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4. A 10-Step Due Diligence Guide for Purchasing a Content Business

A 10-Step Due Diligence Guide for Purchasing a Content Business

When I started acquiring content websites as the Head of Mergers and Acquisitions at yellowHEAD, one of the biggest challenges I faced was the lack of online resources on how to run a due diligence audit. Heck, I could barely find any related resources on how to even buy a website.
This required us to build our own SOPs through every step of the site acquisitions funnel: from prospecting deal flow to performing high-level due diligence processes and finally creating a tangible strategy to grow the websites.
In this article, I’m going to take you step-by-step through the due diligence process we have used to vet hundreds of content websites over the past three years.

So What do We Look for in a Content Website?

1. Level of Copy

One way I like to look at a content website is that I’m basically indirectly selling a product, and that product is information. The better my content is, the more likely my content is going to make it through future Google updates. Plus the added benefit is that if my content is actually useful it’s going to convert much better. Content should be tailored to the user, not the search engine bot. Over-optimized SEO websites are more vulnerable to future Google updates, the simple reason being that the content is focused around the bot instead of the user.

How to Review the Level of Copy

Have a look at the site’s top 10–15 pages. Review the overall level of copy and make sure it fits the target audience (US, UK, etc.). Make sure the content seems like it was written for humans rather than being repetitive or stuffed with keywords.

2. Backlink Profile

Based on my experience in SEO over the past years, I would say the two biggest organic growth engines are content and links. We covered what to look for in terms of content, so now let’s focus on links.

Ideally, we look for websites with a low ratio of exact match anchor text for their key pages. If you’re wondering what a natural backlink profile looks like, let’s have a look at empireflippers.com:

*Credit: Ahref.com

How to Review the Backlink Profile

Use a tool like Ahref to review the quality of the referring domains and the anchor text distribution across the whole backlink profile.
A good backlink profile is one with a low ratio of exact match anchor text to its “money pages” and with contextual relevant links from other quality sites within the same niche. Basically, a good backlink is one that is relevant and fits well within the context of an article.

3. Speed and Performance

Since July 2018, page speed has been a verified Google ranking factor. A slow website means you’ll need to invest additional development resources to optimize your page speed score, which would lead to additional costs for the project.

How to Review the Website Speed Performance

Run the site’s URL through the following tools:

• PageSpeed Insights
• Pingdom Tools
• GTmetrix

Review the list of action items from each report and run it by your development team, or confer with a consultant regarding the current status of the site speed and the amount of work required to optimize it for better scores.

4. Niche, Evergreen OR Trendy

I prefer looking at sites that operate within an evergreen niche. The reason for this is that an evergreen niche (pet food, for example) will likely remain stable or increase in the amount of online searches in the next 3–5 years. This may change based on your business model. If your business model is more about flipping sites, there are advantages to picking a trendy niche at the right moment if you’re planning on flipping the website again within 6—12 months.

How to Review Whether a Niche is Evergreen or Trendy

I like to use Google Trends. It’s an awesome tool developed by Google to help you understand how a certain search term is trending.

*An example of a positive search trend in an evergreen niche

*An example of a trendy niche after its prime

5. Level of Competition

It’s vital to understand the level of competition you’ll face, as it may significantly impact your expenses for content, links, and website development. Usually the smaller the niche, the less competitive the SERP space is. However, this is not always the case.
Over the past years we’ve seen many high profile publishers, including NYMag, Business Insider, and many others, transition to the affiliate marketing space as a way to diversify their revenue streams.

How to Review the Level of Competition

First, use a tool like Ahref or SEMrush to map out the top 10–15 search terms the site is ranking for. Run a manual search on Google for each search term and see the types of websites that pop up.

Ideally, you want to see more niche-specific sites and less big publishers in the top search results.

