***This one is a guest post from our friends at Empire Flippers. They’re a curated marketplace for buying and selling online businesses. Every Monday, they publish new listings. So far, they’ve helped people buy and sell over $200 million.***
Take it away, EF!
Have you ever dreamt of turning your affiliate site into a 7-figure business? What would that even look like? Although affiliate marketing is a great way to monetize a site, building an audience gives you more than just a revenue stream.
For many bloggers, the day-to-day can feel like a constant cycle of optimization and trying to find new ways to scale their affiliate site. We’ll show you how you can scale your business by focusing on building your audience instead.
Since tactics change all the time, we’ll focus on this strategy as your framework for growth. Sound good? Let’s dive in.
Why Profit Isn’t the Whole Story
Let’s be clear before we proceed—we’re not saying profit isn’t important at all, but most affiliate site owners prioritize increasing their profit margins through better commission rates.
We’ve recently seen an influx of huge tech companies that aren’t profitable but dominate their market. Their balance sheets usually show they’re in debt, but their monthly recurring revenue is an excellent indicator of how much money their businesses really make.
These types of SaaS businesses grow at such a rapid rate because they’re motivated by market share rather than profit.
They’re willing to “lose” money to build an audience. Once they grow out of the startup phase and secure VC funding, the loyal global following they’ve built up makes it hard to dethrone these companies.
And there’s plenty to learn from their success that you can apply to your affiliate site. Let’s talk about how you can build a media empire bootstrapped without breaking the bank.
Focus on Audience
Instead of ranking and banking, an addressable audience will generate much more revenue and profit for you in the long term. In addition, having an addressable audience means they’re likely to return to your brand instead of just clicking on a single affiliate link and never returning.
So what does an addressable audience look like?
It’s a loyal customer base who returns to your site or publication because of how much value you provide. You solve their problems through well-written content and easy-to-understand information that’s considered highly credible.
Once you build an audience and earn their trust, you’ll open up new revenue streams with various products.
Building an audience strengthens your brand by mitigating a single point of failure. In addition, you create a moat around your business, so you’re not solely reliant on SEO and profit margins based on which affiliate programs you’re signed up with.
Tip: For affiliate businesses worth less than $5 million, we recommend increasing your traffic diversity to start building an audience.
The issue with affiliate sites at this price range is that they rely heavily on one marketing channel (usually SEO). As a result, your growth will be gated by search engine algorithms and how well you’ve optimized your site.
So how do you get started? First, let’s see what a 7-figure media empire looks like so we can make sense of our blueprint.
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What Does a 7-Figure Media Empire Look Like?
On the Empire Flippers marketplace, the average 7-figure affiliate business looks like this:
- Average sales price: $1,318,031.50
- Average monthly net profit: $28855.75
- Average monthly sales multiple: 46.5X
Sites are valued according to a simple formula:
Average Monthly Net Profit x Monthly Multiple
The average monthly net profit is usually calculated over a 12-month pricing period to account for traffic spikes and seasonality.
A lot goes into the sales multiple, such as business age, traffic diversity, and traffic stability. All of these factors tell buyers the quality of the net profit.
If the profit figure looks scary at first glance, don’t worry—you’re not expected to reach $25k overnight. Moreover, even if your business generates that much profit, your sales multiple might be lower due to other valuation factors.
If you’re curious to learn how much your business is worth, you can use this free valuation tool to get a ballpark figure.
With your baseline evaluation in hand, let’s talk about how to build an audience.
Which Niche to Pick?
If you’re starting a site from scratch, consider choosing a niche you have some interest in and what types of products you can promote or sell.
One of the affiliate giants, Matt Diggity, shared his niche criteria, which include anything to do with health, wealth, and relationships.
As long as you’re in a niche that’s broad enough, you can make it work for you. However, remember that you’ll compete against top brands if you’re aiming for the most prominent categories.
