Wisdom of Fans: http://wisdom-of-fans.com

The site aims to predict the outcome of events (starting with the World Cup) based on the input of many. Wisdom of Fans collects peoples tweets about various events and then converts them into one “mass” prediction. The idea is that the many can be more accurate that the one (i.e. football pundits).

1) Networking does work. See my last blog post here and a  slightly more impressive post from Ray on the same topic here.

2) The agenda looks pretty nice once again. A lot of the sessions you can take away a list of actionable tasks that can make a real difference to your sites. I also find that a lot of the sessions just get me thinking about new ways to market my sites or new niches to enter.

3) A bit of a lazy one this. I am actually Berlin based at the moment, so this is almost on home turf for me.

4) Meeting great people. Working as a lone affiliate can be uninspiring at times in terms of one not getting to bounce ideas off colleagues so i find it really important to get out and about and meet like minded people. My greatest worry before attending my first expo was that i wouldn’t know anyone or have anything interesting to contribute. However there are loads of parties and networking opportunities running throughout the day and by the end of my first night i had already met loads of interesting new people who i still keep in touch with today.

5) I get to try out my new German. I have been taking an intensive German course since January so this might be the perfect opportunity to try out my three new words.

Conferences can be expensive. Once you factor in the price of the ticket, transport, hotels etc then it can be easy to question whether this is really the best use of your hard earned cash. I recently pulled some numbers from my Mothers Day campaign for 2010 and was pleasantly surprised to see that my last attempt at networking has paid some pretty nice dividends.

Last October i attended the A4uexpo in London. The ticket cost me £171.35 plus flights, hotel etc. At the conference i got to meet with the affiliate manager of a program i was producing some decent results for. After a short but productive chat we agreed to run several promotions across my sites which included banner placement, increased exposure, newsletter placement etc in exchange for a unique promotional offer that i could give my readers.

So here are the numbers for the 14 day period running up to Mothers Day.

2009:

Sales: 175
Commission: £253.07

2010 (after the networking):

Sales: 725
Commission: £1076.48

So who will be joining me at the A4uexpo in Munich this May?

So firstly, the site is still mine. Offers have come in, but nothing I would be willing to accept. If you missed the post about the sale then you read it here.

Is price set too high?

I have been in touch with 10 “serious” people about the site so far. Sure a number of them claim the site is over-priced (I guess all buyers do). The reasons vary from “websites rarely sell for more than 15X monthly profit” to “if I can’t determine where your sales come from (ppc/seo) then I can’t pay your asking price”. I am in the fortunate situation of not needing to sell the site, so people looking to push down the price are out of luck. Let’s take a look at a few of those arguments and I’ll give my two cents on them..

1) A Site is worth a max 15X monthly profit.
At the beginning of 2009, before I left for 9 months of travelling I considered selling the site. I wasn’t sure how much time I would have to update the site, and how much it would therefore suffer in terms of earnings. If I had taken 15X the monthly profit of 2008 then I would have sold the site for £83k. In the end profits for 2009 were roughly £85k, so it would have been a poor decision to sell. Sure that might not happen next time there’s such a decision to make, but I have faith in the site I’ve built and in my mind anything less than 24X monthly earnings is selling the site unnecessarily cheaply.

2) How much profit comes from PPC and how much comes from Organic.
Since I’ve provided a full revenue breakdown including ad spend, I don’t get how not knowing this information lowers the value of the site. Sure you can stop the ads, but my figure of 85k is profit not revenue, it’s after ad spend. If the new owner didn’t want to spend a % of the revenue on ads then that’s fine. However I am providing the buyer with my full adwords campaign, and the seo traffic has been consistent throughout the life of the site. Surely it is better to have 2 or 3 sources of traffic than one? I know the PPC annual spend sounds scary, but as the site is very profitable then it makes sense to keep running it and putting some of that revenue to work, and if not then the buyer could make their money back faster by improving/stopping the ad campaigns. This will be my next project should I keep the site, to get a better idea how much revenue comes from PPC and Organic traffic.

Why hasn’t the site sold yet?

Kieron sold ukoffer in 2 days. Spendlessonline is still available after 1 month. What is the difference? I reckon it is mainly down to 2 (maybe 3) factors.

