Charles: In this episode of the Business of Ecommerce, I talk with Chris Parker, the founder of whatismyipaddress.com. This is the Business of Ecommerce episode 15.
Welcome to the Business of Ecommerce. The podcast that helps ecommerce retails, start, launch, and grow the ecommerce business, I’m your host Charles Palleschi. I’m here today with Chris Parker, the founder of whatismyipaddress.com. Chris is the founder of WhatIsMyIPAddress.com, one of the top 3,000 websites in the US. What Is My IP address gets about six million visitors per month which Chris has used to make a full time income using affiliate sales. I want to bring Chris on the podcast to talk a bit more about this. Hey, Chris, how are you doing?
Chris: Hey, Charles, doing great, thank you.
Charles: Great to have you on. I want to talk about your career, your past. I know you started in typical ecommerce and then you kind of moved to starting the site and then from there, you’ve been using the site and moved to an affiliate model. It’s actually a reverse where you hear a lot of people going from affiliate sales to ecommerce sales, so it’s pretty interesting, I want you to kind of talk more about that.
Chris: Sure, I’d love to talk about it. I started back in the late ’90s working for an online catalogue retailer at Club Mac—elderly Mac people will remember—it predates a lot of people on the show I’m sure, but that was a great experience working in sales there, and with the advent of the internet, we put up together an online store and I got to be able to help with that both on the web development side as well as on the affiliate management side. So being on the flip side but to being able to monitor those online orders, watch out for fraud, making sure everything were shipping, and deal with a lot of customer service questions.
Charles: You were the one then on that that’s receiving the orders from the different retailers?
Chris: No. We were the retailer, we sent the orders for the customers.
Charles: From the customers. Got it, okay.
Chris: It’s not too typical ecom web, what is today a very typical ecommerce business. It was really an interesting time. One of the things I wanted to do on my own during that time was dabble with my own ecommerce, and so I started a website called discountbibles.com. And so help people find a Bible that they were looking for, and ship it out to them.
Charles: And the code is discount bibles as well, not just…
Chris: You can’t sell anything at full price.
Charles: You need to buy Bibles at a discount, okay.
Chris: Exactly. I was competing with Amazon at the early days. One of the interesting things about that was I was trying to do this while working a full-time job. It was letting those few orders come in during the day, at night I have to place my order with the distributor, at lunch the next day, pick them up from where they were getting shipped to, the next night, scramble and box them up, the next day at lunch, take them to the post office, or FedEx, or UPS, and that was my routine for about two years.
Charles: Back in the day, people forget how manual some of these steps were, and even printing labels and some of these things were just very laborious.
Chris: There was almost no automation. Every credit card had to be manually typed in, manually ran through the credit card processing software, every Bible had to be individually boxed and sealed by me in my living room.
Charles: Wow. As far as volume of orders, do you have any memory of what you were getting?
Chris: At the peak, though the last year that I ran it, I think it was about 200 orders the last month. It was about 10 to 15 orders a day. It was not just five minutes here, five minutes there, it was a couple of hours boxing stuff up, a couple of hours putting the stuff together. It became a second full-time occupation. Unfortunately, the order sizes were $5, $10, to $20.
Charles: You typically don’t buy five Bibles at once.
Chris: Definitely, not.
Charles: Hopefully, not many people are returning them, so at least on that side.
Chris: There unfortunately were returns, that was a whole house and I pick them back up, are they in good enough condition that I can resell them again, or do I have to send them back, or is it just inventory shrinkage and I got to toss it or donate it to someone else who might use it for free.
Charles: That now, we’re in the early 2000s?
Chris: Yup, that was in the early 2000s. Honestly, it just got to be too much for me to be able to manage this. There’s got to be a better way to do this. I can’t scale this up, there’s not enough money to quit my day job, it’s not making enough money that it’s making a significant difference to my lifestyle. One of the things that I looked at doing was coming in…
Charles: Do you recall about how much money out of those 200 orders a month? Do you remember any of those numbers, profit wise?
Chris: I remember the top month was about $12,000 in revenue. Back in the day, buying in small quantities, I could make about 30 points margin on it which was actually pretty good. It was about 30% off retail, 30% margin. It was a couple thousand dollars a month but I also got to pay for the boxes, pay for the packing tape, maybe I made $2,000 a month at the end of the day.
