Failed Website Purchase – My $48,000 Mistake!

I have never been one to get too emotional over money. I have always viewed it mostly as a tool to get things done, one of many. A personality flaw that is linked to money though is that I have always felt that it is a measure of success.

Losing it in a great quantity is a big step backwards, and something i equate to a personal failure. 

So while money itself does not trigger much of an (unreasonable) emotional response in me, this experience has certainly made me feel like a failure at times. Sharing this story holds some embarrassment, and of course with the benefit of hindsight it can be hard to shake that voice in my head that says “How could you be so stupid?

But the fact is that I didn’t know then what I did now, and I made these decisions based on what I thought was sound logic at the time.

There were red flags all around me that I couldn't see. It was an expensive lesson, but a valuable one.  Through the times of crisis the learning curve was steep. It forced to get a lot better in quick time, and has strengthened the foundational skills you need to make a living online.

Long term, this experience will serve me well. Short term, I just have to deal with the fact that I made a very expensive mistake. For the benefit of you all I will share the details of the transaction, what went wrong, and the lessons I have learned along the way.

How Did I Get Here? 

The short answer is that I wanted out of my job. Having spent ten years in a corporate career I was ready for something else.

The career provided some of the greatest opportunities in my life, but something that you cannot get away from is the time commitment. It takes up most of your life and I just feel that if i continue on I will wake up tomorrow and be 50 years old. This scares me!

I want time for other things and have been pursuing an alternative path to wealth creation since I was very young via the standard investment vehicles of Real Estate and Stocks.

While on a five year work assignment in the Philippines I found myself in a situation where I had some money in the bank after selling a property, but my ability to find and finance the next deal was limited due to my location.

I had been dabbling in the online marketing space for a few months but had not yet discovered the real possibilities of this world.

A free course on Udemy got me started. But the process being taught was dated (pre Panda and Penguin) and I just didn’t quite see the payoff as being worth the time compared to my other activities.

Two things changed this. 

  • I discovered Amazon FBA - a whole other story that is not relevant to this article.
  • I came across the Empire Flippers podcast. 

The latter was the real turning point in my journey building content driven sites for profit.

Their marketplace blew me away! There were pages of sites that were making hundreds, and thousands per month and the ROI started at 40%-50% on cash flow alone!

My earlier claim that I do not get emotional over money probably deserves a caveat here. I get bloody excited over making it! It is fun, satisfying and one of the great games of life!

When the greed gland kicks in it can blind you to the risks involved in what you are doing. I am sure we have all been guilty of this at some stage of our lives. It causes you to either over look the downside, or rationalise away the risks.

I was excited, inexperienced, and naive. 

The Plan

You could almost sum up my intentions by listening to one episode of the EF Podcast - The Lifestyle Larry Guide to Job Replacement.

I wanted to replace at least half my income so that I could live off this, while preserving the capital I had tied up in Real Estate and Stocks so i could use this to build long term wealth.

If I could buy an income somewhere around the $5k-$6k per month mark then that would get me there.

Sounds simple enough right? 

Risks I Didn't Consider

I knew that there would be risks in doing this and I thought I could mitigate these through the following: 

  • Purchasing a number of sites to spread the risk
  • Diversifying monetisation methods
  • Hiring staff that specialised in areas I was not strong

From there I would just learn as I go and figure things out.

There are a thousand other risks that I just didn’t think of. The most relevant examples for my situation were:

1.

Stability of Monetization

Amazon have been changing the commission structure regularly since the big move from volume based commission to categories. 

Adsense earnings have been trending lower for years and anyone who has been involved in direct affiliate programs would know that they can be dissolved at any time. If its not your product your destiny is somewhat out of your hands. 

2.

True Value of a Site for the Reader

Value from a buyers perspective is easy - profit times a multiple of earnings.

Whether a site is truly worth anything though depends on whether it genuinely adds value for the visitors to that site. 

A huge portion of sites for sale simply exploit a short term loophole in the world of the internet. 

These holes can exist for years before they are killed off by algorithm changes in the SERPs, or competition comes along and just does a better job at solving the relevant problem. 

3.

Understanding the Niche Before Purchasing

You don’t necessarily have to understand the details of your content (although it helps). You can learn this over time as you work to grow the site. 

What is important is a broader assessment of your competition and what your site’s edge is in the niche.

Understanding the conversion rates you can expect, the types of content that will do well, and where the opportunities to offer more than the competition and dominate the space, are all critical to having a plan for the site after purchase. 

