A few weeks ago I received my first ever payment from Google Adsense in my bank account. While it was only $170, it represents a small but significant step to making money in a way that is completely independent of my time.
Making money passively has been something that I’ve been wanting to do for several years, but have never really made a start. For the last nine months or so, I’ve been quietly working on a website that initially started as a small experiment in Search Engine Optimization (SEO), but has grown into my first source of passive income.
My name is Nick McIntosh and this article is the case study that I wish I had read nine months ago. Let me help you benefit from my hindsight in how to set up a passive income niche website.
A few years ago, I read a book called the 4 Hour Work Week, which outlines a plan for untold internet riches. You build a website, sell a product that people want, get other people to do the work, make money and then go sit on a beach. The book has more to it than this, and I strongly recommend you read it, but that’s the headline.
I work in digital marketing. Which means I know a lot about how to build a website, how to market that website so that people visit it, how to assess the competition (the other websites that have similar information / products / services) and how to determine how much demand there is in the market.
In my job I work with companies and help them to understand how these things can help their business, and bring them more customers or sell more products and ultimately, make more money.
While there have been many times where I’ve done one or more of these things for a client, and done them successfully, I’ve never taken an idea from zero to profitable by myself. I always get called in to fix other people’s problems or help take a business project “to the next level”.
When my friends and peers discover how much knowledge I have in this area, they often looked at me with surprise and ask some variation of…
Nick, you know this stuff better than most other people, why aren’t you applying it yourself and working on your own projects (so you can go sit on a beach)?
There are many reasons for this, but a big one was simply that I was afraid. Afraid that if I tried, and failed, I’d be a fraud. The risk was that if I couldn’t build something by myself, what credibility did I have to encourage others to use these methods in their business? It took me a long time to find a ‘mental loophole’ or a way to trick myself into giving it a go anyway.
Back in February 2011, Google rolled out a significant change to its search algorithm – the Panda update. Google frequently makes changes to the way it arranges the world’s websites but this update had a big impact on the digital marketing community.
At the time, an extremely popular way to improve the search rank of a website was to use a tactic called article marketing. Panda appeared to devalue this kind of marketing.
Many people reacted to these changes by running around screaming “SEO has changed forever” and complaining. I attend a lot of industry networking events in digital marketing and it seemed to be a theme that came up time and time again over a period of a couple of months.
We don’t know what to do! SEO doesn’t work anymore!
Unfortunately no one seemed to have any hard data to say that article marketing would no longer work. While it certainly looked like the tactic might be less effective than it was, I couldn’t see any reason why it wouldn’t still work in the long run. The assertions that ‘the game had changed’ annoyed me, especially as they seemed untested.
I decided to test it.
I really enjoy doing experiments. I’ve tested exercise programs, sleeping patterns, diets and lots of marketing ideas – and by making this just another experiment, which no one expected to work anyway, and which could fail without consequence, I was able to skip around that whole “if I fail I’m a fraud” mental construct. Take that psychology.
I set two simple goals:
2 June 2011: Registered the domain “www.nettleteahq.com”
9 July 2011: Installed WordPress, and loaded the first content
30 July 2011: Ranked in top 30 on Google for the target keyword ‘nettle tea’
11 August 2011: Ranked in the top 10
17 August 2011: Installed Adsense
22 August 2011: Received 1st Adsense click, earning $0.50! I went on to receive a few more clicks and finished the month of August with $7.27 in revenue.
29 September 2011: Ranked #1 for the keyword ‘nettle tea’
As you can see, I missed getting the #1 ranking within the three month time frame. However, I’m still going to give myself a pass for getting there eventually.
As of March 2012, the site continues to rank #1 on Google, even though I added no new content to the site since 18 July 2011.
To date the site has received 27,484 visits, with a single day peak of 933, has earned $355.08 in Adsense revenue, (single day peak $29.78), $46.12 in affiliate commissions for product sales, for a total of $401.20 in revenue (which works out at 1.5 cents per visitor).
$400 might not sound like much, but I’m very chuffed as while I have invested a lot of time, and around $700 into the site, there is no reason it shouldn’t just keep ticking over and bringing in enough to cover my coffee habit, each and every day.
I haven’t put a price on my time as even if I had only made $1, the learning experience in of itself has been very valuable. Besides, if I wasn’t building the site, I probably would have just wasted the time watching cat videos.
If you want to look at a pure ROI, getting $400 back on a $700 “investment” within nine months is outstanding value, and assuming people keep clicking ads, I should make back my investment within 18 months, and have a saleable asset to show for it.