Charles: It probably wasn’t a road to kind of 10xing that, 100xing that. That was it.
Chris: Yeah, that was it. I definitely spend money on advertising and driving more traffic. But if they drove more traffic then I’ve got to hire people to box stuff up, and that would probably be it for my margin, and then it would be really tight. One of the things that I switched to was, I switched to becoming an Amazon affiliate. Rather than me shipping it, instead of adding it to the cart on my site, it just added it to an Amazon cart.
Charles: Okay. It was completely just affiliate links at that point, but you were still running ads to the site.
Chris: Correct. They’re still driving a little bit of a display advertising to the site, kind of hard in that space. There weren’t a whole lot of Christian-themed websites that you could run display advertising campaigns on. It was probably pre-AdWords.
Charles: I think it was still on before they bought AdWords. The name is eluding me right now, but before Google bought them and then before that, you need to even go to the individual sites and strike up a deal with each site, and that alone was working.
Chris: Yup, and most of those deals where you had to give them $5,000 or something like that, and maybe it got you three months but no one would do a one- or two-week trial to see how it worked because it was labor intensive for everybody in the entire process. It wasn’t the automation that we see today.
Unfortunately, for those that have been in the Amazon space a long time in California, Amazon dropped all our affiliates back in the early 2000s because of tax issues. They didn’t want to have to charge sales tax to their customers in California, so it was either charge sales tax or get rid of all your California-based affiliates. I was a California-based affiliate and it was basically, overnight your business was done, you’re gone, tough luck.
Charles: Yup, but at this point, you still had your day job. Your side gig was basically, wiped out but at least you weren’t flat done at that point.
Chris: Yeah, that was very fortunate that doing, particularly the affiliate portion of it, made it easy to be able to do it as a side gig because I didn’t have to spend the hours boxing, shipping, packing, returning emails, processing credit cards, all the day-to-day business I didn’t have to do it because Amazon was doing it.
Charles: What do you spend your time on at that point or were you not spending that much time on the business, you’re able to kind of just set it and forget it?
Chris: I wasn’t spending that much time on the business. I had a full-time job that was growing, responsibilities there were growing, and trying to live my life. It’s nice having a little side gig and affiliate revenue that would make you an extra $1,500 a month when you’re in college, and a young adult, it’s paying off debt money.
Charles: Even if you’re not doing any work, going from actually doing the pick and pack yourself, to just having Amazon do it for you, not the worst thing.
Chris: It was definitely like, “Hey, this isn’t bad.” until it disappeared.
Charles: Yeah, and then it sounds like you wanted to kind of move to the next thing from there.
Chris: Yup, so after a couple job transitions, I had—on a fluke—bought the domain name whatismyipaddress.com. I was doing some IT stuff and I need to know what my IP address was at the office and at that time, Google didn’t answer that question for you, so I was like, “Let me go out and buy a website to do this.” I think I launched that in 2000 with no intent of ever monetizing it, really no intention ever of putting content on it. But over the years, I started, “Why is the hard drive getting full on this machine?”
Charles: You didn’t buy it from someone, you just know who’s using it at that time, you just saw it for sale, $799 or whatever it was, just purchased it, that was it?
Chris:Yup. I bought it through, I think, Network Solutions. I think they charged $80 a year or something ridiculous by today’s standard rate for a domain name. You had to find your own DNS providers. You had to do a lot of technology to get a website up in those days.
Charles: Yeah, buying a domain was not such a trivial, “Go to GoDaddy and put in your shopping cart.” It took quite a lot more effort than today.
Chris: Yup, for better or for worse, it’s very simple now. Even putting together a website now with WordPress or one of the other CMSs out there. It’s almost trivial to have an online presence for your business in a matter of minutes.
Charles: Yeah, so back in 2000, you had the foresight to actually go out and find this, spin up the site and get it going.
Chris: Yup. I started running out of hard drive space with that machine, they couldn’t figure out why. I did a little bit of digging and found out, “Oh my gosh, there’s lots of people visiting this website.” I cannot forget how I’m going to do with this. It was just happenstance. I started researching do display ads…
Charles: And at that point, was the website doing anything at that point? Was it actually providing IP address?
Chris: All it did was show the IP address, that’s it. There was no information, there was no, “What is an IP address?” there was no learning, no education, just the number showing up on the screen.
