The Money Trail: Expenses for Project Go White Hat, Pt 6

This post is all about the money trail…The REAL costs of converting a site to White Hat.

Be sure to check out the previous 5 posts if you haven’t read them yet.

I haven’t mentioned expenses very much in this case study.

Today, I reveal it ALL.

I mentioned that the monthly expenses were about $500 per month, which covered hosting, Private Blog Network links, and other normal overhead. Most of the $500 was for the PBN links.

The costs of converting the site to White Hat haven’t been mentioned in detail so that’s what this post is all about.

I wrote a guest post about the case study on Charles Floate’s blog. Matt Allen, from Dumb Passive Income, asked about the expenses, calling out the fact that it’s not clear if there is a positive ROI.

It is a fair claim in a world where Internet Marketers like myself don’t provide transparency into the financial realities. This is really irritating when I see the FBA (Fulfilled By Amazon) marketers talk about making seven figures a month and neglect to tell you that the profits are four figures a month.

I’ll talk about the costs, then the revenue.

The Costs

There are several expense categories in the project, and Rob and I did a pretty good job about what they might be. So there were few surprises.

Logistically, I paid for just about all the expenses upfront, then Rob would pay for his half of the costs at the end of the month. It was a bit tedious but helpful to see the numbers as an unofficial audit of the expenses.

Let’s look at the major sources of cost in the project so far.

Content

We added a lot of content to the site, about 110,000 words. Most of the content was in the form of Keyword Golden Ratio compliant content. (Watch a webinar on YouTube on the topic)

Several other posts were systematically improved which yielded an increase in rankings and revenue.

I hired writers from Upwork and paid about $14 for each 800 to 1,000 word post, or about 1.55 cents per word.

New Keyword Golden Ratio Content

We added 99 new posts to the site, all KGR compliant. All that content amounted to about 94,500, at about 1.55 cents per word.

It’s staggering to think about that amount of content! Even now that it’s done.

We were able to utilize the team I already had in place for my other niche site. So it was actually easy to do.

In the chart below, Value is the number of visitors and Value Percent is the percentage of total traffic, and that’s for a 90 day stretch.

Improving Existing Content

A lot of the content on the site was bad. It wasn’t helpful and/or wasn’t written by someone that knew anything about the topic.

Nine of the original 45 posts, received about 80% of the traffic. So I applied the 80/20 rule and just worried about improving the content on those posts.

If we set out to do that for all 45 posts, it would have been overwhelming and the benefit of working on the other 36 posts would be minimal.

Here’s how we figured out which nine posts to work on… Remember in the chart below, Value is the number of visitors and Value Percent is the percentage of total traffic, and that’s for a 90 day stretch.

Editing and Content Management

The volume of content we were processing was, eh, A LOT. I don’t want to be in the business of reading a pile of content as high as a seven story building so I hired editors/content managers to help. This role was paid $9 per hour.

And for my team, the editor is the content manager – see below:

If you’re interested in the details of building such a team, and you should be, check out my post on Empire Flippers discussing How Entrepreneurs Build Teams.

The Editor/Content Manager Role does the following:

  • Edits for grammar, content, and voice
  • Adds images and videos
  • Adds affiliate links
  • Adds internal and external links

That would take me over one hour but my team can do it faster and better than me.

Plus, that would have been about 100 hours of my time! That’s two and a half weeks working full-time on content editing.

Content for Guest Posts

The content for guest posts was written by the same writers writing the content for the niche site content. So I paid the same rate as noted above, $14 per 800 to 1,000 words, or 1.55 cents per word.

Guest Posts

The guest posting campaign had two main components:

  1. A fixed bid* piece heading up by an outreach manager.
  2. A part that I ran with two VAs (paid hourly) and writers.

Each part component completed about half the work.

*Fixed bid means I pay a price for a result, a published guest post in this case, and the number of hours or resources needed to complete that work doesn’t matter. One guest post may take one hour to get, while another takes 20 hours, and I pay the same for each. It’s how nearly all SEO work of this kind is charged for.

Outreach Manager

I started the work for replacing the PBN links with guest post with this approach.

