The Industry Monetization Reports give an overview of the opportunities for creating on-line businesses in a specific Industry or "niche".
The reports are built by analyzing a number of websites (also referred to as "companies") operating in a given Industry.
We focus on companies that have already achieved a good level of success, at least in bringing a good amount of organic traffic to the website.
It is a deep dive into the metrics and the methodology we use to interpret the raw datatasets.
You can find the individual reports HERE.
Table of Contents
2.1. Donations
2.2. Google AdSense
2.3. Affiliate products
2.5. Lead generation
2.7. Digital products (PDF guides)
2.8. Digital products (courses)
2.9. Memberships/subscriptions
2.10. Physical products (ecommerce, merchandise, ...)
2.11. Physical stores
3. Reporting
3.1. Website metrics
3.1.1. Measured metrics
3.1.2. Calculated metrics
3.2. Evaluation metrics
3.2.1. The 4 performance Tiers
3.2.2. Spotting monetization opportunities
1. Report structure
The reports are built by analyzing a number of websites (also referred to as "companies") operating in a given Industry or niche.
We focus on companies that have already achieved a good level of success, at least in bringing a good amount of organic traffic to the website. This guarantees they are in the position to generate revenue from their traffic.
We strive to select at least 100 websites for each report.
To select the companies for the analysis, we use Google search and tools like SEMrush.
For each of the websites we select, we then collect information about the way they monetize their traffic.
With this information, we produce the following insights:
- Industry Overview
Gives an overview of the performance of the sites in the niche; focusing on their MOZ domain authority and organic traffic. - Monetization Opportunities
Analyzes the way companies monetize their traffic and aims to spot underused opportunities (read more here). - Competitive Landscape Analysis
Analyzes the way companies rank against each other.
Based on their performance on three key metrics, companies are divided into four "tiers":
- Gold Tier;
- Silver Tier;
- Bronze Tier;
- all the "others".
For each report, the full dataset used for the analysis is available as a paid download.
NB: among the other information, each dataset also contains the contact info of all the companies in that study.
2. Monetization methods
There are essentially 10 ways (plus one) you can monetize your web traffic.
In this section I explain them one by one, starting with the easiest to implement and ending with those that require a considerable investment in terms of know-how, time, money.
We'll start with DONATIONS and we'll end with BRICK-AND-MORTAR STORES...
2.1. Donations
Although this is the easiest way to monetize a website, it is not used very often.
In fact, donations can easily backfire.
Unless you have a strong relationship (trust) with your visitors, a "donate" button can be seen as a lazy way to make money.
A donation button suggests you haven't been able to find a better way to make money with your site.
For this reason, most people avoid using one.
Websites making lots of content that feeds a large and engaged community, often use platforms like Patron to accept donations from the audience.
2.2. Google AdSense
Google AdSense (or similar advertising programs) is a very easy way to start monetizing web traffic.
All you need is to add one line of javascript in the code of the pages where you want to display the ads.
Most of the "beginner" websites monetize traffic with AdSense.
This is because it is easy and it doesn't require investing any time or money.
However, pretty much like in the case of donations, a website displaying AdSense advertising often suffers from trust issues.
In fact, serious on-line businesses avoid cluttering their sites with display advertising.
In general, display advertising is a sign that the owner of the website is trying to monetize the traffic without too much commitment.
2.3. Affiliate products
Affiliate products are another "entry-level" monetization technique.
As a matter of fact, there are hundreds of thousands (millions?) of websites built on product reviews with the sole purpose to drive traffic to sites like Amazon or Booking and cash commissions.
Some of those websites provide indeed great value to consumers and they become very successful (lots of traffic).
However, the majority of them struggles to get sustained traffic and, consequently, to reach the income level able to transforms an amateur website into an online business.
2.4. On-site sponsored ads
On-site sponsored ads are the first serious attempt at professional monetization.
Generally, this kind of ad blends with the layout of the website and it is not intrusive at all.
The owner of the website spent a great deal of effort in finding and selecting the right advertisers and in having them crafting good ads.
In some cases, sponsored ads may even enrich the user experience providing more value and relevant information.
Concerning revenue, sponsored ads can bring up to 150 - 200 times more revenue than AdSense. This depends on the niche and on how good your advertising framework is.
SUGGESTED READ: How much to charge for advertising on your website.
2.5. Lead generation
Lead Generation is a multimillion-dollar business.
The LeadGen model works by collecting data from website users and selling the information to third companies who are interested in delivering services to them.
Needless to say, one needs to obtain the permission of the users before passing their info to a third party.