The high-level strategy for this kind of project is simple, and no doubt many will be familiar with the business model for a niche topic website, so you may want to skim this. But for those who aren’t here is the premise:
1. Brain storm a bunch of topics, for me a good topic is one that lends itself to:
3. Assess the competition, how many other websites already exist and how established they are in the market.
4. Build a website, and fill it with content that specifically targets the keywords people are searching for.
5. Market the content, so that the site ranks well in Google, and subsequently gets traffic.
6. Monetize the traffic by placing advertisements, selling products for a commission or developing your own products.
(7. Sit on a beach)
There are numerous guides on how to do each of these things, but I specifically followed a case study on How To Build A Niche Site by Pat Flynn, who wrote a highly in-depth series of posts about building his own niche site. If you REALLY want to know how to do all this stuff, I’d suggest you read them and watch his videos.
Unfortunately, Pat didn’t go into a lot of detail around keyword research, which is probably the most important thing to get right as it will determine your success later. For more detail on this area, I went through the first few modules of Ed Dale’s The Challenge training.
Even though I was following a highly detailed case study, there were a number of things I found really difficult – more from the amount of time required than anything else. Pat has a way of making everything look extremely easy and the amount of time that he suggested things would take seemed to be much less than what I could do.
On reflection, there are also a number of things that I just plain screwed up…
I would estimate that I spent 40 hours alone on keyword research in Market Samurai. Every topic idea I had seemed to be unsuitable and a dead end. I kept a tracking spreadsheet and I ended up thoroughly researching 46 different topics before I stumbled across something suitable.
After a few hours keyword research stops being fun, and there were several times during this where I was tempted to give up or settle for a topic that didn’t quite meet the criteria for a good keyword.
I screwed this part up – it should have been nettleteahealth.com or something, but instead I blindly copied Pat’s naming structure. The lesson from this, is of course that the domain doesn’t really matter if you do the marketing correctly, and there’s no need to blindly copy other people. Entrepreneurs-Journey succeeds despite the difficulty I’m sure many people have even spelling ‘entrepreneur’ correctly.
I hired a writer to create the initial articles for the site, based on my keyword research. While it was cheap ($10 for 500 words) and written by a native English speaker, on reflection it wasn’t of sufficient quality. I had it written in 1st person, in a way that told a story and tried to force engagement with the reader.
It would have been better if I had got the writer to do more research and focus on producing THE BEST content on the internet, at a comparable standard to Wikipedia. At the time I made the mistake of having the content written for Google rather than the reader.
One tactic I have seen used to great effect is where the writer’s personality comes across in a website. When you can “hear” the voice of the author and see a photo of them, you naturally become more engaged. So without really thinking about it I added a personality to the site.
What started as a pen name, quickly grew into a fake character with personality, photo and back story and ultimately I went too far and became uncomfortable with how I was presenting the information. This is one of the reasons I’ve been reluctant to share this story until now – the site didn’t feel honest.
I’ve since removed the “personality” and have begun working with another writer to help redevelop the content away from the 1st person conversational style so that everything is presented in an objective manner, even if that means people are less engaged.
Article marketing, the reason for this whole experiment is in essence very simple. You take 400 words of good quality writing, perhaps something like “how to grow white roses indoors”, and post this article on your website. You then re-write the article, changing it so that it has different words and a different structure, but ultimately delivers the same message.
Then you put this second article on an external website with a link back to your website. By linking back to your website, you are essentially “vouching” for your own content and telling Google that your site is of high quality, and relevant to the topic of “how to grow white roses indoors”. Google then ranks your website slightly higher for the topic “how to grow white roses indoors”.
For this strategy to be effective, i.e. get a #1 ranking, you need to do it a lot. I ended up doing it about 2000 times. Yes I’m serious. The more competitive the topic that you have chosen, the more links you will need.
Luckily there are some pieces of software that can help you automate this: article spinners and article posting services. An article spinner enables you to create many unique “copies” of an article, while an article posting service takes these unique copies and distributes them all over the internet for you, building your links.
Article spinning is a god awful horrible nightmarishly boring job that takes a long time. And if you want to do it well you have no option but to either grind it out, or pay someone. As a guide, it took me on average three hours of concentrated effort to thoroughly spin a 500 word article. I ended up outsourcing it and it turned out to be about twice as expensive to spin an article as it was to have the article written in the first place. Again, Pat made this look easy.
I broadly followed Pat’s guide on how to distribute these articles and your success will be largely determined by the quality of the sites you are able to post to.
