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Niche Site Duel: Investigating a Sudden Drop in Earnings

Niche Site Duel: Investigating a Sudden Drop in Earnings

By Pat Flynn on

It’s been a while since I last published a dedicated update about my niche site, securityguardtraininghq.com. A lot has happened in the world of search engine optimization since the last update and there’s a lot of interesting data to report and thoughts in my head that will determine where I go with this site in the future.

For those of you who are unfamiliar with this particular project, it’s a site that I created from scratch as part of a publicly documented challenge which later became known as the Niche Site Duel.

From keyword research to niche selection, all the way through building the site and earning from it – it’s all documented on the hub.

Today I’m going to share some interesting updates about the earnings and traffic on the site, and walk you through the process of trying to figure out my next steps.

Earnings: Have I Hit My Peak?

Since I started the site, it has earned a total of $23,543.79.

Earnings primarily come from Google Adsense (96%), with additional earnings coming from a job board, private advertising and Media.net.

$23.5k from a niche website in under 2 years is excellent, but looking at the trend of earnings-over-time, I can’t help but be a little concerned:

Earnings over Time - SGTHQ

As you can see, since the beginning of 2012 the earnings have been on the downward slope, which is never good.

Although I’m still earning over $1,500 per month (and on pace to do nearly the same here in May), I’d rather turn things around and continue to climb upwards like what was happening all of last year.

In order to turn things around, we have to first examine what may have caused  this particular downward trend.

Traffic, Maybe?

The first and easiest thing to examine is the traffic that’s coming to the site.

If the traffic graph follows the same path, then we can determine that the earnings have decreased because the amount of traffic has decreased – in which case we would then have to dig deeper to see what’s causing the drop in traffic. For instance, it could be a drop in search engine rankings – possibly due to recent changes in Google’s search engine algorithm.

That would make sense, but let’s head to the graph:

Visitors over Time: SGTHQ

Hmm..after January 1 2012 the traffic does decrease slightly, but the drop is not nearly as dramatic as it was with the earnings, and it starts to go back up again in April.

It’s good to know that Google is still liking this site.

Even after all of the algorithm changes, including the latest penguin update (which I talk about in my latest monthly income report, including what happened to a couple of my other niche sites), it’s still ranking #1 for it’s primary keyword and continues to pull in traffic from over 6,230 different keywords over the past month.

So if it’s not the traffic and rankings, what is it then?

The next logical thing to check would be the trends at the point at which money is earned – Google Adsense.

There are three main metrics of interest within Adsense:

  • Click-Through Rates (CTR)
  • Cost-Per-Click (CPC); and
  • Revenue Per  1000 Impressions (RPM)

Click-Through Rates, Maybe?

If click-through-rates follow the same path as the earnings graph, then we can determine that the earnings have decreased because the number of people clicking on ads has decreased – in which case we would then have to dig deeper to see what’s causing the drop in click-through-rates.

It’s hard to get an overall picture of the CTR with all of the different ads on the site, each with their own specific locations, and some not showing on each page. So instead, I’ve taken 3 specific kinds of top-performing ads on this site and put them each into one graph against each other. Those three ads include:

  1. The set of Link Ad units across the top of all posts and pages, including the homepage.
  2. The large rectangle ad unit on the homepage, justified to the right hand side within the first paragraph of text.
  3. The large rectangle ad unit on all inner posts, justified to the right hand side within the first paragraph of text.

And here’s what we get over time:

*Note that before March 2011 I used a different set (sizes and placements) of Adsense ads, which is why the data here starts “late”. Also note that the actual Click-through Rates are hidden to comply with Google Adsense’s terms and conditions.
CTR Over Time: SGTHQ

This is where it starts to get interesting…

Besides the fact that you can see which type of ads have a higher click-through rate than others (results may vary for your own site, however most other sites I’ve worked with follow a similar pattern), you can see that there’s a drastic drop in CTR during the past two months across the entire board.

If you look at the Link Ads, you can see the CTR was basically cut in half, and almost just as much for the other ad units.

This pattern reflects the earnings graph almost exactly. Although it looks like the earnings started to dip in January, January was actually the peak, and so a little fluctuation around a peak is normal (like in February), but a continuous and dramatic drop like in March and April is something to be worried about.

Click-through rates seem to be the issue – or at least part of it. To make sure, let’s look at how the cost-per-click has varied over time for each of these ad units.

CPC over time: SQTHQ

CPC hasn’t varied much at all, even through the beginning of the year, so it’s definitely the click-through rates that are accounting for the drop in earnings.

