How Do Websites Make Money?

I’ve come across a presentation put together by Flippa with the last years (2012) website sales data. Even with the current year ending it’s very valuable information on how websites make money. Some of the most important takeaways from the presentation are the following.

The average site site earns $133/mo with a bit over of 2,000 monthly uniques, that is $0.04 per unique. The average sale was $493 at 8x monthly income multiple. This greatly varies based on the type of a website, but it gives us a pretty good rough baseline on what to expect any particular site to earn. And more importantly to check against your own portfolio of websites to see how they fair against this baseline and if there’s a possibility to improve. Because, hey, if your sites makes $0.01 per unique which is 4 times less than the average, maybe there’s unrealized potential to monetize better.

The next interesting takeaway is that the most revenue per visit yielding niches are business, services, finance, and internet marketing, while the least yielding are gaming, news and entertainment. Nothing surprising there, except for the fact that internet marketing niche sells at the lowest revenue multiple. That shows websites in this niche tend to be short lived.

The types of websites are dominated by blogs with ecommerce as distant second. Blogs, however and obviously, yield lower revenue than ecommerce, with forums being the hardest to monetize.

As far as monetization, Adsense is the number one way to monetize, followed by affiliate programs (Amazon, Commission Junction and Clickbank being the top 3 programs).

Finally, WordPress rules as the top platform for a website.

2013 will have changed some of these numbers and trends but I don’t really expect big changes. The eye to keep on is on the most important stats, that is the revenue and traffic.

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