Quick – how would you like to put up a simple website and earn advertising income from it for years to come? And then replicate that process over and over to build a huge (passive) monthly income?
I’ll bet you would – and so would a lot of other internet marketers, judging by the number of “make money from Google Adsense” ebooks out there (and the popularity of my own post on how I went from $0 to $2,000 per month in Adsense revenue).
This post is the first in a series I’m calling the “Adsense Challenge”. My goal is to reach $10,000 in monthly Adsense earnings within the next twelve months.
In this post I describe:
- How I got started in Adsense
- What I’ve learned over the past 12 months in terms of how to rank websites quickly
- The strategy I’m going to implement to achieve my $10k/month goal.
And in upcoming blog posts I’ll describe – in detail – the steps I’m taking to achieve that goal.
But first, how my love affair with Adsense came about…
Why Adsense is The Ultimate Passive Income Stream
In September of 2007 I launched my first website. At the time I was fixated on the “advertising revenue” model of making money online, as opposed to making money through affiliate marketing, e-commerce, etc. My simple-minded expectation was to put up one site, get some traffic, and retire off the advertising revenue. Then reality set in…
That one site – which is in the home improvement niche – took some time to get its first visitors, because I knew nothing about SEO. So, like most IMers, I lost interest in the site and moved on to building another site, based on another business model (this is a disease I call “affiliate pinball”).
After about six months I checked the traffic for that first site and noticed it was getting around 50 visits per day. Not huge traffic, but given that I had set up the site then left it alone, I was pretty happy! In retrospect, I realized that the site was getting traffic (despite me doing no SEO) for two reasons:
1. The keywords that Google associated my site’s pages with were very low-competition, so many of my pages ranked #1 in Google.
On many pages I had content related to government rebates for home improvements. And in many cases I ranked higher than the government website that the rebate belonged to! (Yes, I know SEO gurus always talk about the power of getting backlinks from government websites. In my experience, though, many government sites are not optimized at all for the search engines, and can be outranked fairly easily.)
2. Because my site had a lot of pages (I set it up to be an “authority” site from the beginning), a lot of other sites were starting to link to it. Most of those sites weren’t of great quality, but there were enough of them to give some “link diversity” to my inbound links.
Now, that would be a pretty unremarkable story, if not for the fact that my site still ranks #1 for many keywords – and I haven’t touched the site in over two years!
I haven’t added a single word of content to the site, and have NEVER done any backlinking to the site.
And yet I’ve consistently made up to $1,000 per month in Adsense earnings from that one site. Here’s a graph of my earnings going back to February 2009:
That site has contributed to total Adsense earnings for me that have touched $2,500 some months…before coming down significantly in recent months.
My Nosedive in Adsense Earnings…And What I’ve Learned From It
In the past 12 months, my monthly Adsense earnings have dropped from $2,500 per month to $1,000 per month. It’s been a pretty steep decline from the summer of 2011, as you can see in the graph below:
The decline is the result of a significant decrease in the organic traffic coming to my sites from Google. Basically, my traffic has dropped 50% over the past few months.
I’ve read a lot of blog posts on Google’s recent algorithm changes (the “Panda” update) to try to figure out what caused the drop in traffic. And I’ve also talked to friends who run high-traffic sites. Here’s my theory as to why my sites took a hit:
- Lack of fresh content.
Most of my sites are in health niches, which means the content is “evergreen”. In other words, the content on my sites doesn’t change much, because the diagnosis and treatment of the health conditions remains pretty consistent over time.
You can contrast this with a news or sports site, where events change all the time, so websites need to constantly refresh their content. For some reason, with this latest algorithm update Google seems to have swept all sites with the same brush.
- Low-quality backlinks.
Back in the good old days, it was possible to rank high by simply building tons of links to a site – but now it seems that Google is placing even more emphasis on the quality of backlinks.
- High-competition keywords.
I’ve always believed that keyword research is a skill that every internet marketer must master – even if they eventually outsource that task to someone else. Choosing the right keywords can absolutely make or break a new website.
The past few months has only deepened this belief. My sites that were dropped down the rankings are ALL in high-competition niches, and all target very competitive keywords. Conversely, my sites that are still at the top of the rankings are focused on keywords with relatively little competition.
What I’ve Learned from Losing 50% of My Organic Traffic
Before you slot this blog post into the “sorry loser” category, please understand that I don’t see my drop in rankings as a bad thing.
