However, if you’re okay with the general potential accepting that traffic and revenue will fall somewhere within a large range, then yes, you can plan out the financials.

I’m okay with big ranges.

Because of that and based on my many niche sites (some big, some medium-sized and some tiny) I’ve put together the following very basic economic sketch for niche sites.

Use at your own peril. This is not set in stone.

Rule #1: The more content you can front load on a new site, the better. Niche sites are like investments. The more you invest up front, the bigger the pile grows over time.

Rule #2: If your only option is drip feeding content, that’s perfectly fine. It adds up. Before you know, you’ll have hundreds of posts if you consistently publish. Most financial advisors I’ve read harp on the practice of investing something, even a little bit every single month. Over time it adds up. It’s the same with content.

Here’s my “broad strokes” niche site economics (30/60/300):

  • Revenue per 1,000 sessions (RPS): $30
  • Average cost per article: $60 (1,500 words at $.04 per word on average)
  • Average sessions per blog post per month in the long term (2 years): 300

That’s it. From there I can plan out a niche site. The more I front load a new site, the faster I get to the average 300 visitors per blog post.

Here’s an example:

  • 100,000 monthly sessions requires 333 published articles.
  • 333 articles costs 333 x $60 = $20,000.
  • 100,000 monthly sessions earns $3,000 per month (with website valued at $120,000 using a 40x multiple).​

That’s it. Sell it or grow it.

Another example with goal of $10K per month revenue

  • Traffic required: 333,000 sessions per month
  • Number of articles needed: 1,110
  • Content cost: $66,600
  • Site valuation: $350,000 to $400,000​

That’s it. Sell it or grow it.

Simplistic? Yes, it is too simplistic but it gives you a rough idea.

You can definitely adjust the numbers for a more conservative outlook.

IMPORTANT: Getting to your target number of monthly visitors takes time. How fast? That’s impossible to say but 1 to 3 years is doable. I have one newer site that just hit 100K monthly sessions in just under one year earning $31 to $35 RPS.

Traffic screenshot 100K monthly visitors

Some pubs achieve it faster; most take longer.

In theory, spend $20,000 and spit out $120K in three years plus pocket the revenue earned along the way.

Niche selection dictates the RPS. I’m somewhat mindful of this. I have a few niche sites earning $10 to $15 RPS. I have a couple earning $38 to $55 RPS. The rest earn in the $25 to $30 range.

Keep in mind that I monetize with Mediavine which is a very high-earning ad network.

The flip side is I do terrible job squeezing out affiliate revenue. I could spend tons of time adding affiliate links to quite a bit of content to earn a higher RPS but I couldn’t be bothered. I could publish more buyer intent content to earn more affiliate revenue as well. I may down the road but for now I focus on informational content.

Lastly, my niche site economics is a very broad strokes view of this business. Every site and niche is different.

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