Value Lost When Website Is Sold

Channel targeting advertisers lost?

[MsHuggys]

This is a hypothetical scenario.

Let's say my website earns $9000 a month. Because it is a site with longevity, been with Adsense for six years, half of the income we receive could be from advertisers who target channels we have set up.

Much like Yahoo, we have many different categories on our site, and have set up different targetable channels such as Travel, Jobs, Personals... While likely all the advertisers who target our channels are also in the mix for targeted keywords, as much as half could be targeting specific channels.

I die,or sell the site. The new owner has to apply for Adsense and put their code on my site. Do the channel targeted advertisers automatically get lost until such a time they rediscover the newly available targetable channel?

If half of my $9000 in revenue comes from channel targeted advertisers, does that mean $4500 of the value will instantly be lost when I transfer that site?

[farmboy]

If half of my $9000 in revenue comes from channel targeted advertisers, does that mean $4500 of the value will instantly be lost when I transfer that site?

To me, the value of your site and your monthly revenue are two different things. The monthly revenue may be one of the factors in determining your site's value, but value and revenue are two different things.


FarmBoy

[MsHuggys]

What I meant was half of the 'adsense value' itself, not all value. I also have in-house ads, and they will naturally automatically remain with new owner.

[jetteroheller]

If half of my $9000 in revenue comes from channel targeted advertisers

Channel targeted revenues are far less than 1% at me.
Makes always problems, have every 2 weeks to check and to lock out certain bad ads.

[ken_b]

If half of my $9000 in revenue comes from channel targeted advertisers, does that mean $4500 of the value will instantly be lost when I transfer that site?

If all your ad code is replaced by code from the buyer's account all your "targeted ads" will be lost.
.

[MsHuggys]

Ken, this is what I thought.

Really, it doesn't make good sense that channel targeted revenue is lost. Those channel targeted advertisers are more or less the publisher's clients as well as Google's. They become a secondary part of the site's assets.

What this would mean, if what you and I both assume is correct, is that publishers should not allow channel targeting. It is inevitable that each of us will eventually transfer our sites, through death or sell. As years go by, and we can no longer work our sites, or choose not to, much of what we have worked for is lost.

Let's say my site has an 18-month worth of $180,000, just based on the Adsense. That would be the basis of my asking price, if I had no other income I could prove to a potential buyer. He checks on the web, finds this thread, doesn't know it is me, or has anything to do with my site. What he does now know is that my site is not worth what my Adsense earnings over 18-months says.

While he doesn't know the percentage of loss due to channel targeting, he does know there is some loss. The potential value of my site, and all sites with Adsense on them has just plummeted. Now, the buyer will use this information to batter me on my selling price. Instead of offering me closer to the $180,000 asking price he wants to offer me $90,000. With that kind of potential loss down the road, it doesn't make long term sense to use channel targeting.

We all work our sites for monthly income. But, it seems to me we all also work our sites for the long term investment. We are after all, running a business. The plan for any business owner is to increase the value of the business. I can think of no other business model where 'clients' direct or indirect are lost simply because a business changes hands. Those clients, direct or indirect are part of the value of a business.

There should be a way for Google to do a redirect on channel ads, that automatically notifies channel targeters that a channel is no longer available, AND where applicable, refers them to new 'similar' channels on the SAME site that are now in place.

Yes?

[MsHuggys]

Jetteroheller, how can you know what percentage of the ads in your ad review center are cpm or cpc and what percentage either or both are of your total Adsense revenue? Further, how do you know which of those ads are displaying as a result of keyword targeting and which are displaying as a result of channel targeting?

[farmboy]

I would think a buyer and seller could work together to create a seamless transition so that one day there is a site owned by person 1 and the next day the same site exists and is owned by person 2. The only difference would be the AdSense code on the site would now belong to person 2 instead of person 1.

Would advertisers even know a change had been made? I think an AdWords user might be able to offer some insight.


FarmBoy

[farmboy]

...is that publishers should not allow channel targeting. It is inevitable that each of us will eventually transfer our sites, through death or sell.

Based on your hypothetical and assumptions, what you seem to be saying is I, as a publisher, should just accept $4500 in monthly income now instead of $9000 in monthly income now, because I'm going to die someday.

I don't follow.


