It’s a question almost every site owner asks at some point: how much is my website worth? You may be thinking about selling your site or just curious about the value of your online business. The valuation is a combination of your monthly revenue and monetization efforts, website real estate and traffic, and how the search algorithm perceives your site. You can get an idea of your earning potential by checking your website with our free website earning calculator.
In this article, we’ll also detail the key factors that impact value and strategies to improve your website’s value.
Factors That Impact a Website’s Value
Several key factors will impact your website’s value, including the industry and business model you’re using. If you’re running an online business that sells products or services, for example, your value will be based mostly on your monthly profit. If you sell subscriptions, the value will be based more on your monthly recurring revenue (MMR). For websites that rely on advertising revenue for monetization, values are influenced by monthly ad dollars.
Total Website Traffic Volume
Similar to business valuation and the relationship to recurring revenue, a website’s value gets a higher multiplier when the search volume is higher. The more traffic there is to a site, the more potential revenue that can be earned through ad dollars and direct sales.
Traffic is tricky, however. Some sites get a significant amount of traffic, but little of the traffic converts into customers. Others have low traffic but high conversion rates.
Traffic Sources
Your website’s traffic source also influences valuation. A site with regular organic traffic will be more valuable than a site that relies mostly on paid search ads to attract visitors.
Sites with diverse traffic sources, including organic, social media, email, direct, and paid are typically more stable. Organic, of course, is the most valuable type of traffic because once your site is established and it brings in regular visitors, organic is the cheapest traffic source.
A strong social media presence with high levels of engagement and followers is yet another positive factor for your site’s valuation.
Diversifying your traffic sources will also reduce the risk of a site depreciating in value after it’s purchased as well.
Type of Website
There are many different types of websites, including blogs, publisher sites, affiliate sites, eCommerce sites, and more. Each has value in its own way, but figuring out how much your site is worth will generally rely on revenue sources and frequency.
In other words, your website’s historical revenue will be the biggest indicator of overall value.
Category
You can make money with any type of website if you can generate enough site visitors. Using an ad network is an easy way to bring in money and improve your value.
The most valuable sites, however, are typically eCommerce platforms, social media sites, and search engines.
Ecommerce sites are valued because of the revenue they bring in. Social media sites and search engines generate revenue from advertising and the top sites in each category dominate the online advertising space.
Publisher sites can vary wildly in valuation depending on all of the factors we’re discussing, including popularity, longevity, and monetization. As such, it is difficult to benchmark or define the worth of websites.
Domain Name
Your domain name also plays a big role in your site’s value. Descriptive, easy-to-remember URLs ending in .com generate the highest value. For example, StockPhoto.com was sold on Flippa for $250,000. That was just for rights to the name and not the website itself.
Several sites, including GoDaddy or siteprice.org, have a free domain name valuation tool. This calculator will provide a quick estimate of how much your URL is worth, although it will only provide the value for your domain name and not your website.
Your domain authority (DA) can also impact valuation. A site with a high DA is worth more. Moz has a free Domain Authority Checker you can use to check your site.
SEO Rankings
Websites and pages that rank highly for specific keywords can also command a premium — especially for highly competitive keywords or niche terms. The higher you rank for keywords, the more organic traffic you are likely to bring and the more valuable your site will be for advertisers looking for those words and phrases.
You can determine the valuation of certain keywords by looking at:
- Keyword position
- Total search volume
- Average cost per click
Free tools, like Google’s Keyword Planner, will provide you with SERP (search engine results page) ranking. Additionally, if you have Google Search Console set up for your site, you can sort by queries in the performance tab to see what keywords your site ranks highest for.
Other sites, such as Moz, SEMRush, and Ahrefs are very good paid options to help you track keyword performance.
Monetization Methods That Impact Website Valuation
Above all, the bottom line is…your bottom line. How much money your website makes on average will be the key to its valuation.
In essence, this is no different than how other businesses are valued. Businesses are priced for sale based on a multiple of cash flow, revenue, or profitability (and often a combination of all three).
Multiples can vary by industry, competitiveness, performance, and tangible assets but generally fall in the 4X to 12X EBITDA (Earnings before interest, taxes, depreciation, and amortization) range.
There are multiple ways to monetize your website and increase its value, including:
- Affiliate revenue
- Advertising revenue
- Guest posts
- Backlinks
Affiliate Revenue
With affiliate marketing, companies compensate publishers for generating leads, traffic, or conversions for their products or services. In other words, you do the marketing and if it leads to sales or other agreed-upon metrics, you get a fee or commission.
Affiliate marketing revenue can be lucrative. Spending is expected to reach $8.2 billion in 2022.
If you are interested in learning more about affiliate marketing or how to get started, read our guide, How to Integrate Affiliate Offers into Your Blog.
Ad Revenue
There are plenty of ways to generate ad revenue from websites, especially sites with significant traffic. The easiest way to monetize your website is by using an ad network, such as Newor Media or Google AdSense.
By adding a snippet of code on your site, you can earn mostly passive revenue by letting the ad network manage and sell ad space on your site. An ad network can handle all of the details for you, so all you have to do is place the code and collect a check.
The best ad networks will use header bidding, which allows you to put advertisers in competition with each other across marketplaces and ad exchanges in the demand pool. This gets you the best rates for your ads automatically.
How Ad Revenue is Determined
The two main forms of calculating ad revenue are cost per thousand (CPM) and cost per click (CPC). With CPC, you get paid when someone clicks on an ad on your site. With CPM, you get paid a rate for every thousand visitors that see the ads.
There are other forms as well, including cost per action, such as a conversion, or cost per app install.
In any case, the more traffic you attract (and the more targeted that traffic is), the higher ad revenues you can get.