1) Kieron has a huge network. He is well known and trusted within the industry. Aspiring affiliates look up to him, so if he is selling one of his former projects then there is bound to be a lot of interest. On the other hand I am relatively unknown, and whilst the blog post about the sale of the site was popular, I don’t think it got in front of enough eyeballs.

2) Spendless is over the magic 100k price barrier. I think this means that is it too small for any big investment companies to be interested in, yet too much money for most individuals to afford. I did have 2 people very close to buying the site but both couldn’t get the loans approved from the banks. Maybe pre credit crunch those sales would have happened..

3) UKoffer has been around since the dawn of time. Spendless is just comfortably middle aged.

What next?

The good thing is that I still have a fair number of options open. I have had a broker in touch who would work on a commission only basis to try and sell the site. This might be next best approach if i am still looking to sell.

But is selling the best option?

I have had loads of brilliant emails from people offering advice. A lot of people have been questioning if it a good idea to sell. One of the best bits of advice came from the awesome John Lamerton who has been there and done that. John raised the interesting point that it is great to have the money in the bank but then it can be quite a struggle to find new revenue streams. See blog post here.

The other major issue is tax. I live and pay taxes in Germany. And as is the way in Germany, they like to tax you on EVERYTHING! Having spoken to my tax advisor it turns out that i would have to pay 45% of the sale price in taxes. Ouch. Not ideal.

So the other option is to keep the site and just scale up the outsourcing. Chatting with potential buyers is a great way of honing where the site needs to be improved. If the day to day running of the site was taken off my hands then I have several exciting projects to help take the site to the next level.

Wow, long post. Anyone still reading? Any feedback/comments would be appreciated.

The new a4u has been live a few days now and one of the most improved sections is “The Pool“. Previously you had to wade through the constant onslaught of network promotions as the blog section was fed via RSS. Now that The Pool is fed via user submissions 99% of the articles seem to be interesting and relevant. There has also been a change in the way articles get voted on. Previously if you liked an article your name/gravatar got associated with it, and likewise if you “disliked” and article. The advantage was that it quickly becomes apparent when a blog post was being “spammed” to the top, but it might have put people off either voting against the post (as they don’t want to appear negative) or voting for it (as they cant be associated with the post for whatever reason).

The new system is totally anonymous which in theory should rectify the aforementioned problems. However, what seems to be happening is that more people are voting down the articles (it could be part of the algorithm that you lost points over time…). You just have to go to page 2 of the 4 pages of submitted articles to find posts in the minus points.

I know “The Pool” is new and the guys at the A4u are working hard to get the best algorithm in place to display the best content, but in my opinion this industry needs positivity over negativity. So is Anonymity the way forward?

I thought i would give a shout out to the fantastic Affiliate Future Mothers Day Resource Centre. Available from the home page of your Affiliate Future account there is all the information you could possibly need to make sales this Mothers Day.

“There are plenty of incentives, landing pages and increased commissions to really help you ramp up those Mother’s Day commissions.”

Offers/deals/landing pages etc are grouped into really helpful categories such as Flowers, Chocolates, Experiences etc and are all just a click away.

The good news is the snow is still here in Berlin. Check out some of the icicles that are forming!

***UPDATED*** (08.02.10)

After much deliberation I’ve decided to sell spendlessonline.co.uk which is one of the longer established voucher code websites (launched in 2006). Building it was a great experience and it’s still not reached anywhere its full potential, although it makes a very tidy and growing profit every year. While you might read about websites for sale every now and again that shout from the rooftops of their massive earnings potential, returning visitors, ninja seo optimization etc etc, I think the stats for Spendless speak for themselves. It’s always been growing, with increasing profits, it’s well branded and professional, has never had a google penalty or drop in traffic. It’s reliability was a strategic decision, not to focus or rely on one specific merchant, in fact I’ve 1036 listed (so there’s still a few thousand more you can add) and make commissions for over 250 different merchants every month.

Selling it is a hard decision, because I know it’s not reached its peak. But I’ve other projects I want to pursue, such as the MBA that I plan to enroll in for this year. How much you should value a website for is a hotly contested topic. Following the advice of Kieron and the sale of ukoffer.com, I’ve also gone for 2 years profit which is £171k.

