How Jon Dykstra Made $1,006,761 With Display Ads Arbitrage in 2015 (And How You Can Emulate His Success)
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Hey guys, as part of my goals of 2016, I said I wanted to make Authority Hacker less about just Mark and I and more about the community of people who actually do what we do (building authority sites) and are successful at it.
Don't worry, I will be back on the blog writing long analysis and how to posts very soon but today we have someone that I highly respect.
Jon is a guy who first makes money from his sites (outside the make money online niche) then writes about it unlike many people in this industry.
In fact, he made over a million dollar from display ads and over $400,000 profit from it last year outside the online marketing niche.
I am also very interested in Jon's case because he makes money slightly differently than us. Most of his income comes from display ads (Adsense, media.net etc) while most of ours
I have been studying him greatly and tested some of the ad layouts he shares in this post and we are already seeing a 40% increase in ad earnings while email earnings remain just as strong.
This post is not a step by step tactic or anything specific but rather nuggets Jon learned building a $1 million /year authority site empire.
If that is something you are after, pay close attention and experiment with things he mentions.
I remember the day when I knew, without a doubt, being a website publisher was the career and business for me.
I was reading some article which happened to mention the then foreign-to-me concept of affiliate marketing.
It explained how Amazon paid website owners a percentage of sales generated simply by linking to Amazon from a site they owned.
I immediately realized the potential this had.
Up until that point, I managed a website for my local business. The site performed well and attracted plenty of new customers, so I knew a little about blogging and publishing websites.
Ironically, at that point, I had no interest in display ads for monetizing a site. I’d only read that huge media publications were having a hard time making ends meet with banner ads. I naively concluded monetizing a site with display ads was a bad business model.
Fast forward through several years of affiliate marketing (which I still do), and now my largest revenue source is display ads... and I love it more than I ever did when focusing solely on affiliate offers.
Why do I love monetizing with display ads?
My one-word answer is flexibility.
With on-site affiliate marketing, content is geared toward promoting products. Frankly, publishing content solely geared toward product promotion in some fashion gets boring. It's also restrictive.
Monetizing with display ads means you can monetize almost any content. I love that.
I listened to the wrong people.
For years I resisted display ads because I kept reading that Adsense doesn't generate any money worth talking about.
Well, this is true if you only publish websites about internet marketing. I agree: Adsense is not optimal for these types of sites. I don't use Adsense (much) on Fat Stacks Entrepreneur.
However, in many other niches, which are a ton of fun and have massive potential, Adsense and other ad networks can be a goldmine.
I discovered this when I paid a guy $250 (or $400 I can't remember) for a 1 hour skype session several years back. He showed me his Adsense revenue and how he generated it. It was so simple. I loved the concept. I went at it hammer and tongs and haven't looked back.
My Simple Display Ad Revenue Formula
I agree: making $3.00 per day from display ads isn't fun.
However, making $300 per day from display ads is thrilling. I love it.
My formula is simple.
Great content + plenty of quality traffic + optimal ad placement = display ad revenue.
Gael: How long did it take you to get there?
Jon: How long? I suppose it took about six months with my first social media niche. That was when organic Facebook traffic was still great. I invested in fan acquisition and then sent traffic to my site from the Facebook page. With my current largest niche site (2 years old), it took 3-4 months to get to $300 per day, but that was a result of paid traffic. As for $300 per day from organic search traffic, that took about 15 months.
A. Great Content
There's a trend right now I've dabbled in, where website owners create thin clickbait content formatted in extremely paginated posts and buy traffic—with the goal of earning more in display ads than they pay for the traffic. This is loosely referred to as ad arbitrage.
It works. I've done it. Some publishers make a killing doing it.
However, let's face it: the content isn't great (although there are exceptions).
Yes, this business model works for now (it's up and down). Yes, you can make a pile of money. Here are the problems I have with it: it’s not very passive, and the long-term viability is questionable.
It's not passive because you must constantly manage ad campaigns. The margins are usually thin so every campaign driving traffic must be optimized. Ad management can consume 4 to 10 hours per day.
Been there, done that.
The long term viability is questionable because from what I understand, quality paid traffic sources are losing interest in extreme pagination. Display ad networks may eventually tire of these sites too. Moreover, it's volatile because traffic prices and ad RPM fluctuates. It's a juggling act.
I'm NOT suggesting buying traffic is bad here; instead I'm suggesting building your entire niche business on thin, extremely paginated content has its own set of problems. I think there's a better way to proceed.