4.

A Vetted Marketplace Does Not Mean Quality

This is the main factor that I underestimated. 

It is the broker's job to validate the information provided by the seller as being correct. Not the quality of the business itself. That was my job, and in this case I did it very poorly. 

Or at least, in a very short sighted fashion.... 

5.

Diversity Makes it Harder to Scale

The idea of having a handful of sites that earn differently can make sense in the volatile world of online business. But when your portfolio is relatively low you are only complicating your life by doing so. 

Different business models require different skill sets. If you are hiring a team then it can be harder to get that alignment in tasks required to manage each site. This means more processes to setup, training to give, and stuff to keep track of. 

Diversification can come down the line when you have mastered one business model and have someone doing the bulk of the legwork for you. This allows you the head space and time to master the next thing. 

Again, a complete lack of experience at the time shone through on this point. 

The Site

This site was actually my third purchase, and the most expensive. I was growing in confidence and felt I was moving up the value chain. Plus I also assumed that bigger sites, and a higher multiple would also be a safer bet. 

The two sites that I had already purchased were Amazon affiliate sites. So i though that it would be wise to seek out a site with diverse monetisation methods, but also look for a site that was bigger, more established, and that could almost run on auto pilot.

There was a site that was out of my price range that seemed to fit the bill nicely. The listing sat on the marketplace for some months and had dropped in price a couple of times, and eventually fell right into my target price range.

It was a large news publishing website with over 10,000 articles, and thousands and thousands of backlinks. The Ahrefs DR was also in the 50s (and still is post DR update).

There was a writing team in place that were pumping out 200 articles per month, all of which were eligible to show on Google News.

Traffic usually fell within a range of 5,000-10,000 visitors per day, with the occasional spike when an article would get a bit more exposure than average.

Revenue was coming in from multiple ad networks which made me think at the time that the earnings were diversified.

So what I saw was a stable and established site, with steady revenue and something that would only grow larger over time with a sizeable publishing schedule.

A steady cash flow business - with the following line from the listing being the clincher:

This site requires very little time to run with just an hour a week spent allocating topics to the writing team.

This would allow me the time to focus on growing my other sites.

What Went Wrong

Initially everything was going according to plan. Earnings were up around the $1,500 per month mark and all I had to do was allocate the topics as instructed by the previous owner.

The instructions were very simple - look for the main articles on a list of sites that were provides. If they are popular on that site then they are worth writing about.

I thought if this is working then why change it? When things went pear shaped I learned that such a lazy approach to topic selection is the equivalent of playing bingo and hoping strike a reward.

Writing Team

I would regularly audit the published articles and found a number of them that were showing upwards of 60% duplicate content when screened through Copyscape.

The manager of the writing team agreed that they would correct this and I would see an improvement for a few days, then back to normal.

It got to the point where I had to request that some articles be re-written before payment would be made. I encountered a lot of resistance to this and after I eventually made that payment the writing team advised that they will be shutting down for a few weeks due to a seasonal holiday.

This vacation turned out to be an indefinite severing of the working relationship. This was ok with me as I could now seek out new writers and increase the standard of the content.

There were plenty of people willing to write articles on Upwork for modest sums, but getting them to stick around proved problematic. I was able to find a handful of excellent writers willing to do articles for $3-$5 per article and this worked great for some time.

I also hired a VA to publish the articles for me for $3 an hour also. She has been great and I still work with her to this day on other projects.

So I was able to rebuild a better quality writing team. It did require more time to run, but was not that bad. The bigger problem had already started with traffic and earnings on a steady decline.

Rapid Traffic Dive 

The catalyst for this slide was the Google FRED update. It was not an overnight thing like people had experienced when the Penguin and Panda updates hit some years back.

Every day the traffic slowly fell, dragging the earnings with it.

The Ahrefs keyword index really tells the story. The volume of keywords indexed fell by 70% over the course of a couple of months and there was nothing I could do about it. 

From a peak of about 100,000 key words indexed, it sits at 10% of this at the time of posting. 

Rehabilitating the Site

My own complacency in the months leading up to this change really cost me dearly. Rather than expecting the site to run on auto pilot I should have been looking for ways to diversify the traffic sources and get people coming back to the site.

Now I was chasing my tail and I had to try and do more with less.

