There’s so much going on here these days. We’re busy working on expanding our business, in the hope of doubling our investment in content. We’re shooting for investing more than $20,000 a month in new content for our portfolio of sites.
That’s a lot of money.
Exciting as this development is (it really is!), it’s also scary. We’re walking into this adventure with our eyes wide open, and with a full realization of the risks involved. For my own peace of mind, and to help put our move in perspective, I created this list of everything that could go wrong with our plan.
Hopefully, this will also help people who are new to web publishing understand what it is that they’re walking into. There are so many internet marketers who try to paint a rosy picture of what growing a content site is like, that it’s good to stop occasionally and look at the less-than-rosy potential risks too. I’ve also included sections on how to mitigate the risks as best you can.
- The Content Sites Business Model
- Content Websites As A Form of Investment
- Content websites are a risky investment
- #1 You don’t know how to get traffic
- #2 Taking a Google algorithm hit
- #3 Ad or affiliate network collapsing or kicking you out
- #4 Affiliate networks changing the percentage of commissions
- #5 Site crashing due to technical issues
- #6 Hackers bringing the site down
- #7 A disgruntled employee deleting content
- #8 A DMCA complaint making your host take down the site
- #9 A lawsuit
- #10 A global crisis
- Lowering your financial risk
The Content Sites Business Model
Publishing websites can be a lucrative business. If you do it right and if everything goes well, you could make a LOT of money from a relatively modest investment. Here’s a quick recap of how the model works. These are generally the figures that we use for our business, and they’re based on our specific setup.
On average, each article costs $80 to publish. This includes the cost of the text itself, images, editing fees, and overall posting and software costs.
That means 100 posts will cost $8,000 to publish.
Now, let’s look at how much revenue these 100 articles can generate.
When creating a plan for a new website, we assume an RPM (Revenue Per 1000 views) of $20. We also assume an average of 300 page views per post.
So 100 posts should generate 30,000 Pageviews a month (once they reach their full potential). Taking into account the $20 RPM, our 100 posts should make $600 each month. That comes to $7,200 a year.
In my experience so far, articles are likely to hold their traffic for three years on average. It could be longer (we have yet to see). For our calculations, let’s assume three years. Because it takes articles about six months to reach their full potential, we’re going to take just 2.5 years of revenue into account.
Two and a half years of revenue, at $7,200 a year comes to $18,000.
In other words, we invested $8,000 to make $18,000 3 years later. That is a return on investment of more than 200%.
Content Websites As A Form of Investment
A 200% increase in value is quite good.
Compare this to investments in ETFs or real estate.
Let’s say you invest $8,000 in ETFs or real estate and assume an optimistic 10% growth every year. That comes to a total of just over $10,000 three years later. Investing in content websites seems to be almost twice as lucrative.
How come people don’t invest more in websites then? You would think that everyone would be investing millions of dollars in content websites, hoping to double their money within a few years.
And that brings me to the topic of this post. At least one of the reasons that prevent people from flocking into investing in websites is the inherent risk.
If you invest in ETFs, then you’re not likely to lose all of your money. Sure the market may go down at some point, but it always recovers. You are not dependent on any single specific company for your profit.
With Real Estate, even if your property was to suffer a loss of value at some point, you will probably still have most of the value intact.
With websites, things are less stable. A website can go from being a cash-generating machine making millions of dollars a year into being worth exactly nothing. It’s an asset that can be literally obliterated – and that can happen surprisingly fast.
Content websites are a risky investment
Let’s take a look at some of the things that can make a website tank and possibly even disappear entirely. Believe it or not, in over 20 years of managing my websites, I’ve pretty much seen it all. These are not theoretical risks. They can and do happen, and most of them even happened to me.
What’s more, this isn’t just about an established site tanking. If you’re new to web publishing and want to invest in developing online assets, you should be extra careful. The business model that I described above? It can take a while to figure it out and do it correctly. While I’m pretty confident that I can generate $600 a month from 100 posts these days, there was a learning curve to go through to get to that point.
#1 You don’t know how to get traffic
That is probably the number one risk if you’re new to web publishing.
I’ve seen people ask as much on forums –
I love how much money you can make from content websites! I don’t know how to write very well, but I have $5,000 to invest, so why can’t I just buy 80 blog posts to get started?
Nope. Don’t do that. Not unless you’re sure that you know how to get enough traffic to your site.
For myself, I know how to get traffic from Google. Also, some traffic from Pinterest (following this system). I don’t know how to get viral social media traffic via Facebook, Twitter, or Instagram. I’m sure it’s possible, but it’s not something that has ever worked well for me.
Since 90% of my traffic is Google-driven, my forte lies in two elements –
- Choosing the right topic for a post.
- Creating a post that users (and therefore Google) like.
Combining these two elements equals enough traffic to get me to my 300 pageviews per post average (or more).