Charles: The internet in the early days, the value was very low for what a website did. What Is My IP Address just gave you your IP address.
Chris: And the people that were coming to it were probably very happy with it. It was doing exactly what they expected it to do. It went there and it gave them exactly what they were looking for.
Charles: Did you have any idea what kind of volume you’re getting back in the early days? What kind of traffic?
Chris: Well obviously, it started from zero, it was maybe a few thousand page views a day, but in those days, there was a non-trivial amount of traffic. Today you can get a lot of traffic pretty quick with so many people on the internet, but at that time it was, “Wow, this is a fair amount of traffic. I should do something with it.” which led to the challenge, “Okay, how do you monetize someone looking for their IP address?” It’s not someone coming and saying, “I want to buy a new computer,” it’s not someone, “I’m looking to buy a phone or a car,” they’re just looking for information, how do you monetize that. That led me to doing some research and finding out that there are companies that, “Gosh, I’ll just put a little code on my website and they’ll put a banner ad on there for me and pay me a percentage. I don’t have to find people to advertise on the site. This is this is easy-peasy.”
Charles: That was the early 2000s when this banner ads got their start, that’s when they became the thing.
Chris: And it was easy. There was no support I had to offer. There was no product to ship. There was no inventory. Didn’t have to pay anybody. It was just small amounts of money coming into my bank account every month–this is great. I started trying to figure out, “How do I grow this?” Well, I got to put more information on the site. I got to tell people what is an IP address and start educating people on things and put up an email address on the site. “Hey, if you’ve got questions, email me.” People started emailing me questions, and I started answering them and using those as criteria for articles. One of the things that people kept asking me was, “Hey, I’m trying to access my computer at home while I’m away from it. How do I do that?”
Charles: This is content marketing—very, very early days, you’re talking now.
Chris: Very, very early days. I wasn’t even thinking of running ads for the site or anything. It was just, “Hey, this is kind of fun, this is interesting. I’m making a little bit of money trying to answer some questions.” Being a geek—that’s kind of an easy thing to do. People started to, “I need to access my home computer while I’m traveling for work or at the office. How do I do that?” I’m like, “Well, I don’t know. Let me find out.” There was pcAnywhere at the time so, I started to find out that pcAnywhere had an affiliate program that I could put a little link to their site on my site, “Hey, if you’re trying to figure out how to access your machine you can buy this software.” and make a couple bucks. I’m like, “Hey, this is great. No inventory, no credit cards to process, no returns to process.”
Charles: On top of the banner, now you have another just affiliate link, some people clicking on it, so you’re talking hundreds of dollars month.
Chris: At that time it was hundreds of dollars a month and then over the years, I’ve just continued to grow the site. GoToMyPC became very popular—and that was a great affiliate program—I was probably getting a number of sales a day at $10 commission per sale. That was kind of the, “Wow, you could really make some money doing affiliate sales. Okay, how do I continue to grow this?” Over the years, built out quite a bit of tool on the site. The traffic has gone up to about, I think as of last month, about six million people a month coming to the site from all over the world which has its own challenges. It’s easy to monetize US traffic. International traffic becomes a little more difficult to monetize.
Charles: Yeah, it’s less targeted. The US advertisers might not even work in some of those different geographies. Yeah, you need to almost find people per country. There’s a whole host of issues there when you start moving outside.
Chris: There’s plenty of companies that you work within the US to monetize traffic; to monetize display. Google AdSense with its advent in, I think 2003, 2005 something like that, I think I joined in 2006, that became again another one of those easy ways of, “Okay, set it. Forget it. I don’t have to have a sales team trying to sell ad space on my site.” It’s just all automated which makes it an easy occupation when it’s running in the background and it doesn’t require your day-to-day attention.
Charles: Where were you at when you decided, “Okay this is time to become my day job and this is going to be my thing.” Where were you at then?
Chris: It was probably about seven years ago where I was making as much money on my side gig as from whatismyipaddress.com as I was making from my day job. It was like, “Okay, I can still kind of do both.” I wasn’t sure that by quitting my day job, I’d actually be able to make that much more from What Is My IP Address. It was like, “Well, I’m sure somewhat intentional, make a little bit more money, but I don’t know that quitting my job I’ll be able to double my revenue on the website by quit my job.