The plan was to:

  • Conduct more advanced keyword research
  • Further improve quality of content
  • Build alternative traffic sources
  • Improve the onsite SEO - not of the 10,000+ articles had any internal links!!

Keyword Research

The quality of my topic selection when i took over the site was laughable. I had been following the instructions of the previous owner, but that is just not good enough.

This is when I discovered Ahrefs. A tool that I now use daily, and could not live without!

Previously I had done all my keyword research using Long Tail Pro, but this tool is entirely unsuitable for a news site that requires up to the minute data and new content ideas daily.

All I had been doing was looking at a list of comparable sites and taking note of the subjects of popular articles…. Thats it! Laughable hey….

My new method was to:

  1. Target the same list of sites - and a whole bunch more 
  2. Check what new keywords had been indexed
  3. Filter down to keywords with a keyword difficulty of less than 5
  4. Filter traffic that was above 500 searches a month
  5. Manually select the topics that also fit in with the site’s categories
  6. Make a judgment on the search intent of the keyword and if suitable to a news topic

I figured that these topics would be far easier to rank for and over time we could start to re-establish a footprint of high ranking articles… Again the time investment increased. 

Internal SEO

Of the 10,000 article on the site I found a total of zero internal links.

The prospect of going through all of these articles and linking them up correctly was a daunting one, so I instead decided to update all articles on a topic when a fresh article was added.

  1. Upload the new content
  2. Search Google using the advanced query site:[site name] [topic}
  3. I would then open all of the relevant articles in different tabs
  4. One at a time I would skim the content and link to the relevant posts to each other

Rather than worry too much about anchor text I would more be focussed on mixing things up and linking generously. Over time this would make the site easier to crawl and maybe Google would start to like the site a bit more.

I would also always ensure that at least a few links were pointed at the latest article. 

Social Media

The site had no presence at all on Social Media.

I had started a Facebook and Twitter page when I bought the site and had actually started to get some good traction from Twitter.

My posts were scheduled using Missinglettr, and tweets would drip out over the course of 14-30 days. If the topic was more evergreen then this would push out to a full year. 

Get 50% off your first three months with Missinglettr here

Clicks were coming and if i stuck with this over the course of a few years then it would eventually get to a more meaningful source of traffic. But the immediate benefit is negligible in terms of earnings for a display ad site. 

Push Notifications

I started to collect subscribers using the free service One Signal. Another element that will bear fruit over time, but no immediate benefit. 

At the time of writing there are over 600 subscribers, but only a small portion of them will click on any one article. 

As time progresses this will build into meaningful traffic, but for now it is a drop in the ocean if you are getting 5%-10% click through rates.

Update Design

Design is not my strong point, but by replacing the site with a more mobile friendly theme I was hoping that this could make a difference.

The mobile version of the site was run via a plug in and caused all sorts of technical glitches with the mobile version of the site. With Google focussing heavily on the mobile user experience this was an urgent problem to fix.

Adding in AMP to the site was also an option, but this has not yet been done.

Reduce Ads per Page

The site was very ad heavy - I found this surprising the first time I looked at the site - but i rationalised this as being in line with the status quo for the industry.

There was a lot of talk around FRED targeting ad heavy sites so I wound it right back.

I also started to use Ezoic to serve the ads. They are an aggregator of ad networks that will bid out your ad space and serve the best paying ad. This should see your earnings per thousand visitors increase.

They also use AI to test different ad placements and layouts to determine the optimum balance for your user experience - so that your site traffic can also be maximised.

This removed the headache of testing out the five or six ad networks the site had been using to work out what should stay in the new slimed down ad placements. Ezoic would do all the work for me and I could focus on recovering the traffic. 

Note: When I visited the site I encountered some very unusual ad placements that i thought hurt the user experience. So while Ezoic's testing takes some time to work, I would not recommend them at this time for this reason.

Rehabilitating the Site

For a period of time it appeared that this was going to work. It was hard work and the site was not running at a profit, but i could see light at the end of the tunnel!!

Traffic was rebuilding and we started to have 2,000 visitor days again.

The number of keywords indexed was creeping higher and I started to see a handful of articles really stick and get into our list of top ten posts.

I had put in a lot of time with the internal linking and was making sure that the posts with the most link juice was spreading the love around the site, and that navigation was also easy on the most popular posts so readers could go deeper on a topic if they wanted to and I could get the page views moving up. 

Then out of nowhere the downward spiral just kicked in again. at about the mid point in the above screen shot you see the steady decline kick in again. 