I was hoping (oh was I hoping!) that all 45 guest posts could be done by the outreach manager.

I paid $1330 per 10 guest posts for this fixed bid portion of the campaign.

This part of the team was great to work with in that I had one contact point: the Outreach Manager. He hired Prospectors and Researchers to help out. If he needed content, he got the content from iWriter. It was a blackbox for me.

As you know, that didn’t workout well and this part of the work stalled at 22 guest posts. It was hard to deal with since the campaign started so strong. Then, it just dragged on for a while and I kept hearing excuses about what the issues were.

From a management standpoint, I did suggest new modes of operation, new techniques that I knew to be effective, and even to hire more help if he thought it would help. None of my suggestions were taken.

In January, I got off my ass and sprang into action building a small team.

Outreach Assistants

At this point, we were way behind schedule with no signs of recovering without drastic action.

So, I hired two VAs to help me with a guest posting campaign. I paid them $9 per hour and used the same guest posting techniques that I’ve talked about several times.

I added a higher degree of interaction with the target blogs:

  • More blog commenting
  • More email interaction

And this extra care, the extra interaction made all the difference.

I was thrilled to see the progress and excellent results. My general VAs actually beat the experienced Outreach Manager hands down.

The sad part of it was that I told the Outreach Manager that more interaction with bloggers would improve the conversion rate back in October. He didn’t follow my advice so he didn’t improve the results.

The Revenue

Now, let’s look at the revenue over 2016 to 2017. Remember that I joined as a partner in September of 2016.

Then, the revenue in 2017.

So, the expenses are not only covered by the revenue, I’m confident that the changes we made increased the revenue a LOT.

*I don’t have the March revenue handy, but it’s about 35% lower than we would expect due to the Amazon Commission rate changes

Positive ROI

I acknowledge that I’m ignoring the time that Rob and I spent on the project. But I can say that both of us are busy on other projects and doing fun, non work stuff, and I know I only put in about 2-4 hours per week since starting on the project.

Coming Soon in Part 7: Amazon Commission Rate Change

We know that it’s a different landscape with Amazon after March 1, 2017 when it changed the commission structure. In part 7, I’ll tell you about:

  • How We Found Out About the Change
  • Panicking
  • The Impact
  • What’s Next?
Check out my YouTube Channel for tutorials and demos.
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31 comments… add one
  • Hey Doug,

    It’s interesting to see that you paid $1330 for the first 10 guest posts and then it seems that you paid $1186 for the next 35 posts? Or am I reading the expenses report incorrectly?

    Either way, that’s a hell of a ROI especially considering that the sales multiple increases because it’s a completely white hat site now and that your income increased. Hats off to you.

    Also, I owe a big thank you to you for finally getting me to believe in doing things using systems.

    I used to sort of just “do things” without having systems in place, but now I have a small content generating system in place me + 1 va + Upwork writer, and it’s simplified my life in the last month more than I could’ve ever imagined!

    Now I just have to automate this whole process and I’ll retire on a beach sipping Pina Coladas, right? 😉

    • Hey Ilya, thanks for the comment.

      You are reading it wrong (though the notation isn’t clear)…It was $3,330 for the first half, and about $1,200 for the second half…roughly. That spreadsheet is literally what Rob and I use so it’s sloppy.

      You owe me a pina colada!

  • very inspirational.

    I’m trying to raise some cash to do authority sites so still doing client seo for now, i figured that would be the fastest way to begin.

    regards

    • Hey Paulo, thanks. Glad you like the case study. Good luck on your services and upcoming site.

  • mohammed

    Hi Doug, thanks for sharing all these valuable info. Just to make sure I understood your point about fixed bid for the outreach manager to get a guest post published, could you please clarify how much you pay in total the outreach manager, is it 1300/10 = 130$ ? Do you apply this to all guest posts regardless the authority of the website ? Thanks!

    • Hey Mohammed, thanks for reading.
      Yeah the guest posts were $130 each, aiming for DA over 20 on average.

      If a sites DA was a tad lower but relevant, we accepted it anyway. And many were over DA 20…

      Does that help?

