Setting goals is a crucial part of building a business plan for a website. This gives a clear goal to shoot for, and the dream of a site with 1 million monthly users is one many website builders or investors have.
The answer is: it depends. It depends on the niche, monetization optimization, and sources of traffic.
That is especially true of the ceiling for what a website with one million views could earn. By looking at the likely revenue per 1,000 visitors (or RPM) for the niche it is possible to get an idea of what a website with one million users can get in ads.
With the revenue information, we can then estimate the website’s worth.
Let’s get to it!
How Much Is A Website Worth With 1 Million Users?
For example, a website with 1 million users obtaining an RPM of $15 would generate $15,000 per month in revenues. A website is typically valued at 35 times its average per month revenue. Thus, the website is worth $525,000.
How Calculate Your Website’s Worth: 4-Step Process
Here is an outline of the 4-step process and formulas involved. For a deep dive into valuations, read the website valuation framework.
1. Determine Your Niche
This is what makes determining the niche most important. Some people look for the highest RPMs and build niches in those spaces. While this can work, those niches often have the strongest competition for just that reason.
Take a realistic look to see if it’s a niche that you have expertise in or in-depth knowledge that would allow you to compete in the niche. If not, it will be a better idea to look at other niches, especially ones you are interested in or have experience with.
This is especially true for beginners or relative newcomers to website building. That first-hand knowledge or interest makes it easier to write good in-depth content while building up the blog.
The niche of your site will be crucial to estimating how much a million monthly users will be worth.
2. Estimate Your RPM In Your Niche
RPM is revenue per 1,000 pageviews, sessions, or users. This is the common way to measure how good or bad the return on display ads is for a site.
RPM provides a common comparable metric that can be used to compare the average earnings of niches against one another.
The more valuable a customer is to a business type, the more big companies are willing to pay for advertising. This is what makes ads in some niches more expensive.
A person looking to invest hundreds of thousands of dollars (finance) is worth more as a customer than a person looking to spend a few hundred dollars to buy a tent (outdoors).
RPM numbers will vary by niche and can be affected by display ad providers. This is why niches like finance, attorneys, and B2B pay higher than retail niches.
This range allows a website builder to make a high RPM, low RPM, or average RPM estimates on what a million visitors a month would bring in.
3. Calculate Monthly Average Revenue (L6M)
The next step is to calculate the monthly average revenue.
Take the total monthly pageviews the website has received in the past 6 months. Nothing fancy here – just add together all the pageviews from 6 months and divide by 6. This is equal to the Monthly Traffic.
The formula then is:
The monthly traffic is divided by 1,000 because RPM measures income per thousand. This creates an easy multiplication to see how much a site with a million users should make from ads monthly.
This is also the number used for average monthly revenue for the last six months (L6M).
4. Calculate How Much Your Website Is Worth
Now that you have the L6M average, it’s all about choosing a likely multiplier and then putting the numbers into the equation.
The average range right now for a multiplier is 30x-40x website value. Factors that can affect which side of this range a site sells for include the number of high-quality (and hard to get) backlinks a website has, domain age, and how much potential to increase growth a buyer sees.
Going by 30 is always a safe bet, though a website owner could choose to do this for every potential valuation of 30x up through 40x if he/she wished.
Use these calculations and you can get an educated estimate on what a site in a niche would be worth at 1 million views a month, or if you have a site pulling that kind of traffic you can just plug the numbers in to figure out an actual value.
This is a pretty simple practice to determine value. Just have the two formulas on hand and practice them on some real-life or hypothetical website examples
- Look at the niche of your site or a hypothetical site you’re looking to start
- Find the average RPM range for that niche
- Calculate the average monthly revenue from the last 6 months
- Run the numbers through the valuation formula to see what one million visitors will bring
If you’re not happy with the valuation there are options. Adding affiliate offers, optimizing for display ads, and increasing traffic are all ways to increase the monthly revenue, which brings up the L6M and thus the overall valuation for sale.
Knowing these formulas gives you the ability to shift with factors like traffic numbers, RPM, multiplier, and see how even small changes can result in major differences in the value of a website getting one million or more users a month.