Gael: What's hard about managing campaigns and buying traffic? Would you recommend it? Can you still do it now as CPCs are increasing?
Jon: Buying massive traffic requires constant review and management. Most new campaigns don't work. Those must be stopped, and new ones must be created and tested. It's an ongoing process. Over time, the goal is to have a stable of 10 to 100 profitable campaigns--but even then, the ongoing management is labor-intensive.
There are many variables with paid traffic; the two biggest are the cost of traffic and revenue fluctuations. Both factors fluctuate daily, so it requires ongoing management to ensure profits. There will be times when paid traffic doesn't work, which can be very frustrating if you come to depend on it as a primary traffic source. This is why, despite paid traffic being potentially very beneficial, it's good to develop additional traffic sources.
That said, there are many benefits of running paid traffic to a content site. Those benefits include:
- Profits & exposure. When done right, buying lots of traffic can lead to fast, scalable profits as well as great brand exposure.
- Possible SEO benefits. Your site receives plenty of traffic, which may help SEO (I'm not sure, of course, but quality traffic won't hurt a site)
- Fast social media channel growth. This is huge. With Facebook ads, even if you optimize the ads for "clicks to website," you'll get new fans very quickly, which in turn is another source of free traffic. The website traffic can help build other social media channels, such as Pinterest, YouTube, etc.
- Social media proof. A lot of traffic can generate a lot of social shares on specific posts. When you set the social media buttons to display share count, and there's 10,000 shares, that's strong social proof for that post )and the website).
- Email subscribers. If you run an email newsletter, paid traffic can build up your subscribership very quickly. Imagine breaking even with paid traffic and getting subscribers for free. If the email newsletter is decently monetized, that can be a very good business model.
I do recommend using paid traffic, especially for younger sites, if you can make it work. Younger sites have no authority, so organic search traffic will be low. If you want results fast, paid can deliver. I still run paid traffic to some of my sites and probably always will, but now it's less of a focus because I've developed several excellent traffic sources.
And yes; buying traffic to niche content sites still works. In January 2016, within 2 hours, I discovered over 40 content websites buying traffic. I list those at http://fatstacksblog.com/content-websites-buying-traffic/. That's just a few of many. I still buy traffic, although not in the volumes I have in the past.
I don't see paid traffic CPC's increasing. I'm getting traffic at lower rates these days than I did 12 months ago on both Facebook and Outbrain. Of course this varies by niche, but in my experience, the price of traffic is not increasing (although it fluctuates over the course of a year).
Let’s first ask a question. What does it mean to publish great content in this case?
Great content is publishing content that will rank in the search engines long-term. While I certainly don't suggest relying 100% on organic search traffic (we know how fickle that can be), I do suggest that you publish content that has a good chance of pulling organic search traffic in the long run.
Even if it's long tail keywords only, that's fine. If you publish a lot of great content, the traffic from long tail adds up.
For example, my biggest site pulls gets 12,000 to 19,000 daily organic search pageviews from literally thousands of keywords. Some keywords pull in a lot of traffic each day, but overall, the lion's share of traffic is from the long tail.
This site has a little over 1,000 published posts. That means, on average, each post pulls in 12 to 19 daily pageviews which isn't much per post… but it's a lot if you have a lot of posts.
I'm not going to expand on what great content is. Most people know what it is. It doesn't have to be the best on the planet, but it must be good.
It must offer value to visitors. It must be unique. Word count isn't the be-all-end-all, but generally, my posts are 750 words or longer (some over 5,000 words).
Again, don't live and die by word count; however, publishing 2,000 posts, each with 100 words, won't pull in a lot of long tail organic search traffic.
Read more on this : The Business case for short content
B. Plenty of Quality Traffic
For my big sites (I have 3 large B2C sites earning 100K visits/mo or more), I attract traffic from many sources, including organic search, social media, YouTube, curation sites like StumbleUpon, direct from other sites and paid sources (Facebook ads and native ads).
I'm not dependent on one source.
Each source takes time to build up. You need Facebook fans for organic Facebook traffic. You need site authority and decent SEO for organic search traffic. You need a well monetized site in order to buy traffic. All of this takes time, but with effort it can work.
Traffic Turbo Boost Tips
There are 3 ways I've been able to turbo boost traffic to new sites. I'm talking 100K plus monthly pageviews.
Here are the strategies I use to get to 100,000 monthly visitors.