When done professionally, lead generation can be extremely lucrative.
To monetize leads it is important to understand the Industry very well.
Some Industries are very hard to monetize with LeadGen (retail, manufacturing, ...), others are very easy and lucrative (finance, insurance, ...).
To being selling leads you must have two things:
- users willing to give you their information (and give you permission to share it);
- companies willing to buy that information in the hope of selling a product/service to that user.
Setting up this system might require a considerable amount of time and effort.
However, once the system is up, it runs pretty much on autopilot and it becomes almost a passive revenue stream (passive income from lead generation).
2.6. Consulting/coaching
In every niche or Industry, people need expert advice in order to make the right choices.
Depending on the Industry, those choices can be very "expensive" and this opens an opportunity to offer a fairly priced one-to-one consultation where you or your team (the experts) drive the user (customer) in the right direction.
Consulting has a barrier to entry. It is a knowledge barrier.
In fact, to be a consultant (or coach) you need to have some level of expertise on a specific subject.
Provided you have the expertise, adding consulting/coaching to your monetization arsenal is quite easy. Just connect your pages with a software like Calendly and start to book consulting calls.
IMPORTANT: for your consulting/coaching practice to be successful, you need to define very clearly what you will provide and what is going to be the outcome for your client.
If you fail to do that, no one is going to book any consulting call.
2.7. Digital products (PDF guides)
PDF guides are the first step to serious monetization with digital products.
A good PDF guide can be sold at any price.
We've seen guides sold for $5 and we've seen more polished eBooks sold for hundreds $$$.
The price you are able to sell your PDF guides for depends essentially on these factors:
- how big is the problem the guide promises to solve (in terms of money, relief, sense of accomplishment, ...);
- how engaged and your audience is and how much they trust you;
- how well your web pages convey the information about the guide and the problems it helps to solve.
Digital products are a fantastic way to monetize web traffic because they require an initial small-moderate investment and, once they are made, they can be sold over and over again with little or no supervision or effort.
This is not to be confused with passive income.
For digital products to be successful in the long run, a serious company must:
- survey the clients to collect feedback on the products;
- improve the products based on the feedback received;
- keep marketing the products in order to keep the audience aware of the products and interested in buying.
The good news is that most of the marketing activities can be automated and, with time, the products will get to a point where little improvement is needed.
With this in mind, developing digital products can be a long-term strategy to build an online business that will become self-sustaining.
2.8. Digital products (courses)
Digital courses are the next step in monetization with digital products.
Unlike PDF guides, courses can be somewhat more interactive.
Also, video courses are a form of "in-person" experience and they contribute to creating a bond with the customer.
It is not uncommon for video courses to become the stepping stone to membership communities.
Video courses can be sold at any price, typically ranging from $99 to $2000.
High-end courses sometimes provide direct access to the teacher.
This access is usually provided in a group fashion rather than 1-to-1.
Similar to PDF guides, a digital course can be improved over time, to the point of becoming pretty much self-sustaining.
2.9. Memberships / subscriptions
Membership communities are the holy grail of digital sales.
In fact, if there were two words you would want to install into the fabric of your business, these words would be: RECURRING REVENUE.
Membership/subscription communities provide just that.
Creating a membership area is not easy.
It requires an audience of a good size and a very good engagement.
Usually, companies that successfully established membership services have come a long way and they started their monetization journey with simpler services.
The typical monetization journey includes digital products (guides and courses), as well as 1-to-1 or 1-to-many consulting or coaching.
A subscription-based business if great because it provides the ability to forecast revenue for months, with great accuracy.
An accurate estimate of the future revenue allows for better planning of investments and growth.
Ultimately, once an online business has created a good follower base, it should strive to monetize the audience with a subscription method.
2.10. Physical products (ecommerce, merchandise, ...)
This is as far as an online business can go: setting up an ecommerce platform.
Now, don't make the mistake of thinking that an online business monetizing with ecommerce makes more money than a business selling just digital products/services.
Running an ecommerce requires:
- displaying properly a variety of products;
- getting orders;
- handling and processing orders;
- shipping;
- dealing with questions and complaints;
- handling returns;
- dealing with product development/improvement.
In the end, it is much more expensive than running a business that makes money with digital products. So, your profitability will depend mostly on your margins.
Some Industries do very well with ecommerce and poorly on info products.
Think for example about small and costly items (high margins and easy to deliver) with not much opportunity for teaching people how to use them... JEWELRY!
Some other Industry does really well on info products and very poorly on ecommerce.
