Do You Know The Most Important Metric Online?
I want to ask you a question: What would you say is the most important metric for a website? Please take a couple of seconds to think about your answer, and say it aloud before you read on.
We can’t know the numbers for sure, but I would guess that the majority of people answered the above question by saying “traffic.” In other words, traffic would be the most important metric for a website.
But is it?
In my opinion, it’s not.
There’s one metric that is much more important than traffic. In fact, it’s pretty much the only metric you should care about. It’s called earnings (more specifically earnings remaining after costs, or profits).
Just think about it: would you rather own a website that receives 500,000 monthly visits and that makes $2,000 monthly, or a website that receives 20,000 monthly visits and that makes $10,000 monthly?
At this point you might wonder how on earth a website that receives 500,000 monthly visits can earn 5 times less than a website only getting 20,000 monthly visits. It’s easy to explain: maybe the first website is an online forum about games, and despite having a lot of traffic it finds hard to monetize that traffic. The only viable source are ads, and the both the CTR (click-through rate) and the CPC (cost-per-click) are pretty low, so the monthly earnings are just $2,000.
The other website, on the other hand, is an online store that sells Japanese animes. Pretty much all its visitors are coming from search engines ready to buy, generating around 1,000 orders per month with an average profit margin of $10 per order, generating around $10,000 per month in profits.
Now I am not saying we should all start building online stores to sell Japanese animes. I am not even saying that websites that sell products are the most profitable ones. I am just saying that many website owners focus excessively on the traffic aspect, when they should really be focusing on profits.
This means that whenever you think about the strategies behind your websites you should start by figuring out how you are going to make money, how much you’ll be able to earn per visitor and so on. Once you figure that out you can start working to increase your traffic.
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18 Responses to “Do You Know The Most Important Metric Online?”
I appreciate this article since it points out the pitfall of focusing on traffic alone. At this point, I’m working on building both, and using the analytics to see which articles my audience is most responsive to. Thanks for the advice!
Ranjith (SR) | A light hearted talk
Only one group of bloggers have been discussed here: the ones who are into blogging for money. Another group, who blog for personal satisfaction have to consider traffic, and average time on site as the most important metrics.
The thing which important then Traffic and Earning is value of product or information you gives to your user.If it is high then you easily get traffic and Got buyers or clicks if it is Blog.
I would have to disagree in the sense that how can you generate earnings if there is no traffic. Yes you may have a great product, the best, but what good is it if there are no people who knows about it. I think traffic should be the number one priority then earnings comes second. It will follow once you can build a huge audience for your site.
Huge traffic is proportionate to huge earnings!
Definitely online stores are earning huge profits but this would require very smart business strategy in order to cope the competition of the market.
I admit I thought of traffic after reading your question but I totally agree with your theory if you are doing it for the money.
I have websites that are earning me 20 â‚¬ CPM while others are making just 1-2 â‚¬ CPM so I totally get your point.
I was actually expecting you to say something else. In the back of my mind I knew it was earnings, but thought I might be seen as too “capitalistic”. But I’m so glad you reinforced my belief.
You’ll probably get slack for this, but you’re right on track.
I generally go along with the “You need massive Traffic” crowd.
Though, something that would be worth working towards is a more “Targeted Traffic” or a targeted audience, approach.
Of course, having something to sell or a service to offer, would help to make the most out of “that most important metric”.
If you use your blog to earn money , of course the revenue or income would be more important metric. Traffic can equal to nothing because you can get million of traffic per month but with less sales due to non quality traffic. Traffic can get it everywhere, can even buy the traffic and exchange the traffic but yet not all the traffic will bought something from you or will click on your google adsense.
Yes, it’s true. I know some sites receiving tons of traffic and not making huge profits, while other with some decent traffic are making a killing.
As said, sites that sells products tend to earn much more.
“Say it aloud before you read on.” Involvement! Ok, reading on… not so good. 😀
Very great point, and one that I have been paying attention to lately. I have seen too many MMO blogs that have decent traffic but hardly make much at all.
As monitization strategies change, so will blogging.
Very interesting topic Daniel,
You are right there. People focus on traffic , traffic and traffic.
However, with right niche and a winning product one can be build a profitable business even with moderate amount of traffic.
It all depends on the uniqueness of the idea.
@Megan, my post was focused on people who want to make money with their blogs/websites, cause that is the majority of my readers.
If you are doing it just for fun then the stuff I said don’t apply.
If I focused on traffic alone I would have given up already. Having said that I do tend to check far too often to see if my “score” is creeping up.
However, it is worth remembering that some poeple have websites or blogs because of the enjoyment and pleasure they get from writing and providing a service. For some people it is not all about how much money they are making.
I worry that people get so carried away thinking about how to get the most money from their website, that they forget to give their readers something worthwhile.
I concentrate on good writing and value. Hopefully the money will take care of itself.
When I started out, I definitely bought into “it’s all about traffic.” Granted, more traffic is always better but it’s about the quality of that traffic and what you have to offer to them. I’d rather have 1000 targeted visitors that want to purchase services than 10,000 who just breeze right through. It’s more important to carve out an audience that truly cares about what you’re saying.
Also, another topic that many don’t cover is what I call “Monetary Guilt.” It’s the feeling of balancing what you’re giving out, to what you feel you deserve. I know a lot of people who refuse to put out products, advertisements, etc because they feel ashamed to sell, that it’s not right or what they offer isn’t worth it. But that’s a whole other story…
Rob @ BROcrastinator
I definitely believe it’s a huge metric, but there are a lot of things that go into it. Like you mentioned, the niche, your visitors and more all affect the amount of money you make.
Hi Daniel! You’re suggesting “earnings” but I would suggest “conversion rate” as a better (in my opinion) metric to have a clue of the potential of a website. This because a good conversion rate should suggest a better interaction with visitors, even if you actually sell a product that earns you only few bucks.
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