Owning a content website is (aka blog) can be a great way to make passive income and high cashflow. The plus side to a content website that attracts many is entrepreneurs without capital is that they are easy to start and can be done with little to know capital. The reality many find is that actually getting them to take off is a bit trickier. It can take years of consistent work without seeing any result or proof of concept. For that reason, I recommend buying a content website. There are many of them that come up for sale producing high cashflow in a 36-48x monthly multiple.
Content website owners can even relocate to Puerto Rico and take advantage of the very low 4% tax rate benefit.
The allure of a content website and damn near passive income is not without risk though. In this post I’ll elaborate on the 2 biggest risks content websites face and provide ways to minimize the risk.
What Is A content Website
Let’s make sure we’re all on the same page. Content websites are more informally referred to as blogs. They primarily publish content to satisfy internet user search intent which subsequently captures traffic from search engines. The traffic can then be monetized by the website owner.
High level content websites often follow specific method of keyword research and publish content to specific to that search query.
The traffic to the site is usually monetized through affiliate marketing links (related affiliate marketing vs dropshipping) and/or display ads.
The Risks of Content Websites
There are two major risks to the content website business model.
First there are Google algorithm updates. Nearly all content websites are dependant on traffic from Google search. The Google algo is estimated to update 500-600 times per year. The broad focus of update is to further mission of Google search to deliver the best and most relative content to the searcher. Reading between the lines, this tells all content website operators that they need to focus on user experience. BUT Google doesn’t always get it right. You can truly publish the best content for users, and get whacked down lower in search rankings with the next updates resulting in traffic and revenue loss.
Second is revenue concentration. Most websites earn nearly all of their revenue from one particular affiliate program, like Amazon associates or one particular display network like Mediavine. This puts your at their mercy. For example in Mid 2020 Amazon cut their affiliate commission rates by 50-80% for most categories. Could you imagine buying a site in January 2020 valued on monthly earning of $10,000/m only to drop to $3,000/m when Amazon cuts commissions. Ouch!
While their are other affiliate programs, none convert nearly as well as Amazon. And likewise while there are other display networks, they each tend to be category specific for top pay.
Google Algorithm Updates
Now let’s address how we can mitigate the risk of Google Algo updates.
1. Create Video Content. Build an audience on youtube. This provides a traffic and (and also revenue) source aside from pure Google search that tends to be more robust. Content on Youtube also gets indexed and discovered more quickly.
2. Build Social Media Following. Many content websites have social media accounts with some minimal effort put into and no real engagement. Make the effort to build a following that is engaging on Social media. It is hard to justify because the growth takes a long time and is hard to translate back to sales, but it holds your audience should Google whack you down in search.
3. Build Email List. An email list gives you a direct line of communication with your audience. Open rates may be low but building the email list from your organic traffic with a lead magnet adds another buffer against Google algo updates.
Ultimately, the ‘big picture method’ of mitigating Google algo risk is creating a multi channel content brand. You want to build a brand that exists without relying on people randomly finding it on Google!
Revenue Concentration
Now let’s talk about how we can diversify the revenue of a content website.
4. Proactively Seek Advertisers. Identify businesses that could benefit from reaching your audience and pitch them. Yes this takes work but it opens you up to much higher paying deals. You could do directly sponsored content or ‘private’ affiliate deals. These workout well with ecommerce brands that are well established, and in demand, but do not sell on Amazon.
5. Create Digital Products. This is my favorite! Create a digital product that benefits your audience. It could be a course, an ebook, an audio book, a planning template, a private community. The great thing about digital products is that your cost of goods is essentially $0 so all your revenue is pure profit, even if you’re selling at a low price point!
Great example site I’ve observed is safetytalkideas.com. They sell printable note sheets for safety meetings.
6. Sell White Label Products. You can add a small ecommerce store to your blog using products that are created under your own brand and dropshipped from supplier to consumer.
Great example site I’ve found doing this is swimuniversity. They sell a few pool maintenance related chemical products – all white labeled.
Going Forward
Owning websites can be lucrative and easy but it comes with looming risk. If you’re planning to acquire a content website, know that you likely will not find one that is insulated from the risks outlined in this article. Instead, use these ideas to plan out how you will mitigate these risks and add value to the content site.