A couple of years ago I bought a site with great traffic, thousands of natural inbound links and heaps of excellent content for $10,000. On paper it was a gem.
I figured I’d improve the ad revenue dramatically, add some affiliate offers and double the value in months.
What could possibly go wrong?
Famous last words.
What went wrong is the niche is absolutely horrible when it comes to ad revenue. No affiliate or CPA offers worked either.
After my initial disappointment, I set the site aside and focused on stuff that was making money.
Which is another important lesson from this frolic, and that is to avoid distractions when you have something working well. I had several sites doing well at the time; I really had no business buying a big site.
And so the site sits earning a pittance. I keep it because I figure some day I’ll figure out what to do with it.
What I should have done is tested the niche for ad revenue potential before buying it.
Testing a niche for display ad revenue potential is easy and relatively inexpensive.
How to test a niche for ad revenue potential
Step 1: Publish content on an existing site that covers the same topic as your niche. Be sure to publish the type of content you would publish if you entered the niche. If possible, publish both text-heave content and image rich content. The two can vary with respect to revenue.
Step 2: Implement your best ad placements that you believe will work.
Step 3: Set up ad revenue tracking for that content.
Step 4: Buy traffic from Facebook with Facebook ads. Be sure to target who your target audience is for the niche.
Step 5: If you have an email list, send your email readers to the content. Track that revenue as well.
Step 6: Test paid traffic from other sources such as Bing Ads, Pinterest and Outbrain (or other native ad networks).
Step 7: Track revenue from each source.
It’s so much faster to test a few pieces of content on an existing website than setting up a brand new site or worse, buy a site.
A few things to keep in mind about ad revenue from different traffic sources
It’s astonishing how much ad revenue varies by traffic source. The following are my findings:
- Best traffic source for ad revenue: Facebook (both organic and paid). Therefore, keep this in mind when you test; Facebook ad traffic can be quite a bit higher than search traffic and Pinterest traffic.
- Native ad network traffic (i.e. Outbrain) is usually quite high as well. I find Outbrain traffic also generates a high revenue per 1,000 page views (RPM) (relative to organic search and Pinterest).
- Organic Google search traffic generates roughly one-half the RPM than Facebook traffic.
- Pinterest traffic generates an absurdly low RPM which is odd given some merchants claim it’s a good social media traffic source for selling products.
- StumbleUpon traffic does not generate a very good RPM at all.
What about using Google AdWords traffic for testing?
I don’t use Google AdWords traffic (paid Google ads) for sites with AdSense. It’s not totally prohibited, but as far as I know, AdWords traffic can’t be used for sites whose primary focus is ad revenue. This leaves me thinking twice about putting my AdWords or AdSense accounts at risk.
How do you quickly test organic search traffic for ad RPM potential?
Use Bing ads. That traffic is via the Bing search engine which is search traffic. While it’s not perfect for testing Google organic search traffic, it will give you an idea as to how search engine traffic will perform.
Be sure to buy traffic from countries your site serves
If you’re publishing a website mainly for the North American market, don’t figure you’ll save some money during testing buying traffic from China. That’s not helpful.
Test both desktop and mobile devices
If you want a sound assessment, be sure to test and track traffic performance 0n both desktop and mobile. This too will differ significantly (mobile traffic earning less generally).
How much should you spend for testing the niche?
A $100 at a minimum. A few hundred is ideal. More if you’re contemplating dropping thousands of dollars on buying a site.
Know what your main traffic sources will be
Of course this can change, but most people starting a website do so with a traffic plan, whether it be organic search, Facebook (paid or organic), Pinterest, etc.
Assess the RPM earned from your intended traffic sources.
Should you test traffic sources beyond your intended sources?
Yes, because you might find other sources that will do well.
How high should the RPM be in order to enter the niche?
This is the difficult question to answer because RPM will vary widely from niche to niche. Just because your testing results in a $5 RPM doesn’t mean you should avoid the niche.
It’s a balance of how much traffic you think you can get and the RPM.
If you think, with consistent effort and time that 5 million monthly page views is possible, a $5 RPM isn’t terrible (unless you have to invest so much money to get there that you’ll never make money).
5 million page views at $5 RPM is $25,000 per month.
However, if you believe 500,000 page views is about as good as it could get, a $5 RPM isn’t so hot. That’s $2,500 per month. Surely there are better options.
On the flip side, you might contemplate a niche with a $30 RPM, in which case 500,000 monthly will earn $15,000.
The final scenario could be a site with $50 RPM but if potential traffic is only 5,000 visits per month, that may well not be worth it either.
All niche require the following considerations:
- Do you think you can produce the content necessary to hit your revenue goals;
- Potential traffic;
- Potential RPM (derived from testing);
- Is it a niche you’re passionate about (this might sway you to pursue it even if RPM isn’t as high as you thought)
Your goal is to weed out the total stinkers
This niche testing procedure isn’t perfect for many reasons, which I set out below.
The main reason you do this type of quick and easy testing is to weed out the total stinkers. There are some niches where ad revenue is ridiculously bad (well below $5 RPM).
Reasons why this testing isn’t perfect are:
Paid traffic vs. organic traffic: Paid traffic, unless that is your intended traffic source, won’t perform identically to organic traffic.
Unrelated content on a site may make a difference: You’re testing content on an existing site that may not be related to the rest of the site. This unrelated traffic may not result in perfectly accurate revenue potential.
Lack of understanding in the niche: Niche sites evolve. When starting out, you don’t know what will work, but as you build out a site, you discover new ways of going about things and will improve it with respect to content, ad placements, keywords, etc. When testing, you will won’t get a full picture of how the site, if you build it, will perform in the long run.
Should you test a niche for potential affiliate success?
I think it’s safe to assume if you’re testing a niche for ad revenue potential, you’ve decided, at least initially, that the site won’t be affiliate-focused. After all, most sites built to earn affiliate commissions won’t have many, if any ads because ads do not earn as well as a well performing affiliate promotion content.
However, the same approach above could be used to test for affiliate potential. I’d probably focus testing on Bing ads since many people launch and build affiliate sites with intention of focusing on organic Google search traffic. It’s not a bad idea. You likely won’t break even or turn a profit, but you will get an idea, if you invest enough, whether search traffic will convert into affiliate commissions.
Don’t worry about losing money during testing phase
Your aim with testing a niche with paid traffic is not to make money. Instead, your aim is to see what the RPM will be from ads, or at least get an idea.
You simply need to send enough traffic to get a sense of what the RPM is and to find out if the niche is a total dud or has potential.
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.