Can You Supersize Your AdSense Earnings Through Website Acquisition?
Imagine this: While a website owner is out spending time with his family, watching a movie, or traveling the world, his site has money rolling in day in and day out, week after week, month after month.
A website starts picking up thousands of visitors a month. A virtual assistant and a writer cobble together new articles weekly, while a graphic designer makes each piece of content a mini work of art — all pretty much on autopilot.
This is a common dream that people have when it comes to the world of online business.
While it is achievable, it is often a lot harder (and takes more work!) than most realize. Yet, if you want a fairly hands-off website that really does earn money like this, there are few monetization strategies more passive than Google Adsense.
After all, AdSense is one of the easiest ways to start earning money online. All you need is the content, and Google will use its intelligence to create ads that match your audience’s interests and ensure they click on ads.
There is a problem, though, and it’s the same problem every would-be AdSense-earner faces.
Building websites are time-consuming!
You have to buy the domain name, the web hosting, and — even if it’s on WordPress or another similar site — you have to set up the website. Then there’s finding the right themes and plugins and setting the website up to be SEO optimized. That’s before you even start posting content.
Often, the time it takes to build out a website yields a very poor Return on Investment (ROI) for the time spent. And we haven’t even begun talking about keyword research and what a hurdle that is, especially for people new to the AdSense niche site game.
Keyword research is the most important skill when it comes to building out a real authority niche site. Without good keyword research, your website could chug along for months and months without ever earning anything.
Good keyword research takes time, skill, and honestly, some luck. You will never know with 100% certainty that the keywords you’ve chosen are going to rank.
If you do start to rank, it might take you months to figure out the best place to put your AdSense ads.
Optimizing these is extremely important, but without significant traffic (early on, your site will just be beginning to rank), it can be difficult to find out where the best placement is for the most money.
Even with a trickle of traffic coming in, you might just earn nothing. Maybe your niche just happens to be one of the unlucky niches that doesn’t actually convert search traffic into AdSense clicks.
After all that painstaking and tedious work, you might still end up with nothing.
But what would happen if you could take all that guesswork out? What if there was a way to make a profit with AdSense sites without even needing to wait for them to rank?
Well, there is.
Building vs. Buying Websites
It is tedious to get a website off the ground and running. So what if you could buy websites that are already producing AdSense revenue on a monthly basis?
If you don’t know much about Google AdSense and display advertising in general, make sure to check out the video we did on the subject here:
The beauty of buying this kind of website is that it is already profitable. The niche has proven itself and the site has gone through the arduous guesswork phase already.
Consistent monthly revenue means you are likely getting enough traffic to properly split test the website and bump the revenue up significantly. Some buyers find they are able to purchase an AdSense site and, within a month or two, double its monthly net profits just by doing a few simple tests using software tools like AmpedSense.
You might be wondering, is buying a website actually better than building one?
So in a 10-month period, their total net income is sitting at $19,850 dollars. Based on their 3-month average of $4,333 in net profit, they might get a valuation of $99,659 (23x multiple of net earnings — the multiple is always a multiplication of the website’s net profit to determine the sales price), but this is only if everything is going right.
Who wouldn’t want an extra $20k sitting in their bank account, with the option to sell a site for close to six figures?
But the real question is, how much time did this person spend on producing this kind of income, and would his time have been better spent elsewhere?
At three hours a day, five days a week, for 10 months, this person spent 600 hours total on this niche website. It is not a bad hourly wage, all things considered — sitting right at $33 per hour if they didn’t sell the website, and $199.18 per hour if they did sell the site.
Case Study B: The Website Buyer
A person that comes in and buys an AdSense website already producing $5k a month is going to be looking to spend right around $115,000, at a 23 times multiple. They are going to lay out the cash to take the guesswork out of the niche site process that builders have to deal with.
The buyer is acquiring a website that has an older domain than that of a brand new site, so the fresh content they create will rank more quickly than on a site they’ve just launched. Google loves domains that have aged since it shows that they are more “legitimate” in their algorithm, and are likely providing more value to the people who visit the site than other, newer sites.
Now, the new buyer is likely going to optimize their new website purchase. Here are some of the things buyers might do to improve the site over a 10-month period:
- Use split-testing software to find out where their AdSense ads convert best.
- Change up the meta tags to create headlines that achieve higher click-through rates. One of the factors of ranking in Google is people actually clicking your links. This means that the headlines — or the meta headlines that show up in Google, at least — are very important. Good headlines can actually increase your rankings without any kind of traditional SEO being applied. Good headlines simply entice people to click on the link.
