How To Increase The Sale Price Of a Website Through Ad Revenue
Updated on March 16, 2020
So you’ve decided to sell your website. Maybe running your site is no longer at the forefront of your career, you simply don’t have time to maintain it, or you would like to sell it as part of a business venture. Whatever the reason may be, the good news is there is likely someone who would be happy to purchase it from you. The key to earning a sizable profit on the sale is proving the site is valuable.
Websites typically are priced to be sold on a multiple of net monthly profit of the months leading up to when you decide to sell. If you are planning to sell your website in the near future and want to increase its profitability, one of the most effective ways to raise its market price is to prove the site is increasing in value and generating more profit month over month. There are many methods for boosting the monthly income of your site but the best way to increase the money your site generates is through ad revenue.
You can read more about why the ad revenue model is the most effective revenue model. As your website continues to grow, having multiple revenue models on your site could hurt your overall potential website earnings. With many forms of monetization on a single page, they begin to dilute the value of one another. If you have affiliate links, display ads, and native ads all on one page, you may not be aware of how these monetization sources are negatively impacting one another and you may be missing out on a lot of revenue. The ad revenue model is the most passive, simple, and hands-off revenue model that will earn you the most revenue.
Can you increase the value of a website quickly with ads?
Yes. You can increase the value of a website quickly or by taking a long term growth path to increase website value through ad revenue.
As a publisher, you know that more traffic on your site equates to more ad revenue; therefore, you may assume that to boost ad revenue, you must boost site traffic. This is true, however, this process can take a long time. If you are looking to raise the value of your website, a better way to increase ad revenue is through visitor segmentation. Visitor segmentation is the process of dividing your traffic based on user behavior to maximize the profit from each user that visits your site.
Visitor Segmentation: “By identifying and tracking user behavior, publishers can leverage technology to help optimize decision-making in order to improve user experiences and increase total user value.”
Publishers can use data to categorize different users visiting their site and evaluating how they react to ad sequences differently. Every user who visits your website takes different actions, so publishers should not be serving every user the same ad experience.
Pictured below is a great example of visitor segmentation; grouping new visitors and returning visitors. The image shown below shows us that through visitor segmentation, we can look at new and returning visitors and evaluate how metrics such as time spent on site and pageviews per session differentiate between the groups.
If your website analytics tell you that returning users visit three more pages per visit than a new visitor, you need to optimize the session revenue for returning users by showing them less ads for a higher EPMV (earnings per thousand visitors) on each page. Since we know that returning users will likely be visiting more pages, we need to spread out the number of ads these visitors see.
The first image gives an example of a website that used analytics to determine that most users who are visiting the website for the first time view 1.5 pages regardless of how many ads they are shown. With this information, we know that if the number of ads does not make a difference to the session duration of new users, they should show a higher number of ads to maximize revenue. What analytics also tells us, is that returning visitors will not behave the same to being shown a higher number of ads on a page as new visitors did.
The image above shows us what would happen if you did show the same number of ads to a returning user as you did to a new user. Returning users visit on average four pages per session. A publisher who is not using visitor segmentation is optimizing for RPM (revenue per thousand visitors.) This means, when a returning visitor comes to their website, and they see eight ads, they will likely bounce leaving you with the revenue from only that one page. If you were optimizing for session revenue through visitor segmentation, and you know returning visitors are more likely to visit four pages, a smart publisher will show them only four ads per page. Doing this makes you twice as much money from one website visitor.
Many publishers believe the best way to increase ad revenue is to cram as many ads onto a page as possible, no matter who is viewing that page, but this is not the case. Cramming excess ads onto your page will only encourage users to bounce quicker.
Publishers need to optimize revenue by strategically placing ads on their site in a way that will not disrupt a users experience, keep them on your site longer, and increase the probability of them navigating further into your site.
Another proven effective way to increase the value of your website through ad revenue is by testing ad placements on your site to ensure that your ads are strategically placed around each page to maximize the most profit. Many visitors only engage with the top half of a webpage, so it is more profitable to refrain from filling the bottom of your page with ads.
…However, you miss out on ad revenue if you don’t show the portion of visitors scrolling to bottom ads in those locations.
Ezoic is a really good tool for coordinating this automatically.