Think for example about large but not too expensive items (high margins and easy to deliver) with not lots of learning to do before using them... HOME RENOVATION!
The lesson here is: don't jump straight into the ecommerce because you think it is going to make you more money. First, you really need to get to know the Industry, then you can make an informed decision based on the opportunities you can spot... which ultimately also depends on what your competitors are doing.
2.11. Physical stores
At this point, we are no longer talking about online business.
On this side of the spectrum, we have brick&mortar businesses that opened an online shop to support their activities and grew it to the point where the revenue from the online department became comparable (or even bigger) to the revenue of the original shop.
Very few are the cases where the physical shop was established after the success of the online platform.
Needless to say, this is not a form of monetization I would recommend.
Physical businesses are cash-heavy and involve a lot of logistics.
Think about that before you venture into this kind of venture.
3. Reporting
In a research project, the choice of metrics is very important.
We use metrics to collect and classify data and to begin interpreting them to get actionable insights.
The more metrics we use the more flexible models we can make... but of course this adds complexity to the research process.
For the Industry Monetization Reports, we decided to use 5 measured (or estimated) metrics and 2 additional metrics calculated from the original 5.
3.1. Website metrics
3.1.1. Measured metrics
- Organic Keywords
The number of keywords the website is ranking for on Google, as reported by SEMrush. - Organic Traffic
The monthly unique visitors (search traffic only), as reported by SEMrush. - Organic Cost
The monthly cost in USD if the same volume of traffic was acquired with paid ads (AdWords PPC), as reported by SEMrush. - Adwords Keywords
The number of keywords the company is currently targeting with paid ads, as reported by SEMrush. - MOZ Domain Authority (DA)
The "authority" of the domain name according to MOZ.
This is a number between 1 and 100 that gives a clear idea of how well the domain can rank on Google for searches related to its main topic.
NOTE: Adwords Keywords and DA are not directly used in the reports for the analysis.
They are however included in the full datasets to provide additional value to those who are interested to look deeper into the industry and its competitive landscape.
3.1.2. Calculated metrics
- Keywords Value (KV)
It gives a measure of the value of the keywords the website is ranking for.
It is calculated as: KV = Organic Cost / Organic Keywords
The resulting number is in USD/keyword.
A website with high KV is ranking for keywords with strong buy intent (this type of keywords have higher AdWords cost).
A site with high KV is relatively easy to monetize because people get there with the intention to buy (at some point).
This makes it easy to use sponsored ads from third companies in the same Industry or to sell directly digital or physical products. - Visitors per Keyword (VK)
It gives a measure of how good the targeted keywords are to bring organic traffic.
It is calculated as: VK = Organic Traffic / Organic Keywords
The resulting number is in visitors/keyword.
A website with high VK is either ranking in the top positions for good keywords or it is ranking on page one for the most important keywords for that niche (keywords with high search volume).
A site with high VK has great potential for further growth.
3.2. Evaluation metrics
Each Industry dataset is analyzed using a well-defined set of metrics.
These metrics are:
- monetization methods (11 data points);
- Keywords Value (KV);
- Visitors per Keyword (VK);
- Organic Cost.
3.2.1. The 4 performance Tiers
As mentioned at the very beginning of this article, the companies are divided into four performance tiers.
These tiers are:
- Gold Tier;
- Silver Tier;
- Bronze Tier;
- all the "others".
The tier classification is based entirely on the metrics b, c, d of the list above.
Here is the process we use for tier classification:
- the dataset is sorted by one of the 3 metrics, from the strongest to the weakest;
- the companies that rank in the top 20% of the sorted dataset receive an "x" mark for that metric.
- the process is then repeated for the other 2 metrics.
At the end of the process we get:
- Gold Tier = companies that always rank in the 20% (they have 3 "x" marks);
- Silver Tier = companies that rank in the 20% for two metrics (they have 2 "x" marks);
- Bronze Tier = companies that rank in the 20% for one metric (they have 1 "x" mark);
- all others = companies that never rank in the 20% (they no "x" mark).
3.2.2. Spotting monetization opportunities
Finally, the evaluation continues by analyzing how the companies in each tier monetize their traffic.
The analysis takes into account all the 11 methods illustrated above.
The analysis has three main goals:
- for new sites: to give an overview of how much space there is in the industry for more sites using a particular monetization method.
This is interesting for anyone who is considering entering this industry with a new site. - for existing sites: to give an overview of what the "big" competitors are doing and which are the underserved needs of the niche.
- for sites in the dataset: to give an overview of what the close competitors are doing and to spot opportunities for growth based on overall monetization panorama of the Industry.
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