- Use SEMRush to find out what is ranking close to page one or rank one and add content around those keywords to push the ranking up further. (This is one of the things we talk about in more depth in our post, “The 80/20 Rule of Optimizing AdSense and Amazon Websites.”)
- Add more content for more keywords to get new rankings and more traffic.
Let’s say this website buyer spends the same amount of time with their purchased website that the website builder spent with theirs: three hours a day, five days a week, over the course of 10 months.
The website buyer’s income might look like this:
As you can see, the buyer was able to increase the income pretty significantly during this time. The reasoning is that they are able to split test their ads and also use a few other low-hanging optimization strategies right out of the gate, with a website that is already getting traffic and converting that traffic into cash. They basically build onto the 10 months of work that the original site builder put in previously.
Of course, they are also adding new content, and that is reflected in the growth of their income as the months go by — they often rank faster than if they’d started a brand new website because they benefit from the domain authority.
Over a 10-month period, the website buyer has earned $78,500 dollars. Technically, the website buyer has not earned a real income yet, as he must deduct his earnings from the original investment he made to get his hands on the site in the first place.
Buying the website at $115,000 and subtracting the profit over the last 10 months still leaves the website buyer $36,500 in the red. Here is the magic, though: in just three to four more months, this buyer will be completely in the clear if they choose to keep the site.
Or, they could turn around and sell the website they bought 10 months ago for a six-figure profit.
For a website like this — using the same 23 multiple of average monthly earnings — we can expect a sale price right around $226,166 (with a three-month average net profit of $9,833 used for the multiple). That leaves the buyer $189,666 in the black.
Remember, they worked 600 hours just like the person who built their own website. This means they earned an hourly wage of $316.11.
Which Would You Choose?
The website buyer made 158% more money working the same hours as the website builder did.
Now that they have grown and optimized one website, the website buyer could take that whopping $189,666 and buy several smaller AdSense sites, or funnel it all into an even bigger AdSense site, which they could work on and optimize.
Whatever they do, they now have over six figures in cash flow to invest in their next venture.
As you can see, the math here works in favor of the buyer. This is not always the case, but — with our experience brokering hundreds of online business sales — the process almost always tends to favor the buyer.
At the end of the day, if you have some cash to invest, it is easier to take a profitable website that has already proven itself and make it even more profitable, than it is to start a website from scratch.
The money you earn from selling these assets can be a huge influx of capital with which to build even more websites. Alternatively, a site owner could simply keep their site for another year, pay off their investment in just a few more months, and sit back to enjoy their website’s $120k per year in profits.
When you have a successful business on your hands it becomes easier to grow a team and create a hands-off business. This idea of “passive income” is what many people dream of.
How Do You Purchase a Website?
We get it.
After seeing numbers like that, you are probably pretty excited about purchasing a website. But you’re also wondering how you can go about doing it.
First, you need to know how websites are valued.
Typically at the base level, a website’s value is calculated using an average of its net monthly income. Often this is a three-month average, but some sites (especially those that respond to seasonal traffic) use larger averages over periods of up to 12 months to find the site’s real value. A valuation is usually a multiple in the 20-40x range of the net monthly income.
Once you know the prices to look for, you can start shopping around using a marketplace like ours or other brokers’ listings.
The next thing is understanding how vetting a website works. You want to do your research in an intelligent, methodical way to make sure the website you are buying is going to be a stable earner.
One of the biggest mistakes a buyer can make is blindly trusting screenshots. We live in an age where software tools like Photoshop make doctoring screenshots very, very easy.
A good vetting process involves actually logging into the seller’s Analytics and AdSense accounts to verify that they really are earning the money they say they are and getting the traffic they are promoting. If you go through a reputable broker or agent, they should do this for you. While the information can still be manipulated, it is very difficult to do so, and looking at it will give you the ability to confidently say yes or no to a deal.
Let’s say you’ve vetted a website, and the price is within the 20-40x range. That does not always mean this is going to be a surefire deal for you.
After those two crucial tasks are taken care of, you need to see if there are ways to improve the website.
If you want to grow a purchased website to new income plateaus, look for the low-hanging fruit that you can easily add to the site in order to optimize its earnings (i.e., doing the things mentioned above such as split testing, editing content to showcase more keywords, adding more content, etc.).
These easy wins for cash flow can increase your monthly revenue considerably.