If you don’t know what you’re doing, you could easily go after the wrong topics. And even if you choose the right queries to pursue, you need to know how to provide a post that answers the user intent in the best possible way.
Get it wrong, and you could have a website with 80 posts that will get you zero traffic. That would be thousands of dollars gone to waste.
How to mitigate the risk
How can you learn to get traffic to a website? If you’re new to web publishing, you can start with one or more of Jon Dykstra’s Fat Stacks courses – there’s a full bundle option, or you can just focus on an element that you want to learn. It makes sense for me to recommend the Fat Stacks courses because that’s the system that I follow.
Learning through a course is a great – and much-needed start – but I would still advise starting slowly. Get your feet wet with a small amount of content before diving headfirst into the deep water.
#2 Taking a Google algorithm hit
That’s probably the one thing owners of SEO-driven traffic fear the most. Every few months, Google announces an algorithm update. When that happens, it can feel like an act of God. You can only hope that the odds will forever be in your favor.
Taking a hit from a Google algorithm update can mean losing anything from 5% to 50% of your traffic within a few days. I haven’t seen anything more dramatic than a 50% decrease at any one single algorithm update. However, I have seen sites taking hits one update after another, eventually losing most of their traffic.
How to mitigate the risk?
Just about the only thing that you can do is make sure that your SEO efforts remain above the board.
For myself, that now means no active link building. In many cases, artificial link building is said to be the main thing that Google targets. I think that sticking to producing quality content that helps users, without messing around with any link building tactics, reduces the risk.
The other thing you could do is diversify your traffic sources. If you don’t rely on Google for all of your traffic, algorithm updates become less dangerous for your business model.
#3 Ad or affiliate network collapsing or kicking you out
If you rely on a specific advertising network or affiliate program for your revenue, you could have a problem if they collapse or just kick you out of the program.
I’ve had both things happen to me over the years. I’ve lost count of the number of companies that I’ve seen go belly-up. When you have a website promoting their service, that hurts.
A few months ago, an ad Network pretty much kicked one of my Websites out. They claimed that the site was getting bot traffic. It wasn’t, but there was nothing I could do to disprove the claim. I ended up taking the sites to another network. There were six weeks in between where the site had no ad revenue.
How to mitigate the risk?
Diversifying your revenue sources is the best way to mitigate this risk. Have more than one site and work with more than one network.
It also doesn’t hurt to spend some time networking on forums. You can often get a sense of what’s going on and which networks are becoming less active and more likely to go out of business.)
#4 Affiliate networks changing the percentage of commissions
Yes, I have the recent Amazon commission slash in mind. Website owners that relied solely on Amazon affiliate fees were hit pretty badly by this. Some Amazon Associates sites went down in value by 70%, literally overnight. That’s not likely to happen to your ETFs or real estate Investments.
How to mitigate the risk?
Again, diversify your revenue sources. Avoid relying on the single affiliate program. If you see that your website becomes too reliant on any single source, stop to think about what happens if you lose that source. Remember, Amazon can even kick you out of their program altogether.
#5 Site crashing due to technical issues
We are so used to hosting are sites virtually that it’s easy to forget that their actual computer there at the back end. These computers are vulnerable, and they can have issues. You could end up losing valuable information or even your entire website on once a server crashes, or possibly there is a malfunction in software.
Nowadays, most hosts back up their servers properly. But not all of them do – at least not without additional payment. And backups are not immune to issues either.
Here’s a cautionary tale: Years ago, I had an entire huge site collapse. I counted on the backups, but guess what? They were corrupt. Fortunately, we had a backup that was six months old, stored locally. We had to pay a server admin a lot of money to bring the site back online. And we ended up losing six months’ worth of data. It hurt.
How to mitigate this risk?
You have to back up all of your websites correctly. Large or essential sites should be backed up in more than one location. These days, all of my websites are adequately backed up with at least two copies kept at separate places. I posted about my backup system here.
#6 Hackers bringing the site down
Can you imagine your website being under a DDOS attack? That’s happened to me too. I’m not sure what can be done about this today, but back then, recovering from a DDOS attack was a long and complicated process.
I’ve also had WordPress sites hacked multiple times. On several occasions, hackers placed political messages on the front pages of my website. In other cases, they planted malicious codes or black hat SEO links. This happened to me not too long ago (and I wrote about it here).
How to mitigate this risk?
Fortunately, these days WordPress websites are relatively secure. As long as you update your software on time, you are not likely to be the victim of brute force hacking.
Avoid the plugins and templates that aren’t from trusted sources and keep everything up to date, and you’re 90% protected.
The other 10% comes from keeping your passwords secure and making sure that anyone with access to your website keeps their passwords secure as well. You can also invest in WordPress plugins that keep your site safer if that’s an issue.
#7 A disgruntled employee deleting content
If you provide writers, VA’s, or other people you hire access to your WordPress installation, you run the risk of foul play. A disgruntled employee can delete your content or, worse, adjust it in a way that will cause you a big headache.