On the contrary – it’s been a great learning experience, as well as a wake-up call. Prior to the Panda update I didn’t pay much attention to Google’s requirements. Now I’ve become a student of the search engines, and will be keeping a much closer eye on how the changes I make to my sites affects their rankings.
One other thing: from what I’ve read, the Panda update cleared a lot of junky sites from the SERPs (search engine results pages). And I think it probably cleared out a lot of lazy IMers, too – the ones who aren’t willing to put in the effort necessary to succeed. Higher barriers to entry mean less competition for those of us willing to jump higher!
I expect that by focusing on what Google wants, I’ll be able to get my organic traffic back up pretty quickly. And I’m aiming for even higher revenues from Adsense for this year.
My Adsense Goal for 2012
As mentioned at the beginning of this post, my Adsense goal for 2012 is to attain $10,000 in monthly earnings by December 31st, 2012.
Now, I’m not necessarily expecting all of that revenue to come from clicks on Adsense ads. In 2012 I’m also planning to get into website “flipping”, which involves building sites for the express purpose of selling them.
Why focus on revenue from Adsense ad clicks AND sales of niche Adsense sites?
Simple: because it diversifies my business. One of the other lessons I’ve learned from getting slapped by Google is don’t rely on one source of traffic or income for your online business.
How my Adsense income is split over the coming months (i.e. what proportion comes from ad clicks versus the sale of niche Adsense sites) is anyone’s guess. But it’s still important to break down the possible scenarios for my $10,000 goal, so I know how much traffic and clicks are necessary. That, in turn, will drive which keywords I target.
Here’s how the numbers might break down in reaching my $10,000 per month goal:
Scenario #1: 50-50 Split in Adsense Earnings and Niche Site Sales
How to make $5,000 per month in Adsense revenue
In this scenario, I would earn $5,000 per month from ad clicks (up from the ~$1,000 I’m earning now), and another $5,000 from selling niche Adsense sites.
Here are my assumptions underpinning the $5,000 in ad clicks. I’m assuming that:
- My sites will earn $0.75 per click (which is the current average CPC I get on my sites now)
- At an average CPC of $0.75, it will take 6,667 clicks to earn $5,000 per month
- Assuming a clickthrough rate (CTR) on my sites’ ads of 5% (again, this is the CTR I currently get on my sites), it will take 133,333 monthly visits (4,444 daily visits) to achieve 6,667 clicks
So the bottom line is this: assuming I earn $0.75 per click, and assuming that 5% of visitors to my sites will click on an ad, I will need 4,444 visits per day to my sites.
Sound like a tall order? It does to me, too! That’s a lot of traffic. But there are ways I can get around the traffic problem, by (a) increasing the average CPC above $0.75, or (b) increasing the CTR above 5%.
But that’s only the first half of my target income. Let’s move on to the second half:
How to make $5,000 per month from flipping niche Adsense sites
For the past couple of years I’ve had a casual addiction to a site called Flippa (previously known as Sitepoint Marketplace).
You probably know about it. It’s the site that you say to yourself “I’ll just pop onto Flippa for a couple of minutes to see if there’re any interesting sites for sale today.” Then an hour later you’re still stuck in the marketplace – because it’s so interesting to learn how much Adsense revenue a site in the cure-acne-with-watermelon-treatment niche is making!
The flip side to Flippa (I’m so punny today) is that some people are making a killing selling sites there. What’s so appealing about Flippa – and flipping websites in general – is that it’s possible to sell a website for up to 25 times monthly earnings (although the average seems to be 12 times monthly earnings). So if your site is making $100 in monthly Adsense revenue, it’s possible to sell it on Flippa for $1,200 to $2,500.
This is how I plan to add to my monthly Adsense earnings – by selling some of the new sites that my team will be building and optimizing for the search engines.
So assuming I’ll be able to get 12 times earnings, making $5,000 in website sales per month would require a site to be making $416.67 in monthly Adsense earnings – or around $14 per day. At 25 times earnings, the site would only need $200 in monthly earnings ($6.67 per day).
Of course, this is the theory. Who knows how it will turn out in realty? But that’s what’s so exciting about planning (did I just say that planning is exciting?) – you never know how things are actually going to turn out.
