I was asked by a few affiliates to write an article on reinvesting in their websites. Affiliates wanted to know how much of their income from a website they should reinvest.
Now that’s a great question. Unfortunately, after writing, revising and ultimately deleting 5 articles on the topic this week, I can safely say:
There is no set answer.
There’s not even a ballpark figure. There’s no magic formula. There are just way too many factors to even BEGIN to estimate how much you should reinvest in a website.
The one thing I took from all this writing I did, was that you need a business plan or budget. This is because you need SOME sort of plan when it comes to investment or reinvestment in a website. Otherwise, it’s very easy to under-invest or over-invest.
But we’ll touch on that in a moment. First, I want to discuss why it’s impossible to come up with any sort of formula for reinvesting in your website. Then maybe you’ll be able to understand what sort of situation you’re in, how much you are able to reinvest, and come up with the formula yourself.
Your life, and particularly your financial situation, dictates how much you should be reinvesting in your website.
If you’re a balla affiliate who can lost $500k overnight and not even blink, then you’d be very comfortable reinvesting 100% of your income into your website.
However on the other side of the coin, you might be an affiliate that has 3 mortgages, and 18 kids. You rely on all income very heavily to feed your family or support yourself, in which case even 10% of reinvestment might be a struggle.
Ultimately you have to ask yourself: How much can I afford to reinvest?
Your Websites Rankings
Let’s say you are #6 in Google for your primary keyword, and based solely on this keyword you make $300 a month. You believe that if you get to #1-#3 you’re able to turn that $300 a month into $3,000 per month.
In a situation like this, you would most likely want to reinvest as much as possible into your website, so that you are able to rise in the search engines and meet that goal.
On the other hand – perhaps you rank #1 for “Cake Poker Bonus Code”. Your website is a keyword specific domain, and you’re making $3,000 per month on CPA payments. You really only want to invest what you need to, to maintain this sort of income. The percentage you invest back into your website may be smaller or larger, depending on how competitive the keyword is.
Your Websites Income Potential
I basically covered this in the last section, but just to reiterate: you need to look at the value of reinvesting. Don’t reinvest in your website “just because” – look for reasons as to why you should reinvest in your website, and what you are going to get out of it. You don’t want to reinvest 50% of your income into your website to earn $3,000 a month when reinvesting 25% will do.
Where To Reinvest
There are so many ways to reinvest in your website. Content, backlinks, graphics, consultants, advertising, design, analysis, SEO software are just a few examples.
When deciding to reinvest, you need to lay out exactly where you are going to reinvest, and what you are going to get back from it.
Backlinks, for example, which are primarily used to increase your website rankings. Where are you ranking? Where can you rank? How much do you need to reinvest to rank in that position? How much will you earn when in that position? And will that make it worthwhile?
Content. What’s the purpose of the content? Is it worth hiring a $50 an article writer as opposed to a $20 an article writer? Is content your main driving force to income? And if so, what sort of content?
I know people who start websites with below-average quality content. They hired writers for $6 an article, and the content is quite weak and not well-written. Yet they start making money from it. They spent $300 on 50 articles of below-average content, and they’re making $3,000+ a month from that website. The income is primarily due to visitors coming in from the search engines due to that content.
As they’re making money, they immediately decide to spend money. Out go the $6 an article writers. Now instead of $300 for 50 articles, it’s $300 for 6 articles. Simply because they’re making money, and they feel comfortable spending $300 on just 6 articles.
Yet they don’t sit back, and analyze whether it is worth it or not. In some places, quantity can be greater than quality. You need to sit down and really analyze your income, to determine where to reinvest, and what to reinvest in.
Your Income Sources
This is a huge, huge factor that really contributes to how much you should reinvest in your website.
If you’re promoting a poker room and earning CPA payments, then you may be willing to reinvest more into your website. This is because you’re getting an almost “instant” return on the money you’re spending.
If however, you rely more on revenue share, then you may want to lower the amount you reinvest. Long-term you’ll make money, but you never know the future of that poker room or affiliate program, and can’t fully rely on it. If for every $100 you spend, you expect to make that back in 6 months(and then everything else is sweet, sweet profit) you may want to keep your reinvestment to a minimum, because you just never know what will happen to that poker room or affiliate program in 6 months.
If you have a blog that relies heavily on AdSense, then it can be a lot easier to figure out. It may be that only a few pages on your website are actually making money via Adsense. So you can focus heavily on those pages, and those topics. On the other hand, if on average every page on your website makes $10 per month from Adsense, then you can look at maximizing your potential income by reinvesting heavily on a variety of content loosely related to your site. Again, it’s quantity vs quality with no clear winner.
The world changes. Things change in the world, and your reinvestment formula always needs to change depending on what’s going on in the world.
If you have a “buy silver/gold” blog, then obviously over the last few years you would have wanted to invest heavily in your blog. But now we’re getting to the point where it may make sense to hold back on the reinvestment.
If you run a website dedicated to a TV show that’s fast becoming a hit, then you may want to reinvest more. But as time goes on and the shows ratings dwindle, you may want to reconsider your reinvestment amount.
Always be sure to plan ahead for events outside your control, that may affect how much you reinvest in a website. I know a lot of people who learned this lesson the hard way, on April 15th, 2011.
Create a Budget/Business Plan
While there is no magic formula, given your personal and website situation and everything covered in this article(and honestly, I barely scratched the surface on this topic), you should be able to at least ballpark a reinvestment amount. Then you have a budget to stick within, and it will make you think a lot more about how much to reinvest, and to where.
The worst thing you can do, is have no plan at all. If your backlink marketing consists solely of “randomly checking and buying blog posts from affiliate forums” then you’re doing it wrong. You’re most likely overspending or underspending, and without any sort of plan you’ll never know.
The key thing here is to really understand what you’re reinvesting, why you’re reinvesting, and what you’re getting out of reinvesting.
Prior to writing this article, I spoke to one affiliate who makes about $10k a month on one of their casino sites. I asked them how much they reinvest in that particular website. They said they reinvest about $8k, primarily on backlinks.
I asked them what would happen one month if they didn’t reinvest that amount. If they went a month without buying a backlink or directory listing or press release.
They didn’t know.
They could be spending way too much on their website. On the other hand, they could be reinvesting too little. You can’t just set a budget and stick with it. You need to change it, experiment with it, and fully understand what you’re getting out of it.
Whatever your situation, come up with some sort of reinvestment plan. It doesn’t need to be set in stone – actually it should be the opposite of that. It should be a highly flexible business plan that you examine, analyze and change on a month by month basis.
How you go about creating this business plan is up to you. You can create a broad business plan based on your network of sites as a whole; you can break it down by a website by website basis, or even break it into categories. A certain amount for content, a certain amount for backlinks etc. Just be sure to create that business plan, with a clear allocation of how you are going to reinvest those funds.
And be sure to allocate some money for a BOTW Link 😉