Charles: This is 2010, 2011?
Chris: This was probably around 2012 or so. Unfortunately for them—my daytime job—they started struggling with the financial crisis. They couldn’t afford to keep me on full-time but they still wanted to keep their business afloat and continue running, so they said, “Hey, can you contract with us for 20 hours a week?” To me, that just happened to be like, “Hey, yeah. I can do that.”
Charles: Yup, it’s almost perfect, now you put a foot in the pool but not jump all the way in head first and try it to see how it goes.
Chris: Exactly. What at the moment seemed like, “Oh my gosh, how am I going to pay my bills?” That’s the immediate reaction was that of like, “No, I can’t do that. I need to get a full-time job.” My wife and I talked about it. “Well, I’m making decent money on the side business and yeah, we’re taking a pay cut because I’m not going to be working full-time for them anymore, but if I put 20 hours a week in on this, an additional 20 hours a week on this, I might be able to grow this.” I did that with them off and on for a couple of years.
The economy went up, the economy went down, so the hours with them, at one point, went back up to 40 hours a week, but in 2014 they’re like, “We can’t keep the doors open.” At that point, I was like, “You know what, I’m going to jump in full-time,” and it became my full-time gig in 2014.
Charles: You hear that a lot where you have something else going on, you’re not ready yet but there’s that catalyst, that little push you need to say, “Okay, it’s either now or it could be five years from now, but this is the moment. Let’s just try it.” Worst case, you’re an IT, you’re in California, you could probably get another job. It wasn’t going to be. “If this doesn’t work,” you do this for six months and realize, “Okay, this isn’t what I want to do.” You’re done. You can just get another job.
Chris: Yeah, and that was what my wife and I talked about, “Let’s try it for a year and see how it goes.” I hadn’t work from home before. I didn’t know what it would be like to sit in the house and hang out with the dog all day. It might get a little stir crazy or putting 40 hours in on the week on the website might not generate more revenue. If it only makes 5% more at 40 hours a week, it’s probably not worth it, it’s better to go get a day job. But like you said, if the company I was working for hadn’t struggled, I probably wouldn’t have made the leap myself.
Charles: You hear that all the time, that exact set-up.
Chris: It was that that push that I needed like, “Okay, I’m ready to do this. I’m going to try it.” it’s been a blast ever since. Having that extra time—that 40 plus hours a week to work on this—allowed me to really build much better relationships with my vendors because I’m available to talk to them, I can interact with them on a regular basis as opposed to, “Yeah, I’ve got 15 minutes on my lunch break where we could talk for a little bit or hammer out a few emails.”
Charles: While you’re in the stairwell and you’re trying to make the call.
Chris: I had a few days like that where it’s like, “I’ve got a 15-minute break. Let me run outside and make a…Oh, I got to get back.”
Charles: Yeah, returning a professional call from the car and someone’s next to you beeping.
Chris: Exactly. It’s hard to be a professional in those types of situations. It’s been a blast making that transition.
Charles: That was what year?
Chris: That was 2014.
Charles: Okay, 2014. That was the year that your full-time work was done and this is what you’re doing now.
Chris: Yup. Wow, it’s already been four years. When you say that out loud, it sounds different.
Charles: It’s always amazing at the beginning when you say, “Four years now from now,” it sounds so far away, but when you actually start doing it and you look back four years you say, “Wow, this has already been four years. It’s amazing.” It’s different in reverse. Now, when you say you’re talking with your vendors on a daily basis and that’s helping sales and affiliate, who are you talking to, and what’s your day look like?
Chris: When it comes to my affiliate relationships, they’re mostly companies that are offering VPN services, particularly in this day and age with net neutrality kind of going away, people being paranoid, not so much in the US, but in a lot of countries, people are really concerned about what their government is doing. Their internet is censored, they can’t get on YouTube, they can’t get on Facebook. People want to have that kind of safety, of knowing, “Okay, I want to be able to access the content that I want to be able to access but I don’t want to go to jail.” Or business travelers, they’re traveling abroad and it’s like, “I don’t want some sketchy hotel seeing what websites I’m going to or some compromised network somewhere maybe getting my bank account accessed.”
Charles: Even in US hotels, you’re exposing yourself, on a large hotel, to everyone else at that hotel. Even just pulling, like you said, email or anything like that, connecting back to the office, a lot of people even here, they own VPNs and it helps to protect yourself when you’re traveling. I agree with you on that.