Let’s take a look at some stats:

Unique Visitors:
2006: 10,478 (from Oct-Dec)
2007: 79,971
2008: 340,282
2009: 662,781

Profitability:
Here you can see the profits by looking at revenue minus my ad spend.
2006: £1,380 revenue – £413 ads = £967 profit
2007: £20,887 – £6350 = £14,537
2008: £90,940 – £24,415 = £66,525
2009: £137,380 – £51,633 = £85,747

It’s not all about affiliate revenue, the site has also won a fair few prizes, including Philips 32 LCD TV, Bose DAB/CD Wave Music System, Philips 19” Widescreen LCD TV, Laurent Perrier Champagne, Dulux PaintPod, Sony 10.1 Cyber-shot camera, Sony DAB HiFi System, Thorntons Hamper, £100 Schuh voucher, £100 Totally Gifts voucher, £50 Red Letter Days Voucher and many more.

Inbound links according to Yahoo! Site Explorer: 3080

If that’s not already convinced you, let’s look at some of its key strengths…

SpendLess’s key strengths:
1. Age of domain/site. Goes back to 2006. Older than MVCs and VC.co.uk
2. Consistent growth in the face of ever growing competition. (See stats above)
3. Varied sources of traffic, not reliant on any one source.
4. Great Design + site runs on WordPress so easy development.
5. Varied sources of income. Not reliant on any one merchant (1036 listed, approx 250 convert regularly)
6. Full PPC list of keywords included in purchase (including 6128 negative keywords)
7. Lots of mutually beneficial exclusive codes already in place for esteemed merchants in high value sectors such as (Interflora, RedLetterDays, Match.com)

Future potential of Spendless:
1. Site currently features 1019 merchants. Most voucher sites have over 3000 so there is plenty of space to expand niches where I’m already ranking successfully.
2. SEO is not my strong point, I would not say the site is highly optimized, vastly increased traffic and revenue growth could be achieved by someone with expert knowledge in this area.
3. It’s worth noting that from 2006 – Sep 2008 the site was run part time. Also from Jan 2009 – Sep
2009 I was travelling the world and only worked on it in small intermittent bursts, yet look at the growth in revenue! Way more could be achieved by its new owner working more consistently or with a team.
4. The new owner could expand to selling ad spots, this functionality already exists and this could add significant income(see the skyscraper banner on the right hand side of every deal page for example).
5. At present codes are administered via a custom built tool, however it would be possible to automate this management process by using a system like icodes or promotions.co.uk

The asking price is just two years profit, so £171k. This is fixed and non-negotiable. I would not accept a revenue split so please don’t suggest that. Of course I’d be more than happy to answer any more specific questions you might have, just drop me a mail.

***UPDATE***

A few people have been asking about the breakdown of traffic for the site. The breakdown is roughly:

45% Organic
45% PPC
10% “Other”

The growth of organic traffic has outstripped that of ppc over the last year or so as you can see in the graphs below. Any other question then send me a mail.

***UPDATE 2***

Just incase anyone is thinking i am jumping ship now that Spendless has reached its peak i thought i would add a small update. Looking at the stats for January, profits are up 23% year on year.

Neil and i run several experience day websites. We started the sites 18 months ago but since then we have both been extremely busy (Neil with his job, and me taking a small trip around the world). This means the sites are not nearly as developed as we would like (although this is one of the projects we are working on now that we both have more time). It also meant that most promotional material we recieved from experience day sites went under our radar in the run up to the Christmas period. The 2 exceptions were the Red Letter Days Christmas incentive, and Treatme.nets Hell’s Kitchen promo. We didnt really expect to have much chance in categories 1-4 (at least not this year), but we decided to have a stab at the “Free prize draw category”. In an attempt to win we gave Treatme added exposure on some of the sites, and these small changes seemed to have a big affect. Sales for Treatme.net were up 60% on the previous year and to our great surprise and delight we have been chosen as one of the winners! With the date still to be decided we will have to wait and see who gets to put on the signed whites and cook for 30 people in the Marco’s very own Chelsea restaurant.

So once again, a bit thank you to Vanessa and the rest of the Treatme team.

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