Gael: How long does it take you to get to 100,000 visitors per month?
Jon: It totally depends on the traffic strategy. If you buy traffic, it can take a few weeks or less. If you count solely on organic search and/or organic social media, it can take 6 to 24 months, depending on many factors. I believe I got to 100,000 monthly visits from organic search in 9 months.
Recently, I joined as a partner in a new website (5 months old) which got to 100,000 monthly page views in 3 months. The strategy was circa 2013, which was Facebook fan acquisition with Facebook ads and then promoting new posts on the Facebook page. While this strategy is less effective than it was, and it's less widespread, it can work in some niches. Keep in mind, approximately $5,000 was invested in fan acquisition to reach 100,000 monthly page views, but now traffic is growing and fan acquisition is growing organically.
1. Buying Traffic
If you can break even or profit from buying traffic, do it.
I did this with one site and took it to nearly 2 million monthly page views inside of one year.
This traffic catapulted the site and now has its own momentum with social media and organic. I don't buy nearly as much traffic anymore because it has its own momentum, which it never would have achieved without buying traffic.
Gael: How do you buy traffic and break even on a site that just offers content?
Jon: The first step is to ensure your site is well monetized--whether with ads, affiliate promotions and/or an email newsletter.
Once you know your revenue per thousand visitors (RPM) on desktop and mobile, you know how much you can spend per visitor.
Which leads to step 2, which is testing ads until you're able to acquire traffic at your target cost per visitor.
I've tested thousands of ads. It's time-consuming. Most don't work. The key is testing all of Facebook's ad formats on all devices. It's also worth trying native ad networks such as Taboola and Outbrain. I've also used Bing Ads effectively, although the volume was never as high as I'd like.
2. Acquire Facebook Fans
Facebook fan acquisition was most popular around 2011-2013. The concept is to invest in attracting Facebook fans to a Facebook page; then, send fans to your website via Facebook Newsfeed posts.
This worked spectacularly well a few years ago, but it still works. In fact, I recently got involved in a website that is doing this and the organic Facebook traffic is amazing.
The key here is engagement. I don't think this strategy works in every niche, but if it works in your niche, it's a viable strategy.
As an aside, if you choose to use Facebook ads to drive traffic directly to your site, you will still get a lot of new fans because people who interact with Facebook ads, even if optimized for "clicks to website" will become fans. This is my preferred approach; however, I can't deny that focus on fan acquisition still works.
When you run Facebook ads, you can actually get a LOT more Facebook fans with a simple trick that very few people know about.
You can actually invite people to join your Facebook page which is essentially free page like ads if people liked a post of yours.
Here is how to do it:
1 - Preview your ad in the ad manager & click the "view post permalink with comments" link
2 - in the newsfeed, click on the "and x others liked it" link below the post
3 - click the invite button next to people's names and they will get a notification inviting them to like your page
Voila, free Facebook fans from any kind of advertising you are running ;).
3. Buy a Website with Established Traffic
I recently bought a website with 130,000 to 170,000 monthly pageviews. It's established and the organic search traffic is established.
Surprisingly, it didn't cost too much. It's 8 years old with decent DA and is ready to grow. There's a learning curve when buying an established site, but the potential is huge. Buying the site saved me years of work and thousands of dollars in content.
I love this strategy, but beware: buying websites is a whole different ballgame. It can be very rewarding (and profitable), but it can also be both difficult and risky. I’ve been a part of successful site purchases, successful sales… and even a couple flops, so I wanted to drop in my two cents here.
First, Jon is a monetization expert. Not everyone is (I’m certainly not), so buying a website for traffic only may not be as profitable without that skillset. Instead, if you’re looking to get into the site-buying game, you should probably focus on ROI and opportunities that play to you strengths.
George from WiredInvesters (a group who buys and sells digital properties regularly), often says you should play to your strengths and buy sites with obvious opportunities for you to grow it with with skills you already have (e.g. if your primary skill is keyword research, look for high-authority sites with lots of untapped keyword opportunities).
Or, buy sites that can add value to assets you already own. Matt Paulson, of MattPaulson.com, crushes it with this strategy. He revealed on a podcast episode from NichePursuits that he buys highly related web properties and simply signs that traffic up to his existing email list using an already-optimized opt-in popup and autoresponder, where he then upsells them on a premium newsletter.