If we zoom back in on that Ahrefs keyword chart from earlier, you can see the improving prospects followed by another free fall. Like a cruel Google powered roller coaster. 

Ahrefs Keyword Drop

Remember the peak of that line was near 100k keywords, so the prospects of recovery at the time were bright. 

If you could indulge me for a moment while I poke fun at myself. For any Simpsons fans the above graph may remind you of something...

Now, with the site struggling to break even before this secondary decline, it was now becoming a serious loss making exercise to continue work on the site. 

So, What Now? 

I still cannot put my finger on why the second drop happened. The plan seemed to be working, but my best guess is that Google is just figuring out that if a News site is not offering original, cutting edge stories then it may not deserve the exposure that it once had.

More recently I have learned about Display Ad managers who have far higher returns than Ezoic. There are examples of sites achieving earnings per thousand visitors upwards of $12-$15 with premium networks such as Adthrive and Mediavine. The latter having the most attainable minimum traffic with 25k sessions per month required as a minimum.

This could deliver $300-$500 per month and provide some more breathing room to invest in higher quality content…. Or the possibility of salvaging some of the invested capital and just selling the site.

Unfortunately the latest traffic drop would make it too inconsistent to qualify here for these networks unless started publishing again.

It is very possible that I can hit these levels again quickly when daily articles are added, but when I line up the return on offer vs the time required it is a very poor ROI compared to my other sites.

The site also has a lot of articles that overlap very closely. By identifying those that are ranking in the top 20 results, and could merge any close articles into the one longer article, and redirect the previous URLs to this one post.

This could allow be to delete a stack of posts that are fighting each other in the SERPs give a single piece of content the best chance to rank.

The problem with this plan is the topics are generally not evergreen. But I will be able to find a few topics I could test this on without spending months overhauling the content.

Reality Check

I do not take giving up on project lightly, but with the latest drop and the site simply unable to support itself financially it does not make sense to put more time into it.

The question now must change from whether I can turnaround the site, to whether it is the best possible use of my time. Due to the required hours and the uncertainty surrounding the outcome it is clear that it is not the best use of my time.

I will create a far greater ROI concentrating on my core competencies in site building. The outcome is much more certain and the upside lucrative.

That means taking my medicine and giving up on the money that I put into this project - it is a sunk cost. 

Lessons Learned

Here is a summary of the critical lessons that I took away from the experience. By sharing them as openly as I can I hope that it will help you make better decisions in the future.

  • Search Intent is as important as the keyword competition when selecting topics
  • If you cannot produce the best possible piece of content on any given topic, should probably shouldn’t target that key word
  • Evergreen topics have a greater potential ROI, and warrant a higher investment, but will lead to a stronger asset
  • The vast majority of sites that claim to be passive are not. if you do not work to maintain or grow a site, often it will die a slow death. Competition will be coming for you if you stay still.
  • Using multiple ad networks does not count as diversification of earnings. It is just multiple ways of achieving a single monetisation method.
  • If you cannot build links to a piece of content you are going to struggle to get noticed on the internet…. But sometimes the links wont make any difference if your content just isn’t what Google wants.
  • And finally…. Google wants the best quality content in their search results. So give it to them! This site had thousands and thousands of posts. Not one of them could be considered the best on the topic available - and Google figured it out. It was just unfortunate timing for me when they did.

Final Word

This was a setback for the bank account - no doubt about it. But my personal growth was significant too. Maybe not $48k’s worth, but it has given me clarity on what kind of websites I can make profitable and what I can't (at least for now).

Making such a big commitment to something outside of my core skills is a drain on resources, and head space and it just doesn’t make a lot of sense if you are trying to build something big.

I know that eventually I will make this money back. I am now laser focused on maxing out one site, and I will put all my time and energy into this until I hit a minimum of $10k a month in earnings. 

Only then will I seek to push my other sites to the same level. Including this flop.... 

Am I open to future site purchases? Yes, absolutely! But I have a much more specific idea of what I want, and have my eyes wide open to some of the red flags that would put a site into the exploiting a short term loophole category. 

About the Author James Treloar

Corporate Debt Collector turned internet marketer. I run a successful portfolio of Amazon niche sites, an FBA business, and a content agency. The Amazon opportunity has been life changing for me, and is so big that there is enough room for everyone to carve out their niche. The hard part is getting started!

Leave a Comment:

Pin It on Pinterest

Shares
Share This