Value Creation For Newly Acquired Websites

Acquisition Integration Playbook

If you’re reading this article you’ve most likely acquired an established website, either as an investment or to accelerate the growth of your existing business . Congratulations and welcome to the club.

Websites are placed on the market for a wide variety of reasons. The overall quality of a website can vary significantly, depending on the strengths and expertise of past owners. Many websites also bear the scars of past sins: black hat SEO and cyber-security attacks. They may have been well maintained in their final days (groomed for sale) or experienced several years of neglect as their increasingly disengaged creator moved to other projects.

The good news: fixing these issues often yields an immediate lift in traffic & revenue.

Integration Goals & Objectives

As an investor, I have several objectives for the integration process; these apply to both purchased sites and properties we’re promoting up from a “farm team” of startup sites.

  • Assess the overall health of the digital publishing business model
  • Identify and fix any significant past sins (cyber security, broken capabilities)
  • Replace any affiliate links (with our own) and purge any SEO-related links.
  • Migrate to a better ad network (Ezoic often pays 50% – 150% more than AdSense; our review is here)
  • Speed up the Site (install the right theme / plugins, shift onto Ezoic’s free CDN)

This list is specifically focused on content and affiliate sites. Additional steps are required for a product or services website (e-commerce, FBA, SAAS) that are beyond our scope.

A fifth task, which can move at a slower pace, involves a full audit of the existing SEO strategy and looking for any content development and affiliate marketing opportunities. Depending on the strength of the site, you may be able to quickly rank for other topics. Don’t underestimate this opportunity: fresh content in the right spots can skyrocket your revenue with minimal effort (most of the work can be outsourced at a reasonable cost).

Assess If the Business Model Is Broken

There’s a reason you’re being offered this website at three times annual revenue. Unfortunately, it probably has nothing to do with the seller’s claim that they are unloading it because they just landed their dream job at Google and are raising money to save the rhinos from cancer.

The far more common reason?

Their content strategy doesn’t create economic value. In finance terms, the present value of the cash flows from a typical article doesn’t cover the cost of creating and publishing it.

It was no longer worth investing in new content. And without new content, most websites will see a steady decline in their traffic over time.

We discovered this with our first acquisition. We bought an abandoned blog where the average article earned less than one dollar per month. Since most of these articles probably took two or three hours apiece to write, these economics didn’t work for the PhD data scientist who created the site. There wasn’t any value in creating new content to grow the website.

This doesn’t mean the website is worthless. The existing base of articles can be milked for cash flow, often for several years. You can even make tactical moves to increase this revenue, through tweaking existing content to boost your traffic or shifting to a better paying ad network.

The real grand slam? Fixing the business model, so you can publish new content and earn back the money you’re investing into the project. More on that later.

IT Triage – What Are We Dealing With?

As an investor, I generally sort prospective properties into five buckets:

  • WordPress Blogs
  • Static HTML
  • PHP Sites w/o Databases
  • PHP with Databases (non-WP)
  • Other programming languages

This very loosely captures the technical difficulty of taking over management of a website. WordPress blogs are very common, relatively standardized, and well supported by plugins which can assist you in copying the site to a new host with a few clicks. Static HTML sites will require a little more elbow grease but are manageable. After that, complexity rises.

I would not recommend taking possession of a non WordPress site with a database unless you have a relevant developer on your team. In addition to moving the code / data, you’re also going to have to set up an environment and audit your code base for nasty surprises.

Incidentally, if you haven’t already arranged hosting, I highly recommend Opalstack. We migrated to them after WebFaction shut down and use them for everything from WordPress Blogs to Python web apps. Pricing is reasonable, service is excellent, and you can easily get free SSL certificates.

Pay Down Technical Debt

Most abandoned blogs and websites have been neglected for a while. The owner usually pumped out a lot of content in the early stages, paused to assess the results, and then slowly lost interest in the project.

Meanwhile, the technical infrastructure behind the website is slowly rotting away. Web frameworks and supporting plugins slowly evolve, falling out of synch with each other. If you use free plugins, be wary of the plugin creator moving on to other projects. Unfortunately these problems accumulate and accelerate over time, as your codebase slowly becomes obsolete.

These problems can start to affect user experience and traffic generation. Worse, they can make it difficult to update your website as key elements can become brittle. This is a common issue with older WordPress websites.

As a general rule, these issues are worth addressing as part of your initial integration process. You’ve just spent a decent sum to acquire the website. Why not protect your investment by fixing the issues as part of the deal?

WordPress Cyber Security 101

It is not uncommon for a poorly maintained site to have been hacked at some point in the past. This is particularly true of WordPress sites, which are dependent on a patchwork of free plugins to deliver key features. My playbook for controlling WordPress security risk:

  • Migrate all text and images but select your own theme, plugins, and configurations. While you may need to re-format a few things, this will eliminate many past issues.
  • Review and purge the user file (drop spammers).
  • Review and purge the comments (drop spam).
  • Delete prior admin accounts (silly but…)
  • Move to a reliable host (NOT shared hosting)
  • Check the site’s back-links / keyword profile for anything that says Viagra / drugs

I’m not kidding about the last one. It happened on my first deal. Owned by the Russian Viagra link spammer mob. Good Due Diligence, eh?

Boosting Revenue & Site Speed

The simple version of this section: if your site is of sufficient size, AdSense is rarely your highest paying display advertising option. The good new is there is no shortage of people who would like to help you take advantage of this opportunity. The bad news? Well, there’s a reason I was firing at least one non-Google Advertising network per year…

Until I met Ezoic. They are an ad optimization company built off the Google ad exchange. They were originally founded by a group of website investors, who wanted to automate the AdSense optimization process for their portfolio (testing different layouts). Their focus has evolved into selling advertising optimization. They bring three things to the table:

  • Expose our advertising inventory to a larger pool of buyer (for higher bids)
  • Optimize the placement of individual ads on our site (automatically)
  • Platform to make websites faster (free CDN, cache, SiteSpeed app)

WordPress sites are basically “center of the plate” for this group; they handle a lot of them. And our results with them are good.

Unlocking Growth: Content & Monetization

Back to the business model. Remember how we talked about understanding your revenue per piece of content vs. cost of publishing new articles?

You most likely purchased a website where the prior owner believed that the value of publishing new content was less than the cost of creating it. Why? Otherwise, they probably would have found a way to publish it.

The good news? A savvy digital marketer can improve on these numbers. We’re going to do a full site audit to look for opportunities. This can take several forms:

  • Tweaking existing content so it ranks higher on Google
  • Adding new content targeting adjacent keywords others have missed
  • Testing new affiliate offers we think are relevant to the audience
  • Reducing the cost of creating new content to fit actual revenue

Once you find a way to boost the expected earnings from a new piece of content above the cost of creating that content, you’ve created a growth platform. For our first deal, less than 5% of the incremental revenue came from optimizing the website’s ad placements. The other 95% came from identifying high value topics where we could use the website’s authority to quickly rank new content.