To make it easier, consider starting in a hobby niche. Hobby niches have a lower barrier for entry because they require more specific knowledge and are generally less competitive than broader categories.
Tip: Focusing on a hobby niche that you are interested in makes it easier to generate content, as you’ll already have a grasp of the kind of language your target audience uses.
Over time, you’ll find it easier to develop your affiliate site.
If you’re stuck for ideas, you’ll probably see what other affiliate sites are doing, but you could miss out on better opportunities if you follow their trail and try to carry out their strategy.
You might see the potential to develop a SaaS or info product in your niche that few have taken advantage of. These kinds of products are great for generating a recurring revenue stream and complementing your organic reach.
But not all organic reach is equal. So let’s talk about how to use organic traffic to draw in your audience.
Refocus How You Use Organic Traffic
You’ve probably got decent monthly traffic if you’re reading this on Lasso’s site! SEO is a high-converting form of traffic, and you’re in a great position if you’ve got a lot of recurring visitors.
When building an audience, you aim to get them to come back instead of clicking affiliate links once. To encourage your readers to return, focus on how much value you give them.
Think about it as the difference between giving away a brochure or a magazine. People are more likely to throw the brochure away even if they make a purchase.
On the other hand, people will keep a magazine if it’s in a niche of interest. After that, most people will flick through for exciting content. Then, if it’s good, they might rebuy the magazine before boarding a plane or even sign up for a subscription.
Sidenote: Many affiliate sites are set up like brochures. They might have a lot of content, but there’ll be certain hero pages that generate the most views and revenue.
When building an audience, start with brochure-type content to generate momentum. So, what makes up a brochure-style site?
Narrow Down, Then Broaden Your Reach
A good SEO will tell you that you need content that solves a problem. You can start with buying comparison guides or product reviews.
The search intent is obvious; readers looking for these keywords have an idea of what products they want but need help choosing between them. This type of content is an easy way to start generating traffic and revenue at the same time.
For example, an article with the headline “10 Top Mechanical Keyboards to Start Owning in Your Games” targets gamers looking for a new keyboard.
So, you’ve got the basis for your brochure. The next step is to start building your magazine by not selling.
Expand by Focusing on Value
Expand your magazine with informational content, such as listicles or how-to guides. These are money-helpful resources instead of money-making content. So you’re fleshing out your funnel and building your expertise at the same time.
This type of content increases the trust of your target audience as they look for more solutions for their problems. The longer they spend on your site, the more likely they are to come back for more.
Value builds trust, so the more varied your content is, the larger your audience will grow. With a large enough audience, you can start thinking about diversifying your revenue streams.
Create New Revenue Opportunities
Amazon Associates is a good affiliate marketing program for beginners because Amazon has LOADS of products but not-so-great commissions.
If you’re starting out, consider Amazon Associates first. Then, you can move to other affiliate programs for higher payouts as your audience grows.
Apply for display advertising networks to monetize your informational content. The only caveat is that you need a lot of traffic to make money off of this, so don’t worry about your revenue numbers at the beginning. An increase in profit margins will scale as your audience grows.
With your content vault growing in volume, you need to broaden your reach. Affiliate sites are generally strong in SEO, and that should still be your focus for now.
Other distribution channels include paid ads, social media, and email (but not until after you’ve gotten SEO under your belt). You’ll find certain content works better in specific acquisition channels.
So that it doesn’t become overwhelming, start by planning what type of content you’ll write and which channels you’ll distribute it in. Before you start thinking about growing in reach, make sure you own your primary channel.
Outsource to Start Scaling
To expand your business and maintain growth in traffic and revenue, you need to start removing yourself from it as much as possible.
The most significant time sink for affiliate sites is content creation, which is usually the first thing to get outsourced.
Create a content production system, so you’re more efficient at generating new content. Once you have a documented procedure, you can outsource the writing. One tip to save you time and money is to hire experts in your niche to write content.