Finally, remember that buying sites requires capital, and it’s very easy to get burned. You must, must, must do rigorous due diligence. And, if you’re new, it’s typically best to stay away from places like Flippa; you might be able to find great some deals, but it’s also filled with spammers.
Keep Your Mind Turned Toward SEO
A few years ago I ignored SEO. After Penguin, I was done with it. That was too extreme. My problem with Penguin is I relied too much on SEO traffic.
But ignoring SEO completely is short-sighted.
There's a middle ground, which is my approach these days.
I'm not out to game search engines. I don't live and die with search rankings. However, I do publish content (a lot of it) with the intention of pulling in long-term organic search traffic.
Even though I buy traffic and pull in quite a bit of social traffic, nothing is as passive as organic search. Also, my understanding is that organic search traffic is the most valuable traffic source when selling a site (assuming the organic search traffic is stable or in long-term upward trajectory).
Here's what I do for organic search traffic these days…
1. Plan and structure content
This involves keyword research for a series of posts (usually 5 to 30 posts). I structure it as a cohesive group that I will interlink. I include clickbait style posts to drive mass traffic to it (traffic is always good, even if it's paid).
For each post I do the usual meta title and description. I interlink the posts and have clear navigation.
I post each post to all social media channels. Where it makes sense, I turn posts into videos and upload those videos to YouTube.
To date, I've done very little proactive backlinking; however, recently I've started some white-hat outreach link-building methods. I've had some success, but it is time consuming. It will take time to see if this works well. I believe it will work well which is why I've invested in the software and outsourcing to do it.
I'm seeking links from:
- Links/resources pages from websites in my niche,
- Broken links
- Sites that link to similar resources in my niche - where my content is as good or better.
These methods are nothing new. Brian Dean writes about them extensively.
I'm not going nuts with this. I'm proceeding slowly to see how it goes.
The fact is 2 of my 3 B2C sites are fairly well established (8 years old and 2 years old each with a lot of content) so they're ready for some additional links (white-hat only via outreach).
I don’t go nuts with link building either. You need links, of course, and the more links you have, the better your site will probably do. But in the first year or so of a site, the resources you need to really scale link building just aren’t there, and there are so many other things that need my attention.
Instead, I like to execute a couple really rigorous link building campaigns when I launch a site, usually after my first batch of content.
With my current site, I spent the first two months getting as many articles up as possible. Then, I spent the next two months building links, ending up with roughly 60 linking root domains.
That was more than enough to get the site rolling, and it’s grown to 100,000+ organic visitors and roughly $4,000 per month in revenue--almost entirely from that first “round” of links.
As the site makes more money, I’ll probably hire someone. However, that initial burst of links launched the site just fine, and for the past eight months, I’ve spent hardly any time building links at all.
Additional Traffic Tips
1. Pinterest Rich Pins: If Pinterest works for your niche, be sure to activate rich pins. I went from 500 daily visitors to 3,000 plus daily visitors from Pinterest after doing this (it took about 2 months for this increase to materialize).
Read more: Pinterest Traffic Marketing Tips
2. Use Image Sharer by SumoMe: If you have a lot of images that are shared on Pinterest, use the Image Sharer plugin. It's the best image hover plugin I've used and it can drive a lot of traffic.
3. Focus: While I post to many social media channels, I focus on 3 (Facebook, Pinterest and Tumblr). These are the platforms that work best for my B2C sites. In the beginning, I focused solely on Facebook because it worked quickly.
Once I could outsource that work, I focused more and more on other sources that were working. Interestingly, now Pinterest drives more traffic than Facebook for one of my B2C sites.
C. Optimal Ad Placement
You have to exercise control when it comes to display ads. Don't get carried away with the following:
- Too many ads
- Too-aggressive ad placement
Just because it increases RPM does not mean you should do it.
Be sure you know the terms of service of every ad network you use, particularly AdSense.
Just because another site does it doesn't mean you should.
Do consider user experience. At some point people will not go to your site ever because it's just too annoying. Endless fly-ins, popups, interstitials, etc. can ruin user experience. By all means, be somewhat aggressive, but within reason.
For example, I often skip Forbes.com in the SERPs because that interstitial that blocks access to the site is too annoying for me. I'm sure I'm not the only person who thinks so. That said, I'm sure that interstitial ad earns a fortune.
Here's my current ad placements for long content.
- Adsense leaderboard above post title.
