Hang Tight... Calculating Website Revenue

Revenue Target:

Based on Visits/Month

Content Strategy

Traffic Strategy

Revenue Model

Optimization

Exact Traffic (If You Have It)

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Website Revenue Calculator

Key Concepts Behind The Model

Niche: The niche your website targets has a strong influence on how interested the audience is on spending money with advertisers. This affects both banner advertising and affiliate offers. In general, a the closer the audience is to a) buying something and b) buying something expensive / repeatedly, the more an advertiser or a merchant is willing to pay to promote their offer.

Content Strategy: All site visits are not created equal. If you're aiming to make money, you want to get visitors to engage with your content and spend as much time as possible. For advertising, this has a direct relationship with pageviews and the number of impressions. For affiliiate marketers and e-commerce properties, long visits frequently build authority and trust with the customer, which makes a sale easier. In simple terms, you want content density (cover many related topics), authority (say something of value), and engagement (offer exceptional resources, tools, and experiences which pull the user into your site).

Revenue Strategy: In simple terms, this identifies how much of the selling process you are taking accountability for. The easiest form of this is managed advertising - where you copy/paste some banner ad code on your website and an advertising exchange does the rest. The next level up is affiliate marketing, where you own pre-selling the customer and sending them to the right merchant. The final level, where you own the product or are managing an e-commerce store, involves the most work with you assuming full responsibility for the sale and product fulfillment. The larger your role, the larger your share of the profits... at the cost of being responsible for more work and more risk.

Traffic Strategy: This is another strong predictor of buying intent. Organic search traffic from relevant keywords tends to be very high quality, in terms of purchasing intent. Advertising can be a mixed bag, depending on where you're buying the traffic. In the final analysis, however, you need to compare price vs. value - cheap traffic can be expensive, in terms of results, due to lousy interest. And expensive visitors can often be cheap, on a cost-per-sale basis, due to better qualification of interest.

Optimization: Even within the same niche and strategy, all websites are not created equal. The more you test, the more you learn and the better you can position your website to make money. Having a disciplined approach to testing and improving your site can produce huge dividents in advertising revenue, search engine traffic, and user experience.

Model Design & Interpreting Predictions

Have you ever asked "How Much Should My Website Make?"

We built this website revenue calculator to give you an easy way to understand how much your traffic is worth. Enter some information about your site: what you offer, who your audience is, how you monetize, and what your traffic looks like. The model will generate a revenue target based on similar websites; statistics are based on the data we gathered in our .

This tool is based on data from 100 websites sold at public auction. The auction documents helped us verify traffic and revenue claims. We turned this data into a model - the model uses five factors (niche, content type, revenue model, traffic strategy, optimization level) to estimate how much money a site should generate. Sites with similar strategies tend to generate results in the same order of magnitude; while there can be a spread between "best" and "worst" sites, the gap is far less than seen between sites with different strategies for acquiring, engaging, and monetizing traffic. This tool is designed so you can tweak elements of your strategy (run 'what if' scenarios) and see the estimated impact on revenues.

For those of you who like to build new websites, this calculator can be used to estimate the potential profit from your ideas. To see how much your site will generate with different assumptions, change the option and hit the button.

We can - however - provide some good rules of thumb for valuation. Decent sized content sites which generate the bulk of their traffic from organic search, are well seasoned (been around) and have a high quality backlink profile generally sell for ~3 years of established revenue in today's markets. Prices tend to get discounted from there. If the backlink profile looks even slightly spammy - discount. If the site is in a highly competitive niche - discount. Younger sites frequently sell for a lower valuation (although this is sometimes masked by growth expectations). And if the site is dependant on paid traffic or social media promotion, valuations are frequently significantly lower. Be sure to incorporate the cost of operating the site - especially if you are using a content heavy or dropship model. If a site has significant expense (beyond hosting and basic maintenance SEO), the valuation would be based on revenue net of cost.

Another good rule - in general - is to get above $500 in monthly revenue as quickly as possible. We've noticed that sites above this level tend to have much higher odds of surviving over time. This is probably as much a function of owner engagement and psychology as it is directly related to the scale of the business.