Chris: VPNs have become a topic that a lot of people these days know about when I originally was starting to promote VPNs. It was maybe people looking to do a little more shifty things, or people outside the US trying to access Netflix, and content that they specifically couldn’t in their own countries. But now a lot of business people are just day-to-day—people just not trusting the WiFi at their local coffee shop, not trusting the hotel that they’re at, you’re probably good to be wary of those things.
Charles: Even I know, back in the day, I was in financial software, and that was a requirement when you’re traveling. If you were doing anything business related, you’re on the VPN back in the office, and everything came out of the office IP, and you would actually want to find out what your IP address is to make sure it was coming out of the office IP and not your random hotel or wherever you are at the time.
Chris: Honestly, that’s a lot of the traffic that we see. They look at their IP address when they’re on the WiFi, they spit up their VPN, and they go back to the site and like, “Okay, we’re on the coffee shop. I’m now back in Southern California or I am in some other country where I’d rather be. I’m not showing that I’m on my WiFi.”
Charles: You spend time talking directly to a VPN merchant, someone selling VPN software. Are you trying to get better terms of them or just kind of build a relationship? What do you spend your time on?
Chris: It’s all of that. They’re more in touch with what their customers are looking for. They’re in touch with what the current search phrases are that they’re really converting well on. Every company converts on something a little bit better, different than the other ones. Some VPN might allow peer-to-peer file sharing and so working with them to develop content that talks about why their particular VPN is good in conjunction with peer-to-peer file sharing and working to build up that content where someone else is. Now, we don’t allow any peer-to-peer. We’re looking more for business travelers and things like that, so building out content around what works for them.
The natural sort of thing is, as that relationship grows, you see better conversion rates, more sales, and at that point, companies are more open to higher commission rates and things like that. Generally, asking them upfront, “Hey, give me more money.” they’re not going to do it. “Why should we give you more money? We want to see more value from you.” and so it’s working on relationships like that.
Charles: Let’s say, people that are sitting at home right now and they’re listening and they say, “It sounds great. I want to do this.” In terms of getting started, what sort of numbers are even in the realm of making this workable? Obviously, it’s the CPM that you’re charging for?
Chris: Well, I do have CPM ads on the site that run through a variety of networks, Google AdSense because I don’t want to have a sales team. I use Google AdSense and then there’s a newly emerging technology called Header Bidding that allows a variety of other ad networks to compete against AdSense so rather than just saying, “Hey, you get what you get. The affiliate rate with affiliate rate is.” They’re bidding against AdSense for that impression.
Charles: Okay, so they’re going on trying to shop around. If AdSense wins, it displays AdSense. If they can beat that CPM, they display their side.
Chris: Yup. Then it falls back to–there’s the traditional falling back to someone who pays me ¢3 per 1000 people or something like that. The CPM rates for US traffic on certain pages of the sites can be $12 or $15 per 1000 impressions, and that’s just on display. Most of the VPN relationships either work on a cost-per-action basis where it’s a single action, so when they buy, there’s a one time commission, and some of them work on a renewal commission basis.
I personally like that because I think it puts me as the website owner, puts my interest more in tune with what the VPN partner’s interest is in, they’re looking to retain customers for years, not to get a single sale, and then the client disappears. Kind of that renewal basis is, you get a commission on the sale and then every month or every year that that customer renews with them, you then get a recurring commission.
Charles: In perpetuity?
Chris: In perpetuity. If I’m helping them build a great quality customer base, it could be five years’ worth of commission off of a single sale.
Charles: The more of those you get, you kind of start laying your foundation, you still have the bumps but they’re not as aggressive. You know you have a base of x every month and that’s coming in no matter what. Then you can start looking to display—and maybe have a good month, maybe not so much—but at least you have that base.
Chris: Yeah, definitely. That’s one of the reasons why I like that model is that Google shifts their search engine results around. I’ve been lucky I haven’t had any significant hits based on algorithm changes, but get on either webmaster websites, and you know that Google can change the algorithm and you can lose 30%, 50% or even 100% of your Google search traffic overnight. If the traffic disappeared tonight, there’s at least revenue coming in for some period of time which makes figuring out what to do next or how to deal with it a little bit less stressful.