Increasing Ad Demand Sources
Many sites only use Google AdSense for monetization with ads; however you can utilize additional ad demand sources to boost the competition for your ad slots and drive up the prices.
Ad Demand = The provider of the display advertising on a page. This could be an ad network, ad exchange, or a direct advertiser.
There’s a lot of benefits to adding additional sources. For example, Google Ad Exchange (GoogleAdX) ads provides thousands of new demand sources that would increase the value and competition of your ad slots. Google AdX is only available to access through a Google Partner.
How do you increase ad earnings ethically on a website?
If you want to sell your website, you need to enhance ad earnings ethically, or your site will not be seen as valuable to buyers. The key to increasing ad revenue ethically is by diversifying your demand and through visitor segmentation, as discussed above. Boosting ad revenue ethically all stems from revenue per session, or in other words, total session earnings.
The biggest error publishers can make is to look at their ad revenue from a “per ad” or “per page” basis. When you are focusing your analytical evaluation on how much revenue your site is making per page, you are not taking into account overall earnings from each user’s session.
Optimizing on a per-ad or per-page basis will actually lead you in the wrong direction and in many cases can drive down overall earnings in the long run.
Let’s refer to an example used for increasing ad revenue per view. Imagine that you have a website about diamonds, and your top landing page is for an article about the most expensive diamonds ever sold. If this page makes you about $40 on average, and this is more than the other pages on your site, you probably think this page is how you are accruing the majority of your revenue and will want to optimize this page.
However, because you are not looking at revenue per session, you are not seeing that this same article also has one of the highest bounce rates on your site. So, although you are making $40 per visitor from this page, they are leaving your site immediately after visiting.
Meanwhile, you have a few articles with tips for buying diamond rings. Each of these pages only earns you $20 per page on average–half of what your top landing page is earning you. But if you look at your revenue by session, then you would know that users visiting one of these articles tend to view three pages on average during a single session on your site.
If you only optimized your highest-earning landing page, you would never even know that the pages that average 50% less earning are making you 50% more in revenue per session. This is why it is so important to optimize based on session revenue rather than page revenue.
Optimizing per ad will also hurt your overall earnings because it will actually drive down the price of other ads on the page, causing you to earn less overall. If you think it may be a good idea to jam a page full of ads to increase the total page RPM’s, don’t bother. Potential buyers will see the monthly revenue and realize the site is being pumped up without any real profit increases.
By focusing on EPMV and the aforementioned information, you will ethically increase ad earnings.
How long will it take to increase the ad earnings?
Many publishers who want to sell their website typically want to sell the site as soon as possible while also simultaneously increasing profit. To an extent, this is possible through visitor segmentation, as discussed earlier.
But, we all know that good things take time. Remember, you’re trying to sell your website. To sell your website at a profit that is satisfying, you may need to invest a couple of months into the process to prove growth is organically occurring and the buyer can see room for future growth.
(Greg here, I just wanted to add that if you are a couple of months out from seeing this increase in profit, you may want to schedule an exit planning call to see what else we can help you do during those months to increase your valuation.)
Increasing your ad earnings through ad rates, which is the actual value of the ad inventory on your website, can take about two or three months. This increase is a result of not cramming too many ads on your page and optimizing around session revenue and segmentation.
Advertisers will adjust their bid on your site based on engagement and historical information. The most important factor to remember here is that being patient will pay off in the long run. Advertisers greatly value publishers with good, credible history and your site will ultimately be more valuable.
How can you document and prove the earnings are sustainable?
