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Will It Make Money? Top 3 Considerations

Every single day I probably come up with three or four new ideas for websites. Every single year, I probably come up with three or four good ideas for websites. So how do you separate “good” ideas from “notsogood” ideas? There’s definitely a process, which most experienced developers/marketers do without even realising it. I’m going to try and outline my thought process and some of the tools I use to judge whether ideas make it to the web or to the recycle bin.

Consideration 1: Has it been done before?
Sounds obvious, huh? I really hate pissing on peoples’ parades, but working as a consultant I’m probably approaching triple figures for the amount of times when I’ve been told about the “next big thing”, only to have to show people a Google search result page with a dozen established websites already.

If you’re planning a fairly large project, it really does pay to load up Google and hammer it with everything you can think of which might possibly be related to your idea. Oh, your idea’s been done before? No, biggie – My mantra here is: Do it different, or do it better!

Different? That doesn’t just mean the core idea! For instance, you could do the basic idea but target it at a different audience. A great example of this is Sphinn.

Sphinn versus Digg?

Well, here’s the thing – there’s isn’t really a “Sphinn versus Digg”. Sphinn isn’t very much different from Digg at all, however it is aimed at Internet Marketers, which is a crowd that isn’t always welcomed with open arms over at Digg. It seems obvious now, but what would your first reaction be in a pre-Sphinn world if someone came to you and said “I’ve got this idea for a website, it’s a social site where people vote on news stories and…”? It would have been very easy to scrap the idea without further thought.

Better? Surf the web looking for opportunities, just how Danny realised that Digg could be better for search marketers, I could go and find a list of 10 sites now which I could use and say “this really could be better if…” – that’s where these “simple but great” ideas come from. Who 2 years ago thought MySpace would be being dominated by other social network site?

Facebook was not designed as a competitor to MySpace, it began it’s life in the halls of Harvard as a way for students to connect with each other. The idea slowly expanded to more ivy league schools, then universities, then companies, until it has reached its colossal size today. The idea started out with similar premise to MySpace, but again a different audience. It just so turns out it performs the function of MySpace, but in a much better way: Greater connectivity and less spam (for at now at least).

This is one of the reasons we can see MySpace’s brand searches suffer in Google as people leave in their droves and head for Facebook. You can see around 2007 MySpace really began to suffer and has started to decline in search popularity, which spells out a bleak future for them. I don’t want to get into a big MySpace vs. Facebook debate, I want to say: it doesn’t matter how big your competitor is, if you can do something genuinely better, you’ve got a chance.

Consideration 2: Intelligent monetisation

There are a whole bunch of ways you can make money from a website and one of the biggest mistakes I see is people just defaulting to the Adsense crutch. Don’t get me wrong, I’m a big Adsense fan, but it has its uses and it’s certainly not a silver bullet solution for monetisation.

Before you even get into monetisation, you should ask yourself the question; should you be trying to monetise a site from the kick off anyway? Obvious monetisation can adversely effect the credibility of your site, or worse yet – drive users away as you sell off the traffic that you’ve worked so hard to draw in.

I’ve mentioned before, I don’t use Adsense on this blog – and I think it’s a pretty good example. I don’t do sponsored posts, sell links or show Adsense because all of these things would drive users away from my blog, which I’m writing to get them here in the first place! I want you here to read this information, not con you into coming here for a few vague tips just so I can pawn you off to the highest bidder.

I imagine most of my readers will know about Adsense, so most probably won’t click on it anyway – so I won’t make much money. I guess I could blend it in and maybe get a few misclicks, but what’s the point in that? When I recommend certain products, or schemes I sometimes use an affiliate link, which I mark as (aff) to let people know what it is. This way, I add value to readers, not trying to get them to buy/subscribe/use something that’s not relevant to the post. If they have to look at it anyway, why not use an affiliate link? They would perform that action anyway. Marking the links with (aff) is just my way of communicating to my readers that they have the option of typing in the URL if they really don’t want me to get a commission – that’s their choice at the end of the day.

If you can “build in” a monetisation stream to your site, i.e. make it part of the integral process that 1) does not require the user to do more than they usually would and 2) still sees the user perform the actions you want them to, you’re on a winner.