Finally in terms of money making, nettle tea is not a good niche as it doesn’t have strong commercial intent. How much does a tea bag cost? But people still come, and some of them click on the ads or use the affiliate links, so the site makes money!
It costs money to do all the above. Something that many people and businesses outright baulk at. I was talking to a friend this week who has just spent 12 months and $30k traveling the world, and when I suggested that she invest about $500 and educate herself in how to build a website like this she was immediately reluctant.
Even though she works on websites daily, even though she has a thorough understanding of all things internet, even though she knows that it’s important to invest in your education, even though she’s a smart woman.
It was really hard to convince her that it would be $500 well spent.
There’s something that gets triggered in people’s brains when it comes to opening the wallet for this kind of project. For many I think it’s the intangible nature of education and the time separation between action and results.
It’s true that you can do many things yourself and save some money if you want, but for me the trade off was that if I went that route, NOTHING would have actually got done. By spending money I was more committed to seeing the project through, and by allocating cash up front I felt like I had an “operating budget” that was at my disposal.
So what did it actually cost me? Here’s a quick break down:
Market Samurai $150
Domain name $10 / year
Hosting $60 / year
Graphics & stock images $40
Article writing $115
Article spinning $200
One expense I was able to avoid was paying for an article submission service, as a friend had a free trial for a service and used me as a “test project” before applying it to his own business. If I do this again I would budget $200-$250 for this.
I have got no doubt that I have spent a couple of hundred hours on this project. But it’s now a couple of hundred hours of additional experience and understanding of what really goes into getting a site to rank and rank well. And it’s knowledge that I use in my consulting work for which I do charge an hourly rate.
But again, if you know upfront what this kind of project is going to cost you in terms of time and money, I wonder how many people would even attempt it.
For me, learning is fun. For many people, it isn’t.
I can totally understand why business owners and marketers feel confused by this world. I went into this knowing a lot, but I was still surprised at how long it took me to do things that others had said were simple. For example, article spinning takes hours of focused grind. Not fun. It’s work that pays dividends in the long run, but the process is tedious and a hard slog.
Facebook and Twitter are much more fun and much more sexy.
Expecting an internet novice to do this, and not get completely frustrated and give up, is a big ask. I know a lot of business owners who are in this camp.
But unlike Facebook and Twitter, you don’t need to feed SEO daily, in fact I haven’t posted any new content since July. I have a number of new articles that I will drip feed over the coming months to continue to build traffic, but I have literally done nothing for the last three months and people have still been visiting and still clicking ads.
It’s also very easy to get bogged down in the process and spend weeks chasing your tail trying to get things “just right”. I know I spent far too long on the design and appearance of the site, before it even had traffic.
For a business, the time is the real cost and the results won’t be apparent for many months. If you run a direct marketing TV commercial or print ad, you know very quickly whether or not it’s been successful. Same with email.
The problem with SEO is that there is a huge amount of upfront work for no immediate results – so it’s very easy to lose focus. I can fully appreciate why business owners get frustrated with SEO services – it’s a long term play but it’s often sold as a short term fix.
Realistically, I wouldn’t promise ANY results for the first three months, and require a minimum commitment of six months before even measuring whether or not your efforts have been successful. For many people, that lead time is unacceptable.
But the rewards are clearly there. Earlier this week my little website did $29 in one day. I couldn’t believe it. While that doesn’t sound like much, to give you perspective my rent is only $25 per day. And while it doesn’t generate that much every day, I can see the possibility that it might.
Finally, if you do choose to try this, it’s extremely important to take what everyone else says with a grain of salt, and don’t expect that you’ll be able to do what they have done. This case study included.
Pat’s niche website on security guard training is currently earning over $2,000 per month and while I’d love to say that my site might do this, I don’t see it happening any time soon. It’s also clear that some tasks will be quick and easy for you, and others slow and laborious.
Take your time and set learning goals rather than performance goals.
I might do this once or twice more, but building a portfolio of niche websites isn’t for me. It’s too boring. Yes, you can make money, but unfortunately if I’m not being challenged it doesn’t matter how much money is on the table, I’m just not going to stay interested.
It’s clear that you could do this over and over again and slowly crank up your passive income. If you did this consistently for three or four years, I think it would be quite feasible to have a portfolio of 30 sites, and if you could average only $5 per day per site, you’d be clearing more than $50k each year with a very minimal ongoing time commitment.
A question for you: Have you tried to build a niche site? How did it go?
And learn how to build a better blog.