- AdSense responsive unit in the sidebar below a list of recent posts
- Media.net unit directly below the first image in the post
- AdSense unit after eight or so paragraphs
- Ajax Search Pro form below the AdSense unit
- Media.net unit below the Ajax Search Pro form
- A 300x600 stick unit in the bottom of the sidebar
The remaining Adsense I put in the middle of content or bottom of content. It's not a big earner.
Disclaimer: The above is what I do on one B2C site. It works for me. I can't guarantee it's optimal for your site. I simply set it out as an example.
Additional display ads I'm running include:
1. Opinion Stage Polls with ads: I have 2 polls (and/or quizzes) on each page. I run only Criteo, Outbrain and Video ads on these. I don't have Adsense because I already have 3 Adsense ads on the page.
2. Criteo: Criteo is a backfill ad network. You set a floor CPM and they will trigger if there's demand. The beauty with Criteo is you're guaranteed the floor CPM based on impressions, not clicks.
However, if you set too high of a floor CPM, Criteo ads will never display. I set the floor CPMs about $.50 higher than the RPM of the other ad units on my page.
3. Google Matched Units: This is Google's related content units. You can choose to include ads. I do include ads. These work reasonably well at the bottom of content. I have one unit on the page.
4. GumGum In-Image Ads: Because I have quite a few images on one of my B2C sites, I use GumGum in-image ads which shows ads on a couple images per page. This is excellent incremental income. Tip - ask your rep to ensure ads don't show up on every image. That's annoying. I set it to show up on 1 to 3 images per page only.
Additional display ad options to consider:
1. Video ads: I only use these in my polls and quizzes; however, video ad networks pay well. They're definitely worth exploring. My problem is I'm not a big fan of them as a user so I tend to not use the much.
2. Exit intent ads: Like exit intent sign up forms, you can use exit-intent ads.
3. Native ads: I've used Taboola and Content.ad ads before; however, they don't pay too well (for my niches). I prefer using that space to encourage clicks to other pages on my sites. That said, I definitely recommend you give them a try. Many publishers use them because they are lucrative.
4. Mobile download ad networks: There are many of these. They work in select niches so be sure to inquire whether your niche/audience is a good fit. If your audience is a good fit, this can be a great way to monetize mobile traffic.
Build, Build, OUTSOURCE, Build
I admit that launching and building a huge B2C site is a juggling act. There are many moving pieces. You often feel like there aren't enough hours in the day.
One way to alleviate this is once you have some meaningful revenue, start putting together a team. Training takes time, but I can tell you there's no way I could manage all my sites to the level they run now if I didn't have my team in place. In fact, I couldn't handle one of my sites on my own.
What's the first thing you should outsource?
The first piece of the puzzle I outsourced was content generation. This is easy to do for most B2C sites. Once you have a content rhythm, simply train a writer or writers to do what you do.
It's best to hire quality writers even if it means fewer published posts per month. Remember you want to publish great content.
Once you no longer have to generate content, you're free to buy traffic, do social media, test ad placement, test new ad networks, create videos, etc.
As your revenue grows, hand off more and more to other people.
The goal is that you need only spend 2 to 10 hours per week on a website. That way you can launch more or buy more or both.
Choosing a Niche
Usually "niche selection" is placed in the beginning because it all starts with choosing a niche, but I put it at the end because at the end of the day, most broad niches can be turned into money makers. It may not follow my formula exactly, but if there are existing authority sites in the space, you can be sure there's money to be made.
Each niche will function differently. I'm in 4 very different B2C niches. Monetization is different across the board. I'm still trying to optimize monetization for 2 of the sites. I'm confident I'll figure it out because there are massive sites in the space, so I’m confident there's money to be made.
Generally, I like niches that have a chance to do well on social media. This includes a lot of niches. I also like niches that are fairly broad so that the potential traffic is massive. I don't want to do all this work only to be capped at 700,000 monthly visitors. I want to know that in time I can get 3 million monthly visitors (or more).
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Finally, with regard to domain name selection (I get this question a lot), choose something you can brand. Don't choose something because your main keyword is in it. You want to brand your site in the long run.
There you have it, Jon's blueprint to $1 million+ / year revenue with content sites and display ads.
I love his systematic approach to things and admire the fact that he was able to scale up to millions of visits monthly on his own.
His model is clearly a great complement to our email marketing based model and after reading this post (submitted around 1 month ago) I have started testing Ezoic and a few other ad systems Jon uses and almost doubled our display ad revenue.
Use his layout, use the systems he recommends and you are in for a treat if you have some existing traffic.