There are tertiary methods of generating revenue, which can be very lucrative – but will never be core to functionality, such as CPM (cost per thousand impression) banners. If you run a community based website with 1000 uniques per day and an average of 10 page views, there’s a fair bit of money to be had from site-wide CPM advertising. There’s even more money to be had if you can directly sell these banner impressions to interested parties, rather than the sometimes rather low-paying CPM networks.

Do you like banners, though? When was the last time you went to a site and you thought “Wow, I’m really pleased that banner advert is there!” Rarely, probably never. As a rule of thumb people don’t like banners – however, they can pay the bills, so there has to be some kind of balance.

In the above example, we’re talking about building a community site, which is a damn hard thing to do – to reach that “critical mass” of users, where your user count will self-replicate and you don’t have to have your foot on the pedal to keep the thing alive. So, at these tender stages of your website’s life, is it a good idea to expose people to banner adverts? Unlikely.

Monetisation can be a bit of a gamble and there’s loads of examples we could work through, but there’s a few key rules to keep in mind:

1) Can you integrate your monetisation into the core functionality of your site?

2) Should you be using “push” monetisation straight away?

3) How will your users react and interact with different monetisation streams?

4) How do other sites in your niche monetisation their presence?

5) What actions do you want a user to take on your site and does your monetisation work against these?

6) Have you considered:

> Affiliate deals to monetise content
> Contextual advertising such as Adsense, Adbrite, PeakClick? (CPC)
> Cost per thousand impression (CPM) advertising such as TribalFusion, Casale, BurstMedia
> Having other sites or companies sponsor sections of your website?
> Does your site give to voluntary donations?
> What about subscription based systems?
> Can you monetise RSS or syndicated feeds?
> Can you do sponsored content? (Nofollowed of course!)

What I’m tarting on about is that you can’t make anything without visitors, so put them first. Maybe I should have just written that half an hour ago? (:

Consideration 3: Time vs Profit Ratio

Avid readers of my blog (I love you guys), will know I’m a big fan of “quick buck” ideas. These are ideas which are quick and easy to implement and will earn you a bit of pocket money. When building a web portfolio, diversification is the key factor to income stability. Although I have a few “battleship” sites, I’ve also got a million dingys floating about, so if a few Google bombs go off here and there, I’m still in pretty good shape.

A lot of people ask the question “I want to make money online, should I make one big site, or loads of little ones?” My answer is, both! (and everything between them for that matter). Small sites are a great way of testing ideas, monetisation streams, SEO techniques, designs, you name it. You can increase your overall chance of success by lowering risks early on. If you spend all of your time, money and resources on building your first battleship site and for whatever reason, it sinks – that leaves you in a nasty place. If you can get up and running with a few quick wins, you can use this revenue as a “margin of error” to play with when working on larger projects.

My most successful “dingy” site took about 20 minutes to build, about 20 minutes of promotion and it makes about $300 a month, with no work whatsoever. I’d say that’s a pretty good investment, by whatever yardstick you’re using. So what makes a “dingy” site?

It’s not size that’s for sure. Some of the quickest projects may be database driven sites with a million pages that are built just to catch long-tail queries. I generally class a site by three factors:

1) How long it will take to build, design and develop

2) How many visitors it will take to make the site consistently earn money

3) What ongoing maintenance and time will the site take?

The first is fairly simple and easily written off. If you’re confident you can design and develop the site, you’re onto a winner. A lot of the time, it’s easy to pick up a CMS such as WordPress, Drupel, Joomla or Pligg to smack a site together in no time. A real issue is how many visitors is it going to take to make the site earn money? This depends on our earlier points about monetisation streams, if you’re relying on CPM – it will take a hell of a lot, if you’re relying on single high paying affiliate commissions, probably not so many.

The most important by far for me, is what time, on an ongoing basis will this site eat up? As much as I love community type sites, they take a bastard amount of TLC to get off the ground. With many projects on the go, you really need to do some time planning to make sure you’ve got enough spare (or can outsource), to see these things through. An early mistake I made was building loads of sites and not giving them the attention they needed to grow. You won’t be getting a second chance to impress with a lot of visitors, so make sure you’ve got resources to spare to make it work first time round.