Best Niches for Adsense Sites
So which niches will I be focusing on for my Adsense sites? Health niches. The reason for that is straightforward
- On average, health niches get a pretty good cost-per-click (in other words, the amount a website owner is paid every time someone clicks on an ad on their site).
I have a handful of sites dedicated to specific types of surgeries, and have been paid up to $10.00 per click on those sites (getting that much per click doesn’t happen often, but when it does it’s pretty sweet!)
- Related to the CPC, health websites also get the highest price at website auctions.
Take a look at this awesome infographic produced by Flippa.com on which niches sell at a premium:
Here’s the bottom line of Flippa’s research:
- Websites in health and sports niches command the highest multiple. Health websites sold for 19.9 times monthly earnings, while sports website sold for 23.2 times monthly earnings.
This means that if you have a health website that’s earning $100 per month, you can expect to sell it for approximately $2,000 on Flippa.com
- Websites that primarily earn their income from advertising (as opposed to physical product sales, memberships, or affiliate commissions) also command the highest multiple: 17 times monthly earnings.
The takeaway from this research: if you’re thinking about getting into website flipping, focus on building websites in health niches that are monetized through advertising.
That’s what I’m going to be focusing on in 2012!
My Adsense Plan for 2012, in a Nutshell
Based on what I’ve learned over the past year about ranking sites (and keeping them ranked!), here is my Adsense plan for 2012:
1. Launch as many new sites each month as my team can handle. Internet marketing (like many things in life) is a numbers game. The more things you can throw against the wall, the more likely it is that at least one thing will stick.
2. Quickly separate out the sites that look like winners (i.e. the sites that rank relatively quickly, and maintain those rankings) and regularly add new content to those sites, so they become authority sites. My past experience has been that once Google anoints a site a “good” site, it continues to sprinkle pixie dust on every new page added to the site. New pages get good rankings, which of course increases traffic.
3. Sell off some of the winners, and keep the rest. I might package one winner with a handful of other sites that are taking longer to rank, and put the package on Flippa.com for sale.
Here are some other concepts I’ll be testing out in coming months:
- Does focusing on “country top-level domains” make sense (in other words, domains that end in a country extension, such as .us for the United States, .ca for Canada, or .com.au for Australia)?My suspicion is that this is an area that is ripe for making money. Last year I had an interesting discussion with an Australian affiliate marketer who recently moved to Canada. He was dumbfounded that most Canadian internet marketers focus on .com domains, and ignore .ca domains.
I mentioned to him that we focus on .com because those domains get a lot of U.S. traffic, which is a huge market. But he sensibly pointed out that even though it’s a big market, it’s also often much harder to rank for a .com domain, because there’s so much more competition.
He explained that he makes a full-time income from ONE “freebies” website that targets only Australia. And Australia is a country of only 22 million people! His points really got my attention, and I’m going to experiment with some .ca domains this year.
- Which ad placements and site layouts make the biggest difference to the clickthrough rate on a site’s ads? I already know that where an ad is placed on a web page can make a huge difference in the CTR on that ad. My question is: what are the best spots to put ads?
Which specific health niches pay the highest per click? My experience with Adsense over the past couple of years suggests that there’s variation within niches in terms of the cost per click.
For example, I’ve consistently had the highest payout on my surgery sites (but those sites have also consistently had the lowest clickthrough rate on ads – which might be because people find the content on the sites good, and don’t feel the need to click away from the site. A backhanded compliment!) So, I’ll be examining which sub-niches get the highest cost-per-click.
Next Up in the Adsense Challenge Blog Series
In the coming months I’ll post my Adsense earnings on a regular basis, and will be writing posts on many aspects of setting up and ranking niche Adsense sites. The topics will include:
- How to find keywords with low-competition but high search volume
- The best website layouts and advertisement placement for Adsense
- Simple SEO tactics for getting niche Adsense sites ranked
- Outsourcing niche site development and SEO
- Monthly earnings reports where I also describe any lessons I’ve learned over the past 30 days
There are few truly “passive” income models online. E-commerce, affiliate, and info product websites require product research, customer service, and other work that is time- and labour-intensive.
Setting up niche Adsense sites does require work – but the barriers to entry are much lower than in other online money-making models. And if you do your keyword research right, there’s often little (or no) maintenance work required to keep the advertising revenue coming in for months or years.
Do you have any questions about setting up niche Adsense sites? Please leave them below, and I’ll do my best to answer them in future posts.