This week we’ve heard from blog sellers, and blog buyers. Whether or not you’ve been inspired by what they’ve had to say, I’ll bet that the conversation has raised one key question in your mind:
What is my blog worth?
Image courtesy stock.xchng user ba1969
These days, we’re seeing blogs being recognised as valuable business tools, both for business-to-business as well as business-to-consumer connections. So if you own and run a blog, it makes sense to understand its value.
Today’s challenge is to do just that.
If you’ve been following along this week, you’ll already have a few of the key metrics for a blog valuation in mind:
the age
of your
bloguniqueness and quality
of blog designtraffic levels, sources, and qualityvisitor stats: bounce rates, time on site, conversions, and so oncurrent monetization approaches and levelsassociated social media footprint.
Andrew Knibbe of Flippa recommended that we use the marketplace as a yardstick by which to value a blog, but what other factors should we take into account before we start doing research there? Let’s step through the process of getting a rough idea of your blog’s value.
First, make note of these vital stats for your blog. You could do this on paper, but I recommend a spreadsheet, because that’ll make it a bit easier when it comes to comparing your site to others down the track.
Blog age: Andrew from
Flippa mentioned earlier in the week that older
blogs tend to be given higher valuations.
Domain: If
you’re selling the domain with
your
blog, a shorter or more memorable domain is probably likely to be looked on more favourably than a longer domain, or one that contains hyphens, for example.
Platform: The platform on which
your
blog is hosted might not in itself raise or lower
your
blog’s value, but it might impact the types
of buyers who’d be interested in it.
Theme: If
you’re on a WordPress
blog, paid or unique themes are more likely to attract more serious buyers.
Alexa rank: We saw earlier in the week that Alexa rank also contributes to a
blog’s value, so if
you don’t know where
yours sits at the moment, find out.
By this point, you should be off to a good start.
Next, it’s time to open up your Analytics tool and take a critical look at your blog stats not just for the last month, but over the last few months.
Monthly traffic: Note down the total traffic levels first.
Traffic sources: Next, allocate portions
of traffic to the relevant sources
of those visits.
Landing pages: Look at
your key landing pages. Shahzad mentioned yesterday that some
of the most popular landing pages on the
blog he was buying were
off-topic
posts. How relevant are
your main landing pages to
your
blog’s brand and niche?
Bounce rates: It’s important to look at this data over time, and to work out which traffic sources have lower or higher bounce rates. This can help
you get an idea
of the overall value
of your
blog’s traffic.
Time on site: This is a good measure
of engagement and, again, it’s worth looking at the average time on site for each different traffic source, to see which visitors are more engaged.
This information should help you get a feel for the value of the traffic your blog attracts, and the content you’ve developed. It might also help you identify places where there’s room for improvement, but for now, let’s keep going with our valuation.
If you’ve monetized your blog somehow, you can be sure that potential buyers will be interested to know how you’ve done it, and how successful you’ve been. Let’s pull together the data—if you don’t already have it at your fingertips.
Monthly revenue: Add up
your revenues for the last three months and divide by three to get a monthly average.
Monetization sources: Make a note
of the ways
you monetize
your
blog. Have
you created unique products from scratch? Do
you use certain advertising or affiliate networks?
Conversion rates: Look at
your conversion figures for the last three months, and compare them with
your last three months’ traffic to calculate
your average conversion rate.
Value per visitor: Take
your average revenue figure for the last three months and divide it by
your average traffic figure for that time period. This will give
you an average visitor value, which will be really helpful in assessing
your site against others for sale in
your niche.
Profit: You might not be able to calculate this figure until
you complete the next section, but do be sure to subtract
your costs from
your revenue figure to get a pr
ofit figure. Again, this will make for easy com
parison between
your
blog and others. If it’s good, it could also go a long way to tempt po
tential buyers.
Note that at this point, you can calculate a valuation based on a multiple of your revenue—either 12 or 24 months, say. This will give you a good reference point for the research we’ll do on Flippa in a moment.
Whether or not you’ve monetized your blog, potential buyers will want to know how much it costs to run, so they can compare it with other blogs they might be considering buying. Make note of the costs you pay for:
Hosting: Note monthly or annual figures.
Design and development: Unless
you have regular maintenance charges,
you might want to add up what
you spent on
your
blog’s design and development in the last year as a more objective figure than
your expenditure for the last three months.
Content: Do
you pay writers? Buy con
tent? Add up those costs—along with
your own time cost for writing and editing
your
blog’s con
tent.
Marketing and customer acquisition: If
you spend money on advertising—or time on guest-
posting and con
tent marketing—again, add up those costs for the last three months.
Time: Don’t forget to tally
your time for other
blogging tasks, like social media, affiliate and ad management, and so on. Try to get a clear and honest picture
of how much time it takes
you to run
your
blog on a monthly basis.
This basic information shouldn’t take you too long to collate. And once you have, the real challenge begins! Try to find at least two other blogs for sale in your niche to compare yours with.
Go to Flippa.com. You can,
of course,
search for sites for sale in
your niche on
Google too. That can be a good way to find out what’s for sale, but as those sites may not give
you an indication
of how much they’re hoping to sell for, a visit to
Flippa for re
search is a good idea.
Find sites for sale and auction in your niche or a similar niche. I’d recommend
you look at finished sales, since that’ll give
you the figure the sites sold for, rather than just their current bid price, or Buy It Now price. Recent sales will give
you the best indication
of what the market is actually willing to pay for a
blog like
yours.
Assess the sites. Go through the checklist above again for each
of the sites
you’re looking at. Make a note
of the prices they sold for. See if
you can spot any trends that can indicate what the market values in
blogs within
your niche, and think about how
your
blog stacks up on these points.
Settle on a price range in which you think your blog might sit. Rather than picking a single figure that
you think
you’d accept for
your
blog, I think it’s probably a better idea to use
your re
search to work out a range in which that price might reasonably fall.
You’ll have a figure
you wouldn’t sell below, and a range in which
you can set
your expectations.
Compare the range with your multiple-of-revenue price. If
you calculated a multiple-
of-revenue price above, compare it with the price range
you’ve arrived at to see if the figures are in the same ball park.
By the end of this challenge, you should have a rough valuation on your blog. If you’re game, share it with us in the comments below. Or, if you’d rather, you can just let me know if you were surprised—or disappointed, or inspired!—by the price range you arrived at.
View the original article here
Image by SebastianDooris, licensed under Creative Commons