Valuing Websites by Monthly Visitor Value

By | May 29, 2008

Online marketing is all about generating a high traffic towards your website. You spent long hours and sleepless nights in making your website attractive so that large number of visitors views your pages every day. If you don’t know the true value of your website’s visitors then the chances are you are unaware of your site’s actual worth. You must be able to evaluate your visitor’s so that you have an idea about the quality and value of your website. Therefore, valuing websites is important in website buying and selling business. You can use the following methods to assess the true value of your visitors:

Visitor value can be determined by the simple formula that suggests: Monthly Visitor Value is equivalent to your Monthly Income divided with the Unique Monthly Visitors. In more mathematical terms:

Monthly Visitor Value = Monthly Income / Unique Monthly Visitors

For the sake of clarity Monthly Visitor Value, Monthly Income and Unique monthly visitors are referred as mvv, mi and umv respectively.

Before you proceed to calculating the monthly visitor value you must find out your monthly income and unique monthly visitors. You must consider these aspects when valuing websites. They can be determined with the following methods:

Monthly Income: To find this out, add up all the money earned from your various products and services through AdSense, Paypal accounts. You should also include the earnings from affiliate and merchant accounts. The best method of finding monthly income is through generating reports from your website.

Unique Monthly Visitors: This can be done by your web hosting service that has a tool that can be used to inform you about your monthly visitors. These tools can provide you reports containing the number of times your site has been visited. If you are trying to find an easily available tool that is also simple to use, try Google analytics. You can learn more about it by searching from Google.

To assist you in valuing websites, we have provided an example of a successful tutorial e-books business:

Let’s suppose you sell tutorial e-books online for $30 per book and you have sold 40 copies. So, your monthly income from sales of tutorial e-books is $1200. You also found that revenue from AdSense, Paypal, affiliate and merchant account is $1500. Now your total Monthly Income is: $2700. By using Google Analytics, you discover your Unique Monthly Visitors are: 4000.

By inputting these various values into the formula, with MI = $2700 and UMV = 4000, we get:

$0.675 (Monthly Visitor Value) = $2700 (Monthly Income) / 4000 (Unique Monthly Visitors)

Each visitor viewing your website has a worth of $0.675. However, if this was a negative number, you would have to re-assess your marketing plans. You will need to improve your website’s sales through higher traffic.

You should aim at improving your Mvv trough various marketing strategies. Some of the tools that can assist you in achieving a higher Mvv include: Pay Per Click campaigns and paid advertisements. You should also try to increase your conversion rate. This can be done by increasing the number of customers who purchase your products.

With this simple yet effective formula you can find the true value of your visitors. This information can be extremely essential in determining your visitor’s worth which in turn can be used to assess the true value of your websites, assisting you in selling and buying websites. Valuing websites is important so that you can differentiate between actual price and true value of your website.

3 thoughts on “Valuing Websites by Monthly Visitor Value

  1. Silver

    Lets say you don’t have any income from the site but you get visitors then by your formula the site would be worthless. But that is not true, people sell sites all the time that have traffic but they have not monetized it yet and people are happy to pay for those sites especially if they are in the same niche and are doing PPC for that.

  2. Guy

    I think the whole idea of valuing a website is very hard to be fair, and you are right it would imply a site with no revenue is worthless. I have certainly bought sites with loads of traffic. Person selling just wanted a website of their own. Put on adsense and you can get a good revenue from it.

  3. Pagy

    I think the whole idea of valuing a website is very hard, You will get approximate number of visitors. Website valuation depend on Company Revenue and not on Website Visitors 🙂

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