Selling Guest Posts
Sites with significant traffic and strong search engine optimization can also offer guest post opportunities on their sites.
Companies and individuals pay a fee to publishers to highlight their thought leadership or content in front of a website’s audience. Guest posts typically include a backlink to the poster’s website.
Native Advertising
Native advertising is also a popular way to monetize websites. Native ads blend seamlessly with content on the site and resemble editorial content.
However, it is paid for by the advertiser and used to promote products or services, often in a subtle way. This type of advertising requires specific disclaimers and labels per the Federal Trade Commission rules.
Selling Backlinks
When you have a website with high domain authority, a link from your website to another site can be highly valuable. Search engines use domain authority as a ranking signal, so when websites with a high DA link to an external website, it implies trust in the external site, helping it rank higher.
Some sites, for a fee, will insert a backlink that points to another website. Typical costs for backlinks range anywhere from a few dollars to thousands of dollars.
Note: Be careful here. Google prohibits this practice and can penalize sites that buy or sell backlinks. Paid links violate Google’s webmaster guidelines and lead to lower rankings or penalties.
Affiliate links, however, do not violate guidelines as long as they use the correct schema markup, including rel=”sponsored” or rel=”nofollow” attributes. Ethically, you should also disclose any affiliate relationship with site visitors, letting them know that you may receive compensation for their actions.
Why Someone Might Want to Buy Your Website
Websites are bought and sold every day. Business owners, investors, and speculators are all potential buyers. For example, the brokerage site FE International brokers the buying and selling for hundreds of sites every year.
If you aren’t sure how to sell your site, a brokerage firm is a great source for getting your site sold quickly and without hiccups.
Turnkey Opportunity
If the website has existing revenue streams, someone might want to buy a site that already generates money. From there, they might just keep it running as is and generate revenue or they might invest in additional resources to increase profitability.
Just like buying an existing physical business, it’s often easier to buy an existing property with a known track record.
Premium URLs
Premium URLs, such as short, common words with a .com extension, are exceptionally valuable since most premium names have been snapped up over the years.
In September 2022, BuyDomains brokered website sales for Healthease.com for $5.7 million and ASAPMortgage.com for $2 million. Planetrx.com sold for $1.2 million on Flippa. At the height of the dot-com boom, Business.com once sold for $245 million.
SEO Value
Another reason someone may want to buy your website is if they operate in a similar space or industry. They can expand their reach by buying your site and either continuing to operate it or redirecting traffic to their own site. Redirecting traffic from a popular website can increase the SEO value of a buyer’s website.
For example, a company that can’t seem to break into the top five slots on Google search results might buy the site currently ranking #5 and move or redirect content to their site. That might push the buyer’s site ranking to the top spot.
How to Increase the Value of Your Website
There are several strategic ways you can increase the value of your website.
Improve SEO with Content Production
One of the best ways to do so is by creating relevant, informative, and educational content on your website.
While for years, publishers focused on creating keyword-optimized websites, Google’s new Helpful Content Update now places a higher value on content that is “people-first” by providing useful information using context and knowledge.
Keywords and competitive research are still important as they provide signals to search engines about your content and its value, but solid, consistent content is what brings in organic traffic over the long haul, making your website more valuable.
Build Backlinks
Backlinks to your website from high-quality sites can also improve your SEO. It’s one of the core ranking signals that search engine algorithms use to determine a website’s authority.
When a search engine sees that another high-quality site links to yours, it demonstrates the value of the content you have. So, the more links from top sites you get, the higher you can rank in search.
Expand Into Additional Categories
Expanding into other categories or niches can also increase your website’s appeal. Just as well-known brands do product extensions to increase their market share or grow new markets, website publishers can do the same. These can be sub-sections of websites that focus on specific market niches designed to attract specific audience segments.
Not only can this increase traffic, but it can also attract different categories of advertisers that are trying to reach these specific segments.
Secure Most Popular TLDs
Another way to increase value is to acquire popular top-line domains (TLDs) for your website. Perhaps you own the .com URL, but you may also want to acquire the .net or industry-specific extensions if available.
While .com, .org, .net, and .edu are the most common in the US, there are more than 300 TLDs available.
Leverage Social Media
Well-executed social media strategies can also help boost website traffic and brand favorability. Social media provide another outlet for publishers to reach audiences and drive traffic back to their websites. It also provides an easy way for users to share content and engage directly with brands.
Multiple Types of Monetization
Broaden your monetization options. If you’re not using an ad network now, it’s the easiest way to generate revenue from your existing traffic. The more traffic you get, the more money you can make.
You can also sell your own ads, sell products or services, engage in affiliate marketing, and more. You can learn about different ways to monetize your site with our guide, How to Make Money from Website Ads, Digital Products, & More.
Tips for Selling Your Website
If you’re looking to sell your website, do your homework upfront. You’ll need to collect your numbers over time, so you can persuade buyers about the value of your site.
Be Prepared with Numbers
In a physical business, prospective buyers will expect you to open up the books and show the details of how your business operates, generates revenue, and how much money you make. It’s no different online. You will need verifiable information from a trusted source, such as Google Analytics, and revenue statements from ad networks or other sources to demonstrate the health of your traffic and finances.
The key metrics, such as daily pageviews, organic traffic, and revenue, will be essential for buyers. This information will also help you benchmark your site against others to set a fair price.
Use a Website Value Calculator
While not a full domain appraisal, a website value calculator can help you prepare for a negotiation. Benchmarking against other sites can help you establish value, similar to the way comp sales do for real estate.
You may also want to check your site’s potential future earnings by taking advantage of Newor Media’s free Website Earnings Calculator.