FarmBoy

[MsHuggys]

Farmboy, that is a great theory. There is no logical reason that should not be the case. But, in looking at my Ad Review Center, I see almost 300 text ads alone, most of which I think I can assume are cpc ads, and they date back almost two years (April 2008), covering dozens of industry primary players. How many of those nearly 300 text ads in my Ad Review Center are keyword targeted, contextually served and how many are channel targeted?

In looking at 'who' those ads text represent, I see ads almost two years old that belong to advertisers who have been shown on my site consistently during those two years, right up to today AND they almost always take the top spots. This may mean they hold a great deal of the revenue for my site in their hands and a good deal of that revenue is channel targeted.

I currently see no way to 'seamlessly' transfer those advertisers targeting channels to a new owner, with new code and new channels, unless I am missing something.

The question then has to be asked, how long will it take for those long time channel targeted advertisers to realize my channels are all gone, and find the new owner's channels? How long will the new owner's income suffer from this dedicated channel advertiser revenue loss? The answer to this question directly affects the real value of the site.

[MsHuggys]

Farmboy, you are applying the scenario to death only. I am 56 years old. What if I suddenly can not work the site any more and want to sell? What if I need to sell the site in order to survive a financial crisis and I needed a high value determination of the site, in order to pay off debts to say... the IRS? There are any number of scenarios that could push any of us to sell tomorrow, next week, next month. Do we want to lose $90k or more when we need it most?

This shouldn't be about a choice between $4500mo now and $90k later. Today it is about $4500, but as quickly as tomorrow, it could be about $90,000. It is a problem, and it needs to be fixed.

[ken_b]

Wait, I wonder if this boils down to ad code and channel names.

The more I think about this, I wonder if it's possible for a new owner to salvage the targeted ads with careful coordination between the buyer and seller like Farmboy suggested.

My first post on this was based on my own experience. I learned the hard way that apparently even changing the name of a channel can result in losing any ads targeted at that channel.

Thinking more about that experience made me wonder, if the buyer were to set up identically named and formatted ads and channels as the seller was using, would the targeted ads still run?

My understanding is that targeting is aimed at the domain, channel, page, etc and not at the publisher account, so maybe the targeted ads would still run if all else stays the same?

This would be a good thread for ASA to comment on.

I think I read something about changing channel names and the effect on targeting in the AdSense help pages somewhere. Maybe I can find that again.

[Added]I found the reference I was thinking of

Also, be aware that should youedit the name of the channel in the future, you'll lose any existing advertiser bids for that channel.

AdSense Help Page [google.com]

[buckworks]

Even if you lost the targeted ads for a particular channel, there would always be other advertisers competing for that exposure.

There might be some drop in your income but that $4500 would not just disappear, a good part of it would be recovered by ordinary Adsense bidding for your keywords and topics.

[MsHuggys]

Ken, exactly. I am aware if you change the channel name, you lose anyone who targeted that channel. It is what prompted this train of thought.

I have something like 70 channels I think for that one site. I could print up those channel names and have it on file for a new owner. It would be seamless if the channel data is:

/adsense/mysite.com/channelnumber

and not

adsense/mysite.com/publishernumber/channelnumber

or

adsense/publishernumber/mysite.com/channelnumber

I believe there is a publisher number associated with the channel number, making a seamless transfer impossible.

[MsHuggys]

Buckworks, looking at my top three advertisers, those who have text ads for two years, maybe channel targeted...

I would assume they have multiple ad units. Some that target a keyword, with a ppc-daily/monthly limit and others that target a channel with a ppc-daily/monthly limit. They have a limited on the total account spend for the day and month as well. But, if the channel disappears, that money no longer spent on my channels is lost to my site. It doesn't automatically go to the keyword daily/monthly limits.

These guys are my top bidders. If they don't bid, it only means the top bidder is getting that top slot for much cheaper than when when my industry icons were forcing up the bid. Of course, you have to consider smart pricing, another unknown factor. This is just assuming known factors we can calculate.

What it DOES mean is my competitors for those keywords will utlimately get more of the money that had been targeted at my channels, as the advertiser sees his budget was not tapped out, and he reallocates his money.

