adwords to adsense site - what is it worth

[Patrick Berry]

anyone wish to share there views on the followong..

a theoretical site.

buys all its traffic. all of it.

it is a site with adsense on it (but extremly easy to change to other)

adsense revenue minus paid for traffic = monthly profit.

What multiple to put a value on this theoretical site ?

[bhartzer]

I know plenty of people who have bought traffic via Adwords and tried to turn that traffic into revenue via Adsense. From what they tell me it doesn't work.

The key is finding keywords where you can pay a very small amount and make a lot more from the clicks on the Adsense ads. There's not too many industries out there where you can do that.

[Patrick Berry]

cough cough, i am talking about a theoretical site that already is doing this.

so my question is what multiple to apply to monthly NET earnings (theoretical earnings of course) as a valuation point.

[bhartzer]

To put an actual monetary value on a website, I would take the net monthly profit and multiply that times 6 (six months to recover the investment).

[Jenstar]

It would be hard to value it because click abritrage is so subject to market conditions - price you can buy traffic at, competition, what the AdSense ad targeting is like, is it affected heavily by smart pricing, etc.

[tomslick]

If I had to peg a multiple to it, six months of net earnings sounds conservative, considering how quickly things change in our wonderful industry.

[Patrick Berry]

and how many months of consistent net earnings would be able to push the multiplier little higher?

I realise the ppc adsense arbitrage model has its unknows - but any site that shows income consistentancy must have a value.

[neatorama]

I realise the ppc adsense arbitrage model has its unknows - but any site that shows income consistentancy must have a value.

How long has it been consistent?

[Patrick Berry]

theoretically the ROI is consistent, the net profit not. If you spend more on adwords more net profit achieved.

7 months.

[lorenbaker]

It does work, you just have to hit the right market at the right time.

And if you purchase targeted paid search results for high click AdSense oriented sites, the conversion % of the target site should be quite high, since the majority of traffic is from precise, geo-specific search queries.

[neatorama]

It does work, you just have to hit the right market at the right time.

I agree. The crux of the matter is the second part of that statement. "Right time" can change at any time, so there's actually little stability to this type of arbitrage.

Remember when G changed adwords terms and conditions so 1 ad displayed = 1 landing page? That booted a lot of affiliate marketers off. When will it be for adsense arbitrage?

[fajitamaster]

I believe that this is possible. How soon, should be your real question. Why? Well, when it comes to marketing, you need "conversion". That is, how much of the traffic will come back to you. This might be a small number depending on the product that you are involved with. But with site with definite repeating customers, than Adwords traffic ---> Adsense revenues is possible.

The basics is a curve that represents Investment... another curve is drawn which represents profits. When the two curves merge, you will be "breaking even". This is not a one day thing... but probably a couple of weeks to months. In other words, when your user base is huge your profits will follow, and this is the tale of two profits. Adwords and Adsense are profitable! Initially it might cost you 1000 dolllars to get 33,333 visitors (.03 PPC). If you can convert 25% to return to your site free of charge, you could theoretically get 8333 customers from 1000 dollars. Now, 8333 customers could theoretically generate $20-$30 a day. At the end of 30 days, you could have something close to the initial investment. By the end of the second month, you could potentially have "pure" profits.

Just my 2 cents

[AussieWebmaster]

Originally Posted by fajitamaster

I believe that this is possible. How soon, should be your real question. Why? Well, when it comes to marketing, you need "conversion". That is, how much of the traffic will come back to you. This might be a small number depending on the product that you are involved with. But with site with definite repeating customers, than Adwords traffic ---> Adsense revenues is possible.

The basics is a curve that represents Investment... another curve is drawn which represents profits. When the two curves merge, you will be "breaking even". This is not a one day thing... but probably a couple of weeks to months. In other words, when your user base is huge your profits will follow, and this is the tale of two profits. Adwords and Adsense are profitable! Initially it might cost you 1000 dolllars to get 33,333 visitors (.03 PPC). If you can convert 25% to return to your site free of charge, you could theoretically get 8333 customers from 1000 dollars. Now, 8333 customers could theoretically generate $20-$30 a day. At the end of 30 days, you could have something close to the initial investment. By the end of the second month, you could potentially have "pure" profits.

Just my 2 cents

This is the key to long term sucess as I see it and am starting to experince....

[Grokodile]

I don't have much to add, but I can't believe how quickly I learned something useful on this site...