The core knowledge will be sound to edit for minor grammar mistakes instead of for accuracy. With a system in place, focus on building an addressable audience.
Build an Addressable Audience
An addressable audience can be reached at any point. Subscribers who make up this audience have given you their data and permission to contact them with new and exciting offers or content.
This can be in the form of:
- Home addresses
Gathering physical addresses can still be helpful with the right offering. One example of this is Seth Godin giving away 200,000 copies of his book on a first-come-first-serve basis—inside cereal boxes!
You can also explore using chatbots and SMS to gather data and reduce the sales cycle.
Sidenote: Keep in mind that these two distribution channels can be pretty tough to set up and require you to have a big enough brand name to make it worthwhile, so look into them when you get big enough.
Email lists are among the most potent assets for affiliate sites (and online businesses in general). This is because there’s less risk than other outreach methods, and there’s so much utility when you segment your email list.
A mix of the above methods is great, but we recommend you build an email list for the long term. How do you get people to sign up for your email list? By focusing on providing value.
Make Every Email Count
Use lead magnets such as:
- White papers
- Free guides
- Long-form content
If people are interested in your help, you can build relationships with your audience through high-value content.
Lead magnets generally tend to be things so valuable that you can productize and sell them. By giving away great content for free, people are more likely to offer their email addresses in reciprocation.
As you grow your audience with the email list, you can drive traffic to your site and vice versa.
After analyzing your newsletter’s performance, think about targeting certain parts of your audience who respond better to specific content. Then, create segments of your audience to focus on and start building content specifically for them.
This way, you grow your audience in stages instead of trying to please everyone with generic content. After you overwhelm your audience with value, it’s time to focus on traffic and revenue expansion.
Start Hiring and Building Your Team
Maximize your systems and business potential by building an in-house team. It’s cheaper in the long run, and investing in personnel gives you more room for growth.
Hiring a content manager is a good start. Unfortunately, while job boards like Indeed, Monster, and LinkedIn are recommended for reliable searches, people often overlook Reddit.
Tip: You can message the mods for your niche and ask for their permission to post a job opening to ensure you don’t violate that subreddit’s guidelines.
Your content manager doesn’t have to be the best content creator; just passionate about the niche and has a good eye for it.
Create an Editorial Calendar
With your systems and teams in place, you can start becoming more ambitious. Regroup and conduct a content audit to gauge which types of content have performed well.
Then, focus your keyword research around specific trends, and tailor your marketing strategy around evergreen topics.
With your topics planned out, create an editorial calendar to schedule different pieces and types of content on your various distribution channels. You could even create a pillar content piece and repurpose it into other assets for your multiple verticals.
To measure your marketing campaign’s success, you’ll need to track certain metrics to see if you achieved your KPI and production goals.
Some KPI goals could include:
- Traffic numbers
- Conversion rates
With content marketing, no one company’s goals will be the same as another. For example, you might be focused on boosting your CRO for specific landing pages, whereas your competitors are focused on traffic volume.
Examples of production goals include:
- Write X number of articles
- Record and upload X videos on YouTube
- Post X times on social media
And there you have it! Hopefully, this roadmap will create a solid foundation to help you scale your affiliate site to the next level.
From here, you can branch-off into eCommerce by fulfilling orders for the most popular products on your site. You could also create your own affiliate program or hire an affiliate manager to manage partnerships with affiliates.
We’ve seen many 7-figure businesses on our marketplace follow this strategy in some shape or form. Buyers realize these sites are valuable long-term assets. It’s why we can close these deals within 46 days of a million-dollar business being listed for sale.
For many, building an audience breaks the growth plateau for traffic and revenue. Even if you don’t hit 7-figures as quickly as you’d hoped, you’ll likely reach a high 6-figure value.
At that point, you can continue scaling your business or think about exiting for a considerable amount of capital. Just remember—move the spotlight onto your audience, not your profit.
Still curious? Read this.
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