Let’s look at a couple of examples:

*”best cat scratching post” — Business Insider ranks as the #1 result, and all top three results have a backlink of at least 2,500 referring domains

*”best road bikes under 1000” — The top three results are niche specific

6. Traffic Scalability

What’s the best case scenario you think you can achieve in terms of organic growth? The basic component here is the amount of content you need to publish or optimize to generate new traffic. Does the site have new content areas you can add? Or maybe it’s ranking on the second page of search results for a large amount of keywords, and so all you have to do is optimize them to get to the first page.

How to Review Traffic Scalability

Use a tool like SEMrush to map out new content areas with good SEO potential. I prefer using SEMrush Keyword Magic to find relevant keywords.

To review current SERP status, you can use SEMrush’s organic search feature filtered to Pos: #11–20

7. Monetization Opportunities

Monetization is a big part of your growth strategy. Being able to make more revenue with the same numbers of users is huge for any online business and especially in the digital acquisitions space, as you can see an immediate increase in evaluation by making a few simple adjustments.

How to Review Monetization Opportunities

Here’s a few things to look at when buying a content site:

1. Current ad display networks — Some networks do much better than others. Review the current setup and check against other available ad management solutions.
2. A/B testing — 90% of the sites listed have never been A/B tested for product selection, page layout placements, or text/color variants on call-to-action buttons for affiliate links. If a business that you are performing due diligence on hasn’t done any A/B testing, chances are you’ll be able to optimize the current set up.

8. Traffic Trends

Some of the best deals we’ve made were simply acquiring websites at the right moment. Implementing SEO changes and CRO changes take a while to kick into high gear to the point that you actually see real growth.

So why not just buy a website that’s already doing well?

Ideally, you’re looking for a website with steady upward trends over the last 6–12 months. Be careful of sites showing a high velocity of growth, especially those that are under 16 months old. Usually what goes up fast might come down just as quickly.

Here’s an example of the traffic growth trend for a site within this range mentioned above:

How to Review Traffic Trends

Cross-check organic traffic data from Google Analytics, Google Search Console, and external tools such as SEMrush or Ahrefs.

9. Design & UX

The look and feel of the site plays a big part in how users interact with it. If the site is using a free WordPress theme from five years ago, odds are it’s falling behind the competition. Updating or redesigning the site will require more time and effort from your team as well as additional costs in your overall growth budget.

How to Review Design & UX

Perform a manual review of the site’s look and feel, on top of checking how up-to-date the blog and theme are. A few things I look at include:

• Does the site have a unique brand name and logo?
• Is it easy to navigate through the site?
• Does the site use free or paid stock images?

10. Technical SEO Site Status

Based on my experience managing dozens of content sites over the past couple of years, I can confidently say that I see technical SEO as a major issue. Most sites I’ve managed that suddenly decreased in traffic usually had plenty of on-site problems that negatively affected how Google crawls our sites. This is something that can heavily affect the resources required to optimize the site

How to Review Technical SEO Site Status

Perform a technical SEO site audit to map out current issues that might be holding the site back, such as the number of 404 pages and 301/302 redirects. Check whether all of the pages have been migrated correctly for HTTPS protocols, etc.

Overview: Content Website DD Checklist, Rated From 1–10

1. Level of Copy — Checked by a native English speaker.
2. Backlink Profile Score — According to DR, degree of exact anchor text match, use of PBNs and the overall impression from the account manager.
3. Speed and Performance — Per Google page speed test.
4. Niche — According to evergreen or trend status, competition level, and type of audience.
5. Level of Competition — How competitive is the SERP? Are the top ranking sites authorities or niche websites?
6. Traffic Scalability — According to the amount of content you can add and keywords ranked from positions 11–20.
7. Monetization Opportunities — Can you improve CPA or add new monetizations to the site?
8. Traffic Trends — Review site traffic and rankings over the past 18 months.
9. Design & UX — The overall look and feel of the site.
10. Technical Crawl Status — SSL, sitemap, robots.txt, the amount of 404 and 301 pages, etc.