The 24-7 Wall Street blog analyzed what makes a blog valuable and came up with The Twenty-Five Most Valuable Blogs, offering some insights into how to value your own blog.
I’ve written on the topic of selling your blog in Selling Your Blog: What Are Buyers Looking For, Selling Your Blog: What Goes Into the Selling Price, Can You Sell Your Blog?, and How to Buy or Sell a Blog, and my research came up with a list of things buyers look for when considering buying a blog. It’s also a good list of things you should be aware of and doing with your blog to maximize profitability.
However, the biggest challenge in determining how much a blog is worth is putting an economic and investment value on blog elements and marketing techniques. Douglas A. McIntyre admitted the same challenges, saying:
There is no way to accurately put a value on blogs and blogging companies. All are privately-held and, as is true with many content businesses, the value of the company is based on what a buyer will pay.
With this in mind, they put together their list of top 25 blogs by using Alexa, Compete, and Quantcast for their statistics and traffic numbers, estimates based upon advertising revenue and income from related businesses, public data on a blog’s ad rates and rate views, then turned these into usable numbers:
Our estimated page CPMs are based on quality of ads and number of ads on each page. We looked at margins based on headcount and our opinion of how may of the people are full-time. Current growth rate based on our measurement sources was also taken into account. A site with traffic doubling year-over-year was give a higher multiple than one with flat traffic. Because not all blogs make money, we looked at multiples of operating income and revenue. These are completely estimates because of the tiny number of blogs which have been sold and lack of information about what the multiples may have been.
Let’s look at two examples they’ve included in the list to determine their value.
Gawker covers news and gossip from Manhattan in New York. McIntyre estimates their value at $150 million based upon:
- Combination of networked blogs.
- 30 million unique monthly visitors.
- Traffic doubled in the past year, a sign of growing market and demographics.
- Estimate of 1 1/2 page views per unique visitor generating $20 per page CPM value.
- Low overhead and staff might conclude increased profits and profit value.
The Huffington Post is a news and opinion blog which McIntyre estimates is valued at $70 million.
- Website claims 4 million unique visitors and $7.5 million estimate for the year.
- Rank and traffic climbing due to interest in US politics coverage.
- According to estimates, traffic is up 245% in February from the same month last year.
- Political opinion and coverage is currently the hottest content commodity they produce.
The comparison of these two blog companies is interesting. Gawker continues to deliver content the readers want and are searching for, and continues to attract attention and build readership. Huffington Post could be riding the narrow niche wave of the current fascination with politics. Their political bloggers and news have become the biggest source traffic and revenue. Yet when the election cycle ends, what next? That’s a very good question.
McIntyre predicts income will fall as visitors drop by 2009. He and his team believes the current interest trend may have peaked and traffic will drop once the election is over. Huffington must replace content with new trending interest to maintain traffic levels. Huffington Post understands this issue and is working hard to explore and build other traffic revenue generating content, planning and strategizing their blog’s future. What are you doing along this line with your blog?
While this example is larger scale, bring it down to a smaller blog level after they’ve just been dug by Digg. Traffic spikes through the roof, but if there isn’t content on the site that encourages Digg-driven traffic to stay and return, the traffic is transitory and the blogger is back to where they were in the first place. What next?
If your blog is now covering politics or the latest trend or fad, are you ready for when it ends?
While this list gives you some insights into what is working and not working on these big money blogs, what can you learn from this list to use on your own blog?