Now For The Don’t-Try-This-At-Home Part
Once you’ve considered all these factors, you enter the negotiation, transfer, and migration processes.
When a buyer or a seller is negotiating on their own, their emotions are more likely to get in the way and cause problems rather than solutions. For instance, a seller might overprice a website, because it is his first one, and he has attached an emotional value to it that exists only for him.
That’s not what we’re going for here.
A broker handles this process the most effectively, as they represent both the buyer and the seller. They have seen hundreds of deals, they understand deal structures, and they are a trusted authority that both the buyer and the seller can look to, which ultimately helps with negotiations.
They make sure that the transfer of the actual business and website goes smoothly. If you are sending over $100,000+ as payment for an AdSense business, you want to make sure you are getting what you are expecting. A broker can help with this by holding onto the funds until the website is fully transferred and ensuring the site is earning before the broker will release the funds to the seller.
A good broker will also be involved in the migration process of your site. This means they will help the seller to push the website to your hosting server, set up any affiliate website links or AdSense codes that need to be swapped over, and help verify that everything is in proper order before releasing the funds.
This is an important step. If you choose not to use a broker, you want to absolutely make sure these safety nets are in place.
How To Spot a Good Broker
The fact is, some brokers just suck. They’re unresponsive, they might not take care of you, and if they do sell your website it could be a long, drawn-out, and painful process.
This is certainly not true of all brokers, of course. Some brokers are attentive. They understand how to market your business effectively, and they get the job done. Let’s talk about how to spot a good broker.
A good broker is going to have a vetted marketplace. While their marketplace might be private, they will have a process in place that every listing must go through in order to verify their earnings.
Again, be careful of a broker who is trusting a seller based purely on screenshots. It’s easy enough to log into most monetization accounts to verify earnings, so there is no excuse for relying purely on screenshots.
Also, the broker works on both sides of the deal. They are both a mediator of disputes and the negotiator for both sides. Because they represent both sides, they are going to look for the best way to create a win-win situation. At the end of the day, everyone should be walking away from the table happy with the decisions they have made. Sometimes, this means compromises have to be made on either the seller’s or buyer’s side, which can happen during the negotiation process.
One of the biggest things that a broker facilitates for a buyer is actually finding decent websites.
Since the broker has a curated list of vetted websites, it can be as easy as shooting an email over to that broker asking for AdSense sites that fit your general criteria. While you might not get a website in a specific niche, you can find websites that have certain traits (i.e., that earn X amount per month, have X volume in traffic per month, etc).
Talk about massive time savings.
Don’t get bogged down in technicalities that can (and should) easily be taken care of by a business broker.
To recap, finding a solid broker is as easy as:
- Confirming their vetting process for listings — are they looking at the actual accounts, or just relying on seller screenshots that can be easily manipulated?
- Asking yourself, do they always represent BOTH the buyer and the seller in negotiations? Are there case studies available, or are they willing to let you talk to a prior buyer or seller to ask their experience?
- Checking whether they will assist in the transfer and migration process after the sale is complete. Instead of spending all your precious time here, let the pros handle it.
If a broker isn’t willing to disclose this information or seems like they aren’t going to work on your behalf, throw a red flag at them and run for the hills! It isn’t worth it.
The Fast Track to AdSense Earnings
Building out an AdSense website from scratch can lead to the development of a whole new set of skills. If you are brand new to this whole making-money-online thing and don’t have a lot of capital to invest in your new career, then I would recommend going down that path.
If you have capital, the better route for you would be to purchase websites that are already earning money, so you can focus on the optimization process. Even if you are brand new and have capital, this is often the more advantageous route, especially when it comes to ranking new keyword-rich content. This is because the domain you have will be an aged domain, and therefore more likely to rank since it is already ranking for so many different terms.
After all, building out new sites takes a lot of time. When you calculate how much time you spend on the site versus what you are actually earning from the site, it can often translate to a very low hourly wage.
Sites earning money can become more profitable more easily because you are able to take so much of the guesswork (time) out of the equation for yourself. With these types of sites, you can just focus on the revenue optimization portion of the business, and you can still create more traffic with niche-specific content.
If you increase the revenue significantly, you can often turn around and sell the site for double what you paid for it. You then have the option to take this capital and invest it in two more sites, or one really big website that you focus all your energy on.
Simply rinse and repeat until you have a huge portfolio of profit-producing, Adsense websites.
You could build a business from scratch — or you could choose the quick route by buying one, purchasing a turnkey site eliminates the guesswork and significantly decreases the amount of time you need to spend on the website.