In order to verify to buyers your site has a credible history, you will need documentation. If you do not currently collect or document site earnings, this will only add more time to the process of selling your website. It is important to be as transparent as possible with your data and give your buyers any information they request. Start your checklist by collecting these documentations:
- Google Analytics
It is a good idea to keep screenshot records of Google Analytics for your site to compare differences and growth over time. You can also show current Google Analytics data when in the final stages of the selling process. Google Analytics also allows you to prove that your site traffic is organic and never bot-traffic. - Exact metrics from any and all ad networks
Whether you are using Ezoic or another platform, you are likely earning revenue from many sources. This can seem confusing to buyers if you are not transparent. Show them your dashboard so they can clearly see where your money is coming from, assuring buyers there is no “mystery revenue” that doesn’t tie to a source. - Document the changes and actions taken to increase ad rates
This also goes for those experimenting to see if you can increase ad rates.When you want to sell your site, you cannot lead buyers to think that the only reason your site is profitable is because you know what you’re doing. A potential buyer needs to see that they, too, can continue to grow the site once it is in their hands. By documenting actions taken to increase ad rates, buyers can see that your revenue is truly ethical and it won’t come back to burn them in the long run. - Provide a map of “Most Valuable Content” so buyers know there’s room for growth
As we discussed earlier, you need to know which pages on your site are producing the most valuable visitors. From the diamond website example, we found that the most valuable users were visiting pages with less revenue but were visiting more pages per session, causing you to double your revenue. Your buyer needs to know what kind of content you are posting that increases visitor page-per-session and what kind of content produces the highest EPMV. It is important that they feel they understand this so they can continue to produce similar, successful content.
How do you prevent long-term ad rate damage on the website?
To prevent this from becoming a problem on your site, the best practice is to proactively avoid jamming as many ads on your site as possible. We have mentioned it a few times in this post, but we will say it again because the outcome of doing this seems enticing: short-term, identifying a page on your site with a high CPM and packing it full of ads will make you money fast, but the damage long-term is far more harmful than the perks of making a quick buck.
Jamming ads onto your site will damage your traffic and the value of your ads immensely. Doing this also devalues your site significantly to potential buyers. It will be clear to them you are in a rush to amplify ad revenue so you can sell your site for greater profit; buyers will not see any long-term value in your site but will view it as “burned out.”
Do ads detract from affiliate earnings?
Programmatic ads will not draw away from affiliate revenue. In many cases, publishers will have a handful of pages that are outstandingly successful with affiliate revenue, and that’s great. If you are worried about programmatic ads affecting your affiliate earnings, you have the ability to run a lighter ad treatment on those specific pages that go above and beyond with affiliate revenue. However, it is important to be careful that you are not doing this to too many pages because you could be missing out on a lot of revenue from programmatic ads that are being diluted.
Affiliate revenue is acquired by a publisher when a site visitor clicks a link shown to them by the publisher’s affiliate partner. Typically this link will navigate users to a landing page where they can purchase a product, and if they complete the purchase, then the affiliate publisher gains profit.
Something to keep in mind: having many forms of monetization on your site leads to the mitigation of one another, to an extent. You can always find a balance that works for you, but be careful not to overload your site with affiliate links and display ads because this can decrease the value of your page overall.
Can the site continue to increase earnings after these optimizations?
Absolutely. If you are practicing everything we have talked about in this article, all you need to focus on to further increase site earnings is content creation. With Ezoic’s Big Data Analytics feature, you are able to look at which pages on your website produce the most ad earnings and popular traffic trends on your site. Ezoic can also tell you which authors are writing the best-performing content on your site. This feature is particularly impactful to website owners with dedicated writers on staff, or are a dedicated writer themselves.
By assessing this information, you will be able to recognize patterns between your most successful landing pages.This will help you construct a foundation for successful content creation and give insight into which topics and structure drive the most traffic to your site.
Summary: How To Increase The Sale Price of a Website Through Ad Revenue
- Use testing and visitor segmentation to optimize ad earnings by providing unique ad experiences to every user who visits your site.
- Test the layout and placement of ads on your website to ensure they are strategically placed for maximum profit.
- Use Ad Mediation for comparison and competition of ad networks in your inventory and boost bid pricing.
- Ensure you are increasing ad revenue ethically by optimizing on a per-session basis and never per-ad or per-page.
- Be patient with ad earning growth and collect and present historical data to buyers.
- Document all actions taken to increase ad earnings over time to present ethical growth in revenue.
- Never jam your site full of ads to get short-term revenue quickly because it drives down traffic and devalues your site to buyers.
- Use an ad management platform like Ezoic that uses Big Data Analytics to tell you which landing pages and authors on your site produce the highest ad earnings.
Whether you are a publisher or website owner who wants to increase the value of your website through monetizatization, or you genuinely want to know everything that goes into making a website valuable, Ezoic’s blog features hacks for content creation, website infrastructure, SEO, ad earning, and more.
