How to Value, Acquire and Grow Content Sites With Ken Roberts

MarketMuse hosted an in-depth webinar covering everything you need to know about buying and growing content sites. Jeff Coyle, Co-Founder and Chief Strategy Officer at MarketMuse, welcomed his guest Ken Roberts, Founder of Micro Exit, Co-Founder of Falcon River, and CEO of Owl Mountain Capital, to talk about this important topic. Ken Roberts shared his strategy for acquiring and scaling content sites, from the purchase to the growth phase. 

The pair’s conversation was an in-depth exploration of topics including:

• Six things every site investor should look for in a potential purchase
• How to do your due diligence when researching sites
• How to spot if a site is under-monetized
• Strategies for valuing sites 
• Tactics for making quick improvements and long-term gains

Show Notes

Acquiring a content website to grow is a significant investment. Before you take that big step in your career and build your business online, you should be aware of the implications of your decision. Many responsibilities and tasks will wait for you, and understanding them before you put your funds to work is essential. Undoubtedly, you’ll also need to find good deals and take action to turn an acquisition into an asset. 

6 Aspects to Consider Before Investing in a Site

There are six major website factors you should research before even considering buying a website:

• Organic site traffic: Find out whether the site’s traffic is going up or down. If it’s already decreasing, you’ll have to do a lot of work to turn that around.
• Language and geography: It’s easier to monetize sites in languages you speak, and English may be the best option. Additionally, it’s worth considering where current traffic comes from; ideally, the traffic and the site are in the same countries as your target audience.
• Site age: The older a site, the more settled it is in SERPs for Google and other search engines. It’s best to look for a website existing for at least two years.
• Traffic targets: Find out which pages are getting the most traffic with a Google Analytics search. Follow the 10% rule: you don’t want any page to get more than 10% of the traffic except for the homepage.
• The multiple: Websites typically get valued as a multiple of their revenue. A multiple of 2x or 3x is a good option unless you’re making a strategic acquisition in your niche to buy quality content sites.
• Monetization: Do your research and determine the seller’s discretionary earnings (SDE). The results will tell you the site’s revenue, minus expenses, plus one-time add-backs.

These six components give you a solid overview of how well you’ll be able to grow the site after acquiring it. For instance, understanding how traffic spreads across pages helps you learn what search engines consider great content and supports you in building your digital marketing strategy for the site. It can also aid you in deciding whether it’s worth improving the blog content to spread traffic more evenly.

Performing Your Due Diligence

Once you’ve done your background research and decided a website is worth a closer look, it’s time to perform your due diligence. For instance, it’s not enough to know that site traffic is increasing right now. You need to trust that the traffic will continue to grow after you’ve made the acquisition.

Look into the site’s performance across seasons. A health page will see most of its website traffic in January and February during the New Year’s peak in Google searches, so don’t base your traffic estimates on a single week.

You should also investigate the website personally. It’s one thing to run blog content through a search engine optimization (SEO) checker and another thing entirely to read a blog post yourself. Visit the three most-visited pages and a handful of other random blog post pages and read them from start to finish. You’ll spot whether native English speakers wrote the posts and determine the existing content quality, which will have a massive impact on your website traffic over time.

Last but not least, check the image sources on the site to make sure you won’t run into unexpected sourcing fees. It’s easier to work with a site that already prioritizes open-source pictures during content creation than trying to update every piece of visual content in the existing base.

How to Tell if a Site is Under-Monetized

A site is under-monetized if it brings in excellent traffic from search engines and other sources but does not utilize those visitors. You can determine whether a site is under-monetized or not by comparing a few metrics to other websites in similar niches. The three metrics to monitor include:

• RPM: Revenue per thousand page views.
• EPM: Earnings per thousand visitors.
• EPC: Earnings per click.

You can check EPM and RPM on affiliate marketing and ad network sites by taking the revenue number they give you, dividing it by their total visitors as tracked by Google Analytics, then multiplying that by a thousand. If a site’s RPM, EPM, or EPC is significantly lower than similar content marketing sites, it’s probably under-monetized and could be a good purchase.

Strategies for Valuing a Site Appropriately

There’s more to valuing a site than just determining its revenue and applying a random multiple. To select the multiple you consider worthwhile, take a holistic look at the site. Ask yourself questions such as:

• How much work are you willing to do to improve a distressed asset?
• How easy are the site’s problems to fix?
• Will you need to perform thorough keyword research to build a content strategy that will help the site appear in a search engine?
• What monetization channels is the website using?
• Could you add Google Ads to increase monetization?
• Is the content marketing niche valuable or relevant to your portfolio?

The average multiplier is 3X to 4X, but older and super-premium sites can see multiples as high as 9X. Ken Roberts also has a guest blogging tip for anyone looking for a quick way to check whether a site is worth a purchase:

“Before you buy the site, offer to do some new content on the site for the current owner. It’s a win-win for both of you; he’s getting a free blog post, and you can see how quick it ranks.” @jeffrey_coyle @marketmuseco @realkenroberts #contentmarketing #siteacquisition

“If I publish something and it’s ranking in 24 hours later for a keyword that I wanted to target and already getting traffic, that’s going to be a buy for me. I know this site is a website that Google trusts and has some good authority around that content,” added Ken Roberts. 

Tactics for Quick Improvements and Long-Term Gains

There are two ways to grow a content marketing site once you’ve acquired it: quick wins and long-term gains. Quick wins include making improvements like:

• Switching to better affiliate networks
• Moving to more effective ad networks
• Raising direct ad prices
• Performing A/B tests on prices in general if the site comes with an online store

Long-term gains include improving the content itself, such as:

• Optimizing current blog content through enhancing links, performing SEO audits, and targeting copy more effectively with keyword improvements
• Publishing new quality content like a blog post that’s already optimized and fills gaps present on the site

Featured Guest

Ken Roberts is the CEO of Owl Mountain Capital, Founder of Micro Exit, and Co-Founder of Falcon River. He’s helped acquire and scale multiple 7 and 8-figure content websites. Ken runs Owl Mountain Capital, an investment firm backing entrepreneurs and early-stage digital startups.

You can learn more about Ken Roberts on his LinkedIn or his Twitter.

Takeaways

Acquiring and growing a content site isn’t as simple as finding the first one with a single spike in blog traffic and capitalizing on it. As Jeff Coyle and Ken Roberts discussed, there’s much more to it. The takeaways from this webinar tell us:

• Do your due diligence when researching new potential acquisitions. Dig into the site’s background to determine whether there are any hidden problems like declining traffic or tightly licensed images that will make it harder to perform online marketing and create content.
• Look for under-monetized sites to make acquisitions at better multiples. Those with low RPM or EPM are likely to be easy to grow.
• Grow sites by focusing on quick wins and long-term strategies, from improving backlinks to building on valuable content.

Resources

Explore more on the topic of how to buy and grow content sites in the following resources from the webinar:

Owl Mountain Capital

Micro Exit

Falcon River

Microexit Due Diligence Checklist

Google Analytics

Google Search Console

Join the Content Strategy Collective