Have you ever bought a website? Have you ever thought about buying one?
If you are curious about working with a brokerage or seeing what they might have available, you can check out the Empire Flippers marketplace here to get an idea. And, of course, if you have any questions, please leave a comment below this post!
This was a cool article that I enjoyed reading. I don’t have enough money to buy a site that is already made so I learned how to make niche websites on my own and I’m really having a blast at it so far.
I think that this article did not focus on the negatives of buying a site instead of building one yourself. One that I can think of right off the bat is the showmanship. I love being able to say “I made that from scratch”. I love describing and sharing everything I did to make a website work, from building the site, to searching for wholesalers and dropshippers, or even the story behind a featured testimonial.
When you buy a site, you don’t have that history. It’s not necessarily a bad thing… like the article says, you don’t have to go through those initial trial and error periods. But for some people, that’s the real fun, and the money feels awesome coming in because you really worked hard for it and started it up from nothing.
I have been following this site for about 6 months. I think one day when I have money to spare, I will buy a site and dig into it just for the experience. But I also think that I will continue to build sites in niche markets because I love buying domains, coming up with my own ideas, and building on my own.
It always feels good when you build something that starts bringing the money. I’m glad our blog has been really useful for you, and keep focused on building out your sites. The skills you learn from building one from scratch can help translate into purchasing websites and really ramping up the ROI like this article is talking about.
The same feeling of pride you get from building a website from scratch though, can also be applied to buying a website.
For instance, one of our buyers was able to find a site that had dozens of articles on the site that the previous owner had not linked anywhere on the site, no one could find the articles. So he bought the business, did the on page SEO, and instantly grew the website’s revenue overnight.
He wouldn’t had been able to do this of course without having a solid set of skills from building his own sites – but I’m sure he felt quite proud of his accomplishment 🙂
Could you, or EF staff point into some of these good articles for those who would tend to get started on that?
I would really like to experiment on this, and I might come back and post an article about the results 🙂
As much as I love the math, this example wouldn’t really fit.
First of all, the main difference here is cash, while someone might have the cash some people wont and then decide to start the business from scratch.
Maybe if we can add an example with a site purchase for a low earning site that’s intended to make $5K after a period of time?
Let’s say (for example) the buyer decides to buy a site that’s making $2K/mo because that’s on his/her budget, without a math, let’s say they’ll save like 5 months to reach the $5/mo cap of the initial 10 months illustration. I think an illustration like that would showcase the benefits on time saving of buying against creating sites from scratch.
Not that this example is wrong, but honestly we’re comparing two completely different scenarios for two different buyers.
Hey Rafael – thanks for the comment!
You’re right, of course. There are more than 2 ways to “skin the cat”, so to speak.
We used these two examples (Starting from scratch and spending $100K+) to really highlight the differences, but you can start with $20K, $50K, $500K, etc.
It really depends on the individual and their Time Vs. Cash scenario. No cash but plenty of time? They’ll be starting from scratch.
With cash, though, you have more options. (Hell, even with less cash there are interesting finance options that can come into play. Hopefully, we’ll have more about that later in another post)
Would love to read that later post! 🙂
It’ll be an interesting read, however, based on previous experiences, when it comes to financing is like domain leasing: at the end it’ll mostly benefit the seller.
At least this is what happens when you use options like lendvo or add an earn-out option.
Btw, I’m not sure if its right to ask here, but do you guys happen to workout cash deals only or do you also happen to workout financing (at least partially) options?
While I don’t have any experience with Lendvo, I would say earn outs options can be a very good option for a seller.
An earn out option is basically the seller financing the deal at the end of the day for the buyer. If the buyer receives a large upfront downpayment of 75% or more, then it could be worthwhile for the seller to do an earn out for the remaining 25%.
This becomes more true as the value of the website goes up.
For instance a $10,000 site that gets a $7,500 downpayment and an earn out of $2,500 over a 5 month period, probably wouldn’t be a good idea.
A site that is $550,000 dollars and gets an upfront payment of $430,000 with a 4-month earn out from there, would be worth it. This seller-based financing is often what will allow a deal to happen to break a deal.
As far as financing goes, earn outs are the mainstay with our brokerage currently. Though always open to hearing about new solutions for bigger online businesses.
Are earn-outs usually 0% financing? I’m talking about buyer financing. Curious about how this would impact the way we do business, mostly because acquiring financing deals end up suffocating the buyer with a snowball of debt that just reduces cashflow.