6 Ways To Minimize The Risks Of Owning Content Websites

Owning a content website (aka blog) can be a great way to make passive income and generate high cash flow. The appeal of content websites is that they are easy to start and can be done with little to no capital, which attracts many entrepreneurs without significant financial resources. However, the reality many find is that actually getting them to take off is trickier than it seems. It can take years of consistent work without seeing any results or proof of concept. For that reason, I recommend buying a content website; as opposed to starting one. Many content websites that come up for sale produce high cash flow at a 36-48x monthly multiple.

The allure of content websites and nearly passive income is not without risk, though. In this post, I’ll elaborate on the two biggest risks content websites face and provide ways to minimize them.

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 a specific method of keyword research and publish content specific to that search query. The traffic to the site is usually monetized through affiliate marketing links and/or display ads.

The Risks of Content Websites

There are two major risks to the content website business model.

1. Google Algorithm Updates: Nearly all content websites depend on traffic from Google search. The Google algorithm is estimated to update 500-600 times per year. The broad focus of these updates is to further Google’s mission to deliver the best and most relevant content to the searcher. Reading between the lines, this tells all content website operators that they need to focus on user experience. However, Google doesn’t always get it right. You can truly publish the best content for users and still be pushed down in search rankings with the next updates, resulting in traffic and revenue loss.

   

2. 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 you at their mercy. For example, in mid-2020, Amazon cut their affiliate commission rates by 50-80% for most categories. Imagine buying a site in January 2020 valued on monthly earnings of $10,000/month, only to drop to $3,000/month when Amazon cut commissions. Ouch!

   While there are other affiliate programs, none convert nearly as well as Amazon. Likewise, while there are other display networks, they tend to be category-specific for top pay.

Google Algorithm Updates

Now let’s address how we can mitigate the risk of Google algorithm updates.

1. Create Video Content: Build an audience on YouTube. This provides a traffic (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 minimal effort put into them and no real engagement. Make the effort to build a following that is engaged 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 push you down in search.

3. Build an Email List: An email list gives you a direct line of communication with your audience. Open rates may be low, but building an email list from your organic traffic with a lead magnet adds another buffer against Google algorithm updates.

   Ultimately, the ‘big picture method’ of mitigating Google algorithm 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.

1. 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 work out well with ecommerce brands that are well established and in demand but do not sell on Amazon.

2. Create Digital Products: This is my favorite! Create a digital product that benefits your audience. It could be a course, an ebook, an audiobook, a planning template, or 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! A great example site I’ve observed is safetytalkideas.com. They sell printable note sheets for safety meetings.

3. 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. A great example site I’ve found doing this is Swim University. 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 risks. 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.