Valuation metrics - female blog site, e-commerce potential 250k subs
April 22, 2020
by a professional from INSEAD in Sydney NSW, Australia
Hi all, working with a client on a potential sale. Looking for subscriber valuation metrics for a highly trafficked blog site, 250k active subs, 900k historic subs, young female-focused site. are there any rule of thumb measures for valuations? Would do well as an e-commerce funnel. Subs are US,UK,AU, CA and SG. Cheers Anthony
from The University of Chicago in Dallas, TX, USA
Un-monetized blogs are tricky for buyers. As a buyer of a business, I dont want to pay you for things that might work, but rather what is working. You could make a million dollars is worth quite a bit less than we are already making a million dollars.
250k subscribers in that demographic is also tricky because how much attention does the blog really have - was it a single viral post or is their a hugely loyal following? 900k historic subscribers but 250k current implies something on the decline rather than something growing. A narrative will need to be both developed and bought into.
If it is already monetized - then start with current cash flow as a basis for valuation.
Valuing based on CPC is a tough game - every media outlet on the planet has tried it - most could not make it work. You are basically spending a lot of effort to attract eyeballs with the idea that the best thing that can happen is they leave? Are there buyers for CPC based sites - yes, but probably not on a site like this.
Also topic is going to matter. Some things are imminently more monetizable than others. Is this a how to do calculus, makeup tips, fashion advice, reviews of songs, poetry? General theme matters a lot for monetization. Also lots of risk about how the target audience accepts monetization - teen girls in particular are pretty fickle.
Assuming there is instagram, facebook, twitter, youtube to go with it? If not - huge discount.
How diverse are traffic sources? Is traffic entirely for a single ranking on Google or spread nicely across dozens of channels?
Also how much of the brand is tied up in the person creating the content? This might require a very airtight employment contract and frankly huge risk to buyer if content creator gets a payday and loses passion or interest. Risk means lower price.
Not trying to be negative, but this sounds more like a speculative bet to develop a following into a business than a cash flowing business and thus the valuation metrics and potential buyers may look very much different than your current audience on searchfunder.
from Howard University in Bridgetown, Barbados