  • Another awesome post Doug. This is probably my favorite blog to follow these days as your strengths line up with my weaknesses, implementing good systems and managing a team. I think since I still make very little money on my affiliate site I am hesitant to dish out much on outreach and editors (which I do).

    Seems like all the expenses were well worth the reward as you site is swimming in cash.

    One question for you. What accounting software due you use to track all your financials and how do you like it?

    • Hey Nate, thanks man! That’s kind of you to say!

      Right, I’m with you on growing slowly and covering your costs early on. We’re not swimming in cash, Scrooge McDuck style, but we do okay!

      I use Wave and do my own bookkeeping. It’s free and it works fine…it has some quirks and usability issues but no real deal breakers.

  • Art Manville

    Maybe I am missing something but I just got some links from fatjoe and they turned out very good and look cheaper than your guest post costs and are instantly scalable without having to build any sort of team.

    Also, our authority site has seen a significant drop in traffic in the last 30 days. It is like Amazon and Google are in cahoots to reduce our income stream! Anyone else seeing traffic drop?

    I can just about pinpoint the day it happened around a month ago and still seems to be declining.

    • Hey Art, I’ve heard really mixed results from FatJoe, and a year ago I heard about poor results.

      So if it worked for you, GO FOR IT.

      But I’ll tell you that if it’s instantly scalable and cheap, then it will get overused and eventually the value proposition will go away. You know how us marketers are about abusing scalable processes.

      I haven’t noticed a drop in traffic. Is it across the board an your sites?

      • Art Manville

        I really won’t know if fatojoes worked until we get a boost in rank. But the articles were good and the sites were decent. I can show them to you if you want to check them out.

        Both sites are down but the main site is down at least 20% for some reason. We have done no link building after getting penalized a year ago until the links from Fatjoe.

    • Shawna

      FatJoe links used to be really good, Art. But in recent months they’ve started using more and more PBNs – even in the DA30+ links.

      I recently bought 35 links within 2 months to confirm my suspicions about their overall inventory (I’ve bought more than that total in the past year). I wrote about it at – http://www.skipblast.com/fatjoe-review/ – but the tl;dr is that at least 20% of the links I got across levels DA10 – DA30+ were obvious PBNs.

      In my recent experience, their links will give your site a boost in the SERPs, but these are not “safe” links by any means.

      And I think Doug will agree with me when I say that the more difficult the link is to acquire, the safer and better it is for your site’s backlink profile.

      Good luck with your site!

      • Art Manville

        Thanks for the reply. So you found that some of the links were from PBN’s but you reccomend and sell your own PBN’s.

        I did not buy any of the cheap ones just the 20’s and 30’s. Some of them had really good Alexa ranks and others didn’t. Although Alexa is not always accurate.

  • Hi Doug, an impressive post. I have recently subscribed to your list after viewing one of your Youtube videos. I like that you don’t hide any “secrets” from your readers. I am carefully reading all your posts and I think that you have provided a great strategy and simple steps that anyone could follow to become successful.
    I like the idea of investing in old and new content. I see you have invested a good money on your content and guest blogging and great part is that you have got all the investment back too. Keep doing the good work and keep sharing it with your readers.

    Thank You.

    • Imran, thanks for checking out the site! Really appreciate it.

      I do my best to share what I do. 🙂

      See you around the blog.

  • Who is this Matt Allen guy and why does he always ask such obnoxious questions?! 😉

    Thanks for the clarification. And you’re welcome for the blog post idea…

    While I don’t doubt that the guest posting links work – I’m still skeptical about the overall plan (despite your explanations). $10k revenue in Feb is awfully similar to the July thru September revenue numbers just before you started this project.

    If it were me (again, who am I to talk?)… I would have added the white-hat links and left all of the old PBN links. Maybe keep adding more and more white-hat links to dilute the PBN links over time. But that’s just me.

    • Hey Matt. 🙂 So, in theory, I’m with you and all the stuff you’re mentioning makes logical sense.

      The one thing that drew us to the point of replacing all the links is the potential value added, which I know you don’t agree with necessarily. Experts (Empire Flippers & FE International) tend to say a non PBN site will indeed have a higher valuation, all else being equal.

      Your opinion is always welcome!