Charles: When you said there’s never been any hits with Google, I know at one point they started showing…
Chris: Significant.
Charles: Significant, okay. When they started displaying their IP address, was that any change to you? Because I know now if you ask Google, it does come back with a response, but you show up in on top.
Chris: In the top, whatever it is, depending on where you are or was it personalized. Initially, I thought that was going to be the death of my business.
Charles: When was that?
Chris: We have probably been five or six years now, that was one of the first knowledge graph response things that they did in starting to show the IP address.
Charles: Was that before you left your full-time job?
Chris: Yes, that was before I left my full-time job. It was at least four years ago.
Charles: So that at least, “I just delved the impact of that a little bit,” or was it still like a, “Wake up and oh, wow?”
Chris: It was a little nerve-wracking at first, but just regardless because I thought, “Oh my goodness.” Even if it’s a side business, you never want to lose your sidekick. I thought it was actually going to be a pretty horrific thing but it really, probably only hit traffic maybe 5% or 10%, maybe 15%. There’s a couple of reasons for that; some people, they didn’t know what their IP address was and they’re looking more for the geographic feedback of the map that we have on the site. Google doesn’t tell you where they think that IP address is. “Here’s a number.” and you’re like, “Well, is that one mine or is that someone else’s?” “I don’t know.” For the people that really were just looking for the number, those are the people that would hit my site and leave without ever clicking on an ad anyway.
Charles: Okay. It might have lowered the actual page view slightly but not the revenue that went with it. The profitable customers still came, they hung around the side, they wanted to dig a little deeper, but the people that we’re just bouncing, they might have actually helped you a little bit there.
Chris: Yeah, it definitely helped. If I look back at my analytics for the time, definitely page views per visit increased because of that. The people that would have just hit and gone, they’re gone, yet the people that are still remaining are the ones that are engaging with the site. Ultimately, again, one of those things that at the time it looks like it’s going to be, “Oh, this is going to be bad,” it turned out to actually be a beneficial effect.
Charles: I can imagine, I’m just guessing here, but the affiliate probably makes up a much larger chunk of the monthly revenue than the display.
Chris: It’s actually the other way around. Unfortunately, the display is the larger portion of revenue. It’s a little bit different if you were to compare my site to let’s say, one of the VPN shopping sites out there. They’re not running display on their websites, but their conversion rates are going to be significantly higher because someone’s at a different place in the shopping cycle. If you’re going to a VPN comparison site, you’ve already made the decision, “I’m going to buy a VPN, I just need to make my decision as to which.”
People that are coming to my site are probably—a lot of them—aren’t even aware that VPNs exist, and so there’s a bigger education cycle that has to happen. I’m catching people significantly earlier in the shopping phase of, “Oh, a VPN? What’s that? Oh, that’s kind of interesting.” As opposed to, “I’m ready going to buy, I’m just looking for a coupon code.”
Charles: Interesting. I did not see that coming. Now, just kind of in general term CPMs—and I ask because people are probably sitting there thinking like, “How many pages would I need to build to make a go at this?” Everyone’s, “6 million.” obviously, that’s a lot, but people are trying to figure out, “Okay, do I need 1,000? Do I need 10,000?” Basically, at what point they could get enough paid views to replace their income. That’s probably the basic question people ask in their head. What kind of average CPM rates so people can start triangulating into what they would need to do?
Chris: I’ll give you the typical webmaster response, it depends. And while one wants to hear that, that really is the answer.
Charles: What does it depend on?
Chris: If your website is comparing VPNs, that’s a good example, even if you’re running display ads, the people seeing those display ads, they’re ready to buy, they’re at a different point in the shopping cycle. Whereas, people coming to get, What Is My IP Address, they’re not looking for anything. It’s a matter of, “Can this banner ad catch their attention on something that they might be interested in?” It really depends on the topic of the site, and the context that whatever that topic is in, and then the amount of traffic.
Obviously, the US traffic is always going to be better than Argentina, Central America, things like that. Usually, the top ones are US, UK, Australia, Canada, and New Zealand. You can sometimes throw in Israel and South Africa in there. Outside of those countries, it can be really hit and miss. Even with good ad networks, it can be really hit and miss on being able to get good CPMs.