If however, you spend a little more time, you’ll see there are loads of drag and drop projects that you can set up and leave running at no more time expenditure.. Quick wins, like Google navigation queries (:

I hope these seeds give you some solid logic to build on. To be honest, I was going to do a top 5, but I’ve just moved house and I’m on “free city wifi” until I get broadband installed here. Unfortunately “free shitty wifi” would be more accurate as I’m getting about 33.6kbps modem speeds (remember them??). Oh, I’ve also got some dingys to inflate (:

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7 responses to “Will It Make Money? Top 3 Considerations”

  • Michael Lodispoto says:

    On Consideration 3 – I’m new to the online world but put this into practice for about 15 years off-line and now doing it online. Having many avenues of revenue is very important. One thing that I would love to add to your great article is don’t just look for that quick buck, although fast money is fine.
    In the off-line world I started many businesses and always with the intention of planting a seed. I didn’t go for that big bang all at once but focused on the employees as well as giving the best services ever.
    This translates into internet businesses and sites as well. I am already seeing is as most of my off-line businesses now get more clients just from word-of-mouth than from advertising. In fact of my businesses 4 of them I no longer even advertise – they exist completely on referrals. The key to this is to not only the best service and to do more than expected ( as a rule), but also to make it within their interest to promote your business or services.
    Case in point: Let’s say you are a web designer .Maki touched on this with one of his submissions to Sphinn.com
    As a webdesigner it makes sense to make the best damned site you can, but also tell your client that for every client that is referred to you, you will either discount any future work substantially or even pay him back in chunks ( depending on your pricing) the money he spent on the site.
    You can also make sweet side deals whereby instead of paying the full price, perhaps a small alliance of sorts where he puts a page on his site ( you do this if you are the designer) that showcases your services and offers a discount to anyone who takes them up on it.
    The result of this is in a very short time, your advertising budget can decrease to almost nothing!
    People will work for you if they love your work, but they work hard and really do go out of there was for you if they can also profit.

    Comment by Michael Lodispoto
    December 5th, 2007 @ 7:56 pm

  • Carlos P says:

    Regarding point no. 2, intelligent monetisation in communities. Something that has worked for me is taking away the ads(high visibility ads, like Adsense or CPM Banners) for registered users. This will maintain your community happy, lead more registrations and you will be making the same amount of money you did by showing them to your loyal registered users(with CPC), since they will become ad-blind and most likely never click on any ad in your site.

    Nice article, btw.

    Comment by Carlos P
    December 5th, 2007 @ 9:15 pm

  • extreme webmaster says:

    I agree with you on most of these points. And yes, there is still opportunity to build “battleship” websites, because there are still subjects on the Web that haven’t been covered at all (yes, yes!) or haven’t been approached from a different angle. Setting up a website in 20 mins is cool, but I’m a perfectionist and so I tend to work on something until I’m satisfied with it.

    Where did you get those funny pictures (they are great – uglydolls)? :)

    Comment by extreme webmaster
    December 5th, 2007 @ 9:22 pm

  • Paul says:

    What an incredible post. Thank you for this. What do you think is the best way to get a new website?

    Comment by Paul
    December 7th, 2007 @ 8:01 pm

  • Craig says:

    As always great post Mark, and pics are funny too.

    As EW said above, what if you are a perfectionist? I most likely have that problem. I can₄t sit down and start ₓinflating some dingys₝, because they would turn into too big project anyway (if ever possible). That would of course compromise the whole idea of a dingy and most likely not be profitable at all.
    But I guess it is my own personal problem (shhh!).

    I will be left trying to set for a battleship or two than.

    Comment by Craig
    December 10th, 2007 @ 3:03 pm

  • Susan says:

    Just not sure that I personally can say that starting small sites to test the waters is a great idea. You never know what you have till you try it out.

    Comment by Susan
    December 11th, 2007 @ 10:54 pm

  • Nik says:

    Very nice post with great resources ! I didn’t have any monetise success yet but I don’t give up ! I consider building a better blog first and then trying to monetise it. By the way, it’s not Drupel but Drupal 😉

    Comment by Nik
    January 3rd, 2008 @ 12:19 pm