Based on this, it’s easy to predict what the RPM (revenue per 1000 impressions) will look like:

RPM over time: SGTHQ

It’s scary to see such a sudden drop (almost by half!) in CTR and RPM in such a short period of time. As it was happening (during the months of March and April), I could tell something was up when I was casually checking my Adsense account – but to see it in a time graph like this is crazy – especially with over a year of consistency behind it.

So back to the big question:

What caused the sudden drop in click-through rates?

In other words, why aren’t people clicking on the ads as much as they used to?

Reasons for a Lower CTR

With Adsense, there are a number of things that are actually out of our control when it comes to the CTR.

Most obvious are the types of ads that show up on our site and within our content.

With advertisers bidding behind the scenes around the clock on the Adwords side of things, certain advertisers that garner a higher click-through rate go in and out of sight. Some may even end their campaigns completely which can dramatically effect Adsense earnings for us publishers.

Furthermore, the copy of the ads, which is again out of our control, have a lot to do with CTR. One little punctuation can be the difference between hundreds and thousands of dollars over a long period of time.

If nothing else was done on the site, and everything else remained the same, then it would be safe to say that the lower CTR was something external and out of my control.

Although this could have happened, I suspect something I did on the site had a direct impact on the CTR instead.

Here are the recent changes I’ve made on the site that may have contributed:

I Added Private Advertising Banners

In order to diversify my income streams, I decided to attempt selling banner ad space on the site to companies looking to get in front of some of my traffic.

This started at the end of January, 2012.

Hmm…

I landed a few advertisers right away, but as you can see the Adsense income started to go down right around the same time.

It’s hard to say if this is directly correlated – but it would make complete sense: more items to click on, including images that may be more eye catching than an Adsense advertisement, and therefore less clicks on the Adsense ads.

With the banner ads I don’t earn per click, I charge a fixed monthly fee instead.

If the additional private advertising income matched or exceeded the loss in Adsense earnings, then it would be wise to continue, however, it seems like the losses far outweigh the gain.

I’m still a huge proponent of diversifying the income streams – as most of us know, especially when working with Google, it’s not wise to put all of our eggs in one basket. There has to be some kind of balance between what’s making money and staying diverse – a balance that I have yet to find with this particular niche site.

I Added Media.net

To diversify even further (and apparently dilute the effectiveness of Adsense on my site) I added another ad platform, Media.net, on my site starting March 12.

Hmm…

Media.net is similar to Adsense in how it works, so it was great to see that immediately Media.net started to earn some money – so for diversification purposes it was doing it’s job – but probably for the same reasons as with the banner ads, my Adsense income dropped.

Adsense is still the top dog when it comes to pay-per-click ad networks.

The Next Step

What would happen if I went back to how it was before and took out the banner ads and media.net?

I’m curious, just as much as you are, and for the next few months (starting June 1st, after banner ad deals expire) I’m going to give it a shot and see what happens.

It should make for an interesting test, but it’s good to see that there are still other options out there for monetizing a site other than Google Adsense, although not quite as profitable.

Maybe it’s just not the right time to start exploring those avenues just yet – or at least in the way I was doing it.

Maybe I need something bigger.

The Next Level

I’m still urgently looking to increase the income coming from this site – I believe there’s a lot of potential here, something maybe bigger than advertising in general.

It’s time to start thinking about taking it to the next level.

The next level would include things like:

  • Training courses (or becoming an affiliate for training courses)
  • Geographical listings of all security guard training facilities
  • Geographical listings of all security guard companies
  • More articles being posted
  • Updated news about the industry
  • In-depth information about different positions and respective salaries
  • And probably a whole lot more.

Like I mentioned at the end of my last income report, the most successful websites are the ones that “dominate the niche and become the ultimate resource” for a particular industry.”

It’s great that I’ve been able to take this site to the top of Google and begin earning some decent income from it (especially working less than an hour a week on it), but it’s time to figure out how I can make an ultimate resource, because the more I can do that, the more people I will help and as a result, the more money the site will earn.

It’s time to start brainstorming and taking action!

As always, I’ll keep you posted on my progress.

And to finish up, it would have been very easy for me just to show you a graph of my CTR and RPM and say “this is what happened, why it happened and what I plan to do about it”, but I really wanted to go in-depth with you today so that you can see exactly what my thought process is like and how important it is to keep track of anything and everything that’s going on with your site.

Cheers, and have a great weekend!

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