Charles: What would you consider is a good CPM? What’s the range of good on one side and just super low on the other that you’ve seen?
Chris: I have worked with ad networks—they’re called weather site traffic—it’s kind of after everyone else has taken their shot at the inventory. I was getting paid ¢5 per 1000, so for 1000 ad views, I made ¢5. Again, I had a very international audience. That’s probably not indicative of what most people would see. I think when you’re talking US audiences for a site where there is interest in the specific topic and that’s a monetizable topic—you’re talking about a topic where there is products or services surrounding it—probably, $1 per 1000 is probably on the low side. I do have some pages on my site for certain traffic segments get in the $15 to $20 per 1000. I wish it was that way for all 6 million visits but the reality is that’s not the case.
Charles: Yeah. A lot of times a remnant is, remnant was the term you used right?
Chris: Yes.
Charles: Basically, when you can’t go out or you can’t sell it or no other displayed network, it’s all ad that’s bought them a page, it goes to remnant. At least you’re making those ¢5 but everyone’s shooting for that $15 CPM, $20 CPM of those users that there’s intent, and they’re going to click, they’re going to buy, and everyone wants that right there.
Chris: Obviously, what I’ve done periodically and what I’m currently doing is, there is a minimum threshold that if I can’t hit a CPM rate, I’d rather show no ad. I’d rather have the person have a better experience on the site with no ads than, “Oh gee, I made an extra dollar today.” I’d rather have a few thousand visitors or 10,000 visitors see one less ad or no ads and then be happy about that than me make a couple of cents. I think it’s wise to consider user experience versus revenue on everything that you do. People like pop-ups and slide-overs and all these kind of exotic ads can pay $20, $30, $40, $50 per 1000 impressions, but my personal experience is, if I go to a site and there’s a slide over, I don’t go back to that site unless I have to. There’s always an exchange.
Charles: As some of those have come and gone, Google’s then penalized people, so kind of staying out of that bad side of the playground. It probably kept you insulated from some of these hits Google has made over the years and allow you to stay in where some other people who are just going for the cash grab, have kind of got knocked down by Google.
Chris: I definitely, over the course of the business, made decisions to, “I’m going to make less money.” Because I’m trying to think, “What’s the long game here? If I want the site to stay popular, I want to stay high in the rankings, I need to provide as good of a better service than my competitors and have a less intrusive ad experience than them.”
Charles: Have you found anything with ad blockers and all that? I know that’s a hot topic right now. Everyone’s saying it’s killing their ads. Have you found anything where that’s affecting you? Or do you track that are not noticed?
Chris: I’ve run some products that are supposed to be able to track that because it’s kind of hard to track something that doesn’t happen consistently and accurately. At the time that I ran it, I think it was maybe 15 % to 20% of the traffic was blocking ads. I don’t necessarily equate that to a 15% or 20% drop in revenue though because I’m sure that a lot of those people who choose to block ads are people that would never click on the ads, to begin with.
Charles: That’s one thing I’ve heard. I’m going to run ad blockers once in a while but kind of the nerds, like myself, might not be the ones clicking on some of the ads in the first place, anyway. We might be the ones that to come to this site and just bounce that weren’t really helping in the first place.
Chris: I’ve got a pretty techy audience, to begin with. There’s a lot of reasons that the ads actually on my site perform probably, considerably worse than most people would experience. A lot of reasons for that but I agree, I don’t think ad blockers are as bad of a thing as people are making them out to be. The more intrusive your ads are, the more it’s going to impact you. But that’s the reason why people are blocking your ads because they’re intrusive.
Charles: That’s the thing, people have gone to the sites where there are just ads loading. It literally slows down the page to a point of, there was a weather setter [inaudible 00:41:14], is it? It was loading in like eight, nine seconds–the page. It just got to a point of, “This is just difficult going to the page,” so the ad blocker’s for that, it’s more of just improving your own experience and not about not seeing the ads. You need the page to load and having some random display network stop the entire rendering, it kills the whole experience.
Chris: That’s where website owners have to make a conscious decision of, “Am I chasing money or am I actually trying to provide a service that I’m trying to monetize?” What I see is, CPM rates on ads, in general, have been trending down for probably the last 10 years. At least that’s what I see from a lot of people talking about AdSense and some of the larger networks. Their general solution is, “Let me just add another ad to the page.” Which then drive down the rates, even more. “Let me add another page,” and soon you’ve got a paragraph of content with 16 ads surrounding it. How does that benefit anybody?
