How to estimate what a website will earn before you build it

How to estimate what a website will earn before you build it

Most people start a website, wait a year, and only then find out whether the idea could ever pay. It is much cheaper to do the math first. You will not get an exact number, but you will know whether you are looking at pocket money or a real business.

This guide shows the two formulas behind most content site income, the benchmarks to plug in, and two worked examples. If you would rather skip the math, our earnings calculator does all of this for you.

The two numbers that matter

Almost every content site earns from one or both of these:

  • Affiliate links: you earn a commission when a visitor buys something through your link.
  • Display ads: you earn for showing ads, paid per thousand pageviews.

Both start with traffic, so the first input is always your monthly pageviews. Be honest here. A new site usually takes six months to a year before search traffic adds up to anything.

Affiliate income

The formula:

Pageviews × share who click a link × share of clicks that buy × what you earn per sale

Each part has a typical range:

  • Share who click a link. On review and comparison pages, 15 to 30 percent of visitors often click through to a shop. On general informational articles, it is closer to 3 to 5 percent.
  • Share of clicks that buy. Amazon converts well because people already trust it, often around 4 to 6 percent. Software and services convert lower, around 1 percent, because the decision is bigger.
  • What you earn per sale. Either a percentage of the order or a fixed amount. Amazon pays around 3 to 4.5 percent in most home categories and up to 10 percent for luxury beauty. Software programs often pay 20 to 30 percent, sometimes every month for as long as the customer stays. Hosting and finance programs usually pay a fixed amount per customer.

Display ad income

The formula:

Pageviews ÷ 1,000 × RPM

RPM is what you earn per thousand pageviews. It depends heavily on three things: the ad network, your niche and where your visitors live.

  • The network. Google AdSense typically pays around 3 to 12 dollars per thousand pageviews. Premium networks such as Mediavine and Raptive often pay 15 to 50 dollars, but they only accept sites above a traffic or revenue threshold. Raptive, for example, asks for 25,000 pageviews a month.
  • The niche. Finance, insurance and legal topics pay roughly twice the average. Entertainment and gaming pay about half.
  • The audience. Visitors from the US, UK, Canada and Australia are worth several times more to advertisers than visitors from most other countries.

Example 1: a kitchen gear review site

Say the site gets 20,000 pageviews a month, mostly from the US.

Affiliate: 20,000 × 10 percent who click × 5 percent who buy × 2.10 dollars per sale (a 60 dollar order at 3.5 percent) = about 210 dollars a month.

Ads with AdSense at around 5 dollars RPM: 20 × 5 = about 100 dollars a month.

Total: roughly 300 dollars a month. Not a salary, but a clear signal: the same site at 100,000 pageviews, on a premium ad network, would be a real income.

Example 2: a site about software for small shops

Say 20,000 pageviews a month again, with readers comparing tools.

Affiliate: 20,000 × 15 percent who click × 1 percent who buy × 75 dollars per sale (25 percent of a 300 dollar yearly plan) = about 2,250 dollars a month.

Same traffic, seven times the income. That is the most useful lesson in this whole exercise: what you recommend matters as much as how many people read you.

Use a range, not a single number

Every input above is a guess until you have real data. That is why it helps to think in ranges: take half of your estimate as the pessimistic case and one and a half times as the optimistic one. If even the pessimistic case looks worth it, you have a good idea.

Also check the competition before you commit. A niche full of big brands can take years to rank in. Our calculator includes a competition meter for exactly that.

Sources

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