      Now, the thing we didn’t plan for was the Amazon commission changes & waning interest in the niche. Uh, oh! You’ll be interested in the next two posts very much!

  • As always, Doug, great detail in your post! Gotta tell ‘ya, though, I’m with Matt on this one. Do you really believe that the removal of the prior PBN links will actually increase the value as much as you said in your earlier posts? I’m skeptical. 🙂

    If I were a buyer, I’d look at the revenue and profit history to determine what I’d be willing to offer. If the ratio of white-hat to gray-hat links was high enough, I’d consider the risk of the old gray-hat PBNs to be negligible. In other words, if I determined the value of the site with the PBNs still there was, let’s say, $300k, you could not convince me to pay a premium for removal of the PBN links. However, that’s just me (as Matt says).

    Not only am I skeptical about the increase in value, I think there’s risk in removing the gray-hat links. I’d be afraid that removing links, even if they are PBNs, could cause Google to think something’s going on and lower my ranking. You know how persnickety Google can be sometimes!

    I’m really curious to see how this all turns out. Either way, you’re making very good money as it is.

    • Hey Bill, thanks for checking it out.

      As far as the value of removing the PBN links, who knows! We expected to get a monthly multiple in the low to mid 30s with a White Hat backlink profile. We will never know what could have happened.

      You and Matt have a good point.

      The risk is REAL but not for the reason you said… It’s just removing the links and having less links overall. (Okay, Google can be persnickety for sure so maybe just changing links is a risk.) And the rankings did decrease for some terms, mostly long tails, on certain pages.

      Thanks for the good comments, Bill!

  • Quinton Hamp

    This is turning out to be a downright exciting case study. I love that you were able to bring the traffic back to normal levels with your white hat posts.

    Do you feel that the 90k words of new content had much of an impact, or do you think that you would likely be in a similar spot?

    I definitely think you can get the 30x+ ROI. That is a solid 4-5x higher than you would likely get with the grey hat links in place. I think your investment in new links is going to more than pay for itself.

    • Hey Quinton, thanks for reading! The 90k words helped but I’m not sure how much with real revenue stats. I will check on the traffic. It’s something, though Rob just told me about those new articles ranking and all.

      Good question!

      • Quinton Hamp

        It could also be that they take off and steamroll into something even bigger.

  • Hi Doug, I am following your website for couple of days and already completed reading some article. I know, link building is a hard part for new affiliate marketer and so, I am searching for some solid idea and your article solves some of my problem. Thanks for sharing the great insights.

  • I’d be interested in the response of how you think the 110k words of content affected the overall conversion rate. Ranking is the key, obviously, but the content is the closer?

    • Hey Michael, thanks for reading and good question about the new content.

      I’m not sure how much with real revenue stats. I will check on the traffic and that’ll give a pretty good idea about how much it helped.

      It’s something, though Rob just told me about those new articles ranking and actually bringing in new traffic.

  • Jason

    Hi Doug,
    I recently found your blog after hearing about you on EF. I’m seriously considering an editor myself, I have spent a fair amount on Elance and then upwork but I always managed the contractors myself. What I noticed was that I would get the right content but I always need to find an image/images and sometimes that can take longer than writing the post. In your costs above you don’t talk about image curation, how did you get images for your articles? If your editor is in charge of finding the writers do they find the images as well?
    Thanks!

    • Jason, cool! Glad you saw the EF post.

      The images came from Flickr Creative Commons or Unsplash – so it was all free. The editor gets the images and has a process to do it.

      It’s all about the process and the system. If you wanted you could have them use a stock photo site, whatever you want.

  • Vironica Jerry

    Hi, Doug, I am reading your blog for couple of days, but I am little bit confused about making backlinks to a category individually rather than domain.

    • Hi, thanks for checking it out.
      I’m not sure I understand – can you rephrase the question?

  • I am currently recovering my amazon niche site from being hacked but ive been looking at some white hat and guest posting that works so its very interesting your case studies show that certain results can work and some dont. I think overall getting highly targeted traffic is the key and should be done with the best quality blogs you can find in your niche as niche related blogs are what google are wanting to see.

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