Charles: What was the website where they sold pixels for $1 or something like that?
Chris: The Million Pixel website.
Charles: The Million Dollar Homepage, there it was.
Chris: Yup, the Million Dollar Homepage, they’re paid links.
Charles: It was actually just a webpage that all was ads, that was the best example. They went the other way and said, “We’ll just make the whole website ads, forget it.” They did well.
Chris: That was probably before the days where buying links was a penalized thing. They were basically buying links to their sites.
Charles: Yup, and there was one point where they sold $1 million and said, “I’m done, that’s it.”
Chris: It’s a very interesting model. If you can get attention to it, you can make $1 million.
Charles: Yes. Quickly too, it was in the days.
Chris: Wow.
Charles: Okay, 2018, you’ve been working on this full-time for four years, where do you see this going from here? Where do you see things in the next four, five, or 10 years from now?
Chris: Honestly, in the last year, things are starting to level off, at least in my business. I’m looking for ways to branch out into other topics, other websites, other content which I can monetize through similar means. That’s part of my thought process like, “Okay, here’s a topic I’m interested in or I know people that are interested in and then we can provide valuable content.” Are there affiliate programs associated with this type of industry? If there are, it’s going to be a little bit harder but trying to think of things where, “Okay, there’s an opportunity here. I see this industry becoming popular in the next couple of years. It looks like there’s probably going to be some affiliate programs there, so let’s start building out the site now, produce great quality content, keep the number of ads low, build an audience, and then work to build an affiliate program as they become available in that industry.”
Charles: You’re going to see the same model of building a site, building traffic, building an audience, and then monetizing through affiliates. That’s still going to work in the next five to 10 years?
Chris: I hope so if not, I’m in trouble.
Charles: Well, there are no indicators of that slowing down now.
Chris: People are still buying things. There’s still value to merchants to have someone promoting their products or talking about their products. As long as products are going to be sold, having someone pitch your product is always going to be of value to a merchant.
Charles: Yup, so the goal is to just get them in front of more people and show them the products they may want, at that time, and merchants provide a little cash. There’s no work involved, there are no returns, putting Bibles in boxes, it’s just generating more content, generating more page views.
Chris: Yeah, it’s a very different industry than e-commerce in a sense. E-commerce, you’re trying to figure out, “How do I eke a little bit more margin out? How do I sell more? If I switch from FedEx to UPS, I might be able to save 10% on my shipping or 5% on my shipping costs.” I guess if you’re doing free shipping, you’re losing less of your margin to your shipping costs. “Do I outsource my warehouse to some state where it’s cheaper to run my warehouse?” The e-commerce with the product, there’s a lot of infrastructure costs that you have to think about that are very different than affiliate relationships.
Charles: Yeah, that’s a good way of looking at it where you’re focusing on a slice of the business. Where that piece of e-commerce side, still, there is all that—the business side—but they also need to drive traffic, and without that, it’s not going to work. You’re focused very much on that piece so you drive traffic, monetize it through affiliates so the whole warehousing, return, that’s kind of moved out of your course, and you get to focus on that traffic piece, and how you can do that to the best of your ability.
Chris: Yup. I probably, ultimately, would make less margin because of that, but I’m reducing the risk. The e-commerce company, they look at it as part of their marketing budget in the sense of, “Hey, we’re willing to spend 10% of our gross revenue to go towards marketing. If this guy will give us traffic, we’ll pay him the 10% or the 5% or the 2%,” or whatever it is.
Charles: Yup, I like it. Alright, Chris, that was very helpful. I think the story of moving from products into an affiliate—a very interesting one. You don’t hear that very often, but it’s pretty neat. Thank you for that.
Chris: You’re very welcome. It’s been a fun transition. I’m looking to see what the next 5 or 10 years hold.
Charles: How can people get in touch with you?
Chris: Absolutely. People can visit whatismyipaddress.com. If you’ve got privacy safety questions, you can email me directly at chris@whatismyipaddress.com. I’d love to have a conversation and see what I can do to help you out.
Charles: Awesome. It was great talking to you, Chris.
Chris: Great talking to you as well. Have a great rest of your day.
Charles: Thank you, you too.