I once had a moderator on my forums site who left the team in a less-than-cordial manner. As a moderator, she could edit and delete posts. She went ahead and removed all of her content from the site. We managed to undelete it because we noticed it soon enough and still had viable backups. But it was a close call.
How to mitigate the risk?
Only allow people you trust to access your admin panels and limit their access as much as possible. If you give writers access to WordPress (I do), then make sure their accounts are writer-level only. I also use a plugin called Adminimize to make sure writers can only write new posts, or edit their posts. Nothing more.
If you’re about to let someone go, disable their site permissions before you let them know.
#8 A DMCA complaint making your host take down the site
What happens if someone thinks that you copied their content? They could send an email to your host, filing a DMCA complaint against you. Unless you provide your host with some kind of proof that the content does not violate copyright, they will be forced to take down your website.
Fortunately, That hasn’t actually up happened to me. I have filed such complaints against other websites and have taken down such sites in the past.
How to mitigate the risk?
That one is relatively simple: Don’t copy other people’s content.
Don’t grab images from another website without getting their written permission in advance. Do not copy posts from other websites and post them on your own. Not even if you provide a source link. A scraper once told me that he had the right to copy my entire website because he added a source link in every post. He was wrong. And yes, I had his site taken down.
Make sure you only use stock photos that you paid for or ones that you have written permission from the owners to use. Hang on to the documentation. You never know when a copyright troll may come after you.
#9 A lawsuit
Managing any business, including a website, comes with legal headaches. As a publisher, you could be sued not just for copyright issues, but also for defamation.
Years ago, I was a moderator on someone else’s forums. Someone sued the site for libel over things some members had said about her. The site owners, as well as the moderators, were all involved in the lawsuit. That person wanted $200,000 in compensation from each one of us. After three years of litigation, the lawyers reached a compromise, and we ended up paying $500 to that person. Our lawyer agreed that we were in the right and have won the case had we continued in court, but we preferred to pay $500 rather than spend a few more years with a claim being dragged through the courts.
The moral of the story? There are several. But one of them is that a website is a publishing platform, and as such comes with the added risk of lawsuits. If you’re not careful, you could end up losing more than your initial investment.
How to mitigate the risk?
If your website is large enough, it’s probably a good idea to talk to a local lawyer who specializes in internet law. I hired a lawyer who spent a couple of hours with me going over my business model. He found potential areas where we could further mitigate legal risks by adding Terms of Service statements to the site. It’s not foolproof – nothing every is – but it helps me sleep better at night.
#10 A global crisis
A few months ago, I wouldn’t be sure whether or not to add this one as a risk to your business. What kind of global crisis could affect the website? It’s not like we could have a global pandemic.
Well… Guess what?
How to mitigate the risk?
A global crisis can hit any business. Judging by the recent pandemic, it looks like online businesses fared pretty well, compared to many bricks and mortars businesses.
The one thing I would suggest is to always have enough money in emergency funds. You just never know. For example, during March and parts of April. Revenue from display ads did indeed go down. Since my family doesn’t rely on that for our daily needs, we could sail through those two months without a problem.
Lowering your financial risk
As you can see, there are many risks involved in creating an online business. Granted, the same is true for companies in general. But if you look at this business model as an investment, then clearly it is riskier than investing in real estate or ETFs.
Here are a few more things that I do and would recommend to anyone interested in investing in sites.
We don’t borrow money to invest
We invest a lot in content these days, but that money comes from our ongoing revenue stream. We don’t borrow anything from the bank, or any other source. Granted, we are sort of “borrowing from ourselves,” but we make sure the risk is well-calculated. My husband still has his day job, and we never touched our life savings, nor are we going to.
We put keep learning and adjusting
You really do need to know what you’re doing if you want to make money in online publishing. As I said earlier, it’s entirely possible to lose a lot of money by publishing the wrong type of content.
If you’ve been following my reports, you know we’ve been growing our business very gradually. We put a lot of time and effort into analyzing our data and improving, making the most of the feedback loop. Web publishing is anything but a get-rich-quick operation. And if you want to get rich slow – you have to be smart about what you’re doing.
We try to diversify
With such a volatile business environment, diversification is a crucial strategy. We aim at diversifying our traffic sources, as well as our revenue sources. Diversification does come at a cost, so it’s essential to find that sweet spot where you’re lowering the risk without wasting too much time and energy in the process. You can read more about our diversification strategy here.
Staying alert and on our toes
This is a very technological niche, and as such, changes are fast and furious. You just have to stay on top of things at all times. Follow YouTube channels, read blogs, listen to podcasts, participate in Forum discussions. I try to do all of that to keep up with the current industry trends are. Keep your eyes on the ball, and never assume this is a passive income channel. It isn’t.
As always, leave me a comment and let me know what you think. Have you experienced any of these situations? Any tips to share on how to prevent these risks? Nothing would make me happier than figuring out how to reduce our risks even further!