[MsHuggys]

This is code from one of my pages. It would appear any ad channel made by a new owner could not duplicate my channels and keep my channel targeters (actual numbers changed below):

<script type="text/javascript">
<!--google_ad_client = "pub-62000000000000";
/* My specific channel name */
google_ad_slot = "100000000";
google_ad_width = 728;
google_ad_height = 15;
//-->
</script>

[dibbern2]

excellent discussion, hope it keeps going.

Could you transfer your AdSense account to the new owner? I have no idea if this possible.

[ken_b]

Could you transfer your AdSense account to the new owner? I have no idea if this possible.

AdSense accounts can not be sold.

But I wonder, if the account is owned by a corporation and the corporation is sold, would that work, if it was a stock transfer sale and not just an asset sale?

I suspect we have a few publishers here who have gone through this. Maybe one will post their experience.

[MsHuggys]

You definately can not transfer the Adsense account, and maybe you wouldn't want to. Perhaps you are only selling one of numerous sites you own. You need to keep the Adsense account.

But, as you can see, the code on the page has three identifiers:

Publisher Number
Unique channel name
Unique channel number

The channel name, I think, is really for the publisher to easily identify their channel. I don't think it really has much other technical use. In the code, I am assuming it is the publisher number coupled with the channel number that advertisers are actually targeting. There is no way to transfer those two identifers. When the new owner creates the new code in their Adsense account, it will have a new channel number. No way to get around that.

One thing we do know is, you are not suppose to modify the code. So, you couldn't take the old code, remove my publisher number and add the new one.

Even so, I am sure that is not the issue. I think the publisher number and channel number must match as well as possibly the channel name, in order to keep the same advertisers targeting that ad block.

[farmboy]

My thought is this isn't something to be very worried about - there's a lot of assumptions being assumed here.

I think a more important concern is passing on any/all of your monthly earnings should you die. I remember a looooong time ago when one of the ASA's indicated they were going to work on this and I don't recall ever reading anything more.


FarmBoy

[MsHuggys]

I know I wasn't worried about it when I was making $50 a month, or even $500 a month. You don't worry about things that 'seem' so far off, they only deserve a back burner in the business plan. Funny thing happens when you start making major money... tomorrow is here.

Every day I don't worry about this now, is costing me blood that is invisibly bleeding. Everyone who works their business with as much dedication as I have, will wake up one day, and realized, the problem with not being able to transfer channel adverisers has robbed them blind. They will discover that when they sell out. That my peers, is much too late.

[farmboy]

Try thinking of an analogy of a company that owns billboards along the highway. The owner decides to sell. One big factor in determining the selling price is the owner has X billboards that are consistently rented for Y dollars per month.

The new owner has no guarantee the current advertisers will keep advertising after any current contractual obligations.

However, it's safe to assume that if they are rented now, current advertisers or new advertisers will want the space going forward.

I think your site is like that. Let's say channel-target advertisers did account for half the current AdSense income and they all would be lost if the AdSense publisher number changed.

I think it's safe to assume some would find their way back, some new advertisers would want to target the site and regular CPC advertisers would find their way into those ad displays.

I don't think the situation is so dire.


FarmBoy

[farmboy]

I am 56 years old.

Only 56? Why you young whipper-snapper.

As fast as technology is changing, you might just outlive AdSense.


FarmBoy

[MsHuggys]

We, you and I, all of us, are in marketing. We sell something to someone. If a potential buyer tries to beat me down on my price, saying that there is no guarantee any channel advertisers will come back, what can I counter? What figures are there, that I can quote, that say if these three top advertisers get ripped out, how long will it take for them to find their way back?

I, eventually all publishers, will have to 'sell' a potential buyer on why they should buy a site, and why the site is worth what we ask. We have to do that anyway. But, there are sites and statistics we can use to show how we come to that price, EXCEPT, in the case of Adsense. That is because of this particular issue.

If they resolve it, we can say, we had this track record, these increases over these months, the site was on the web x years before Adsense was developed, the site had dozens of #1 rankings for major keywords associated with the site, the domain name is sticky and easy to remember, it is keyword loaded or very short... all the usual pitches. We can show logical reasons for how we came to a price and we can support them. When we can not support our claims, our price will suffer.

It is realistic for me to believe I can sell that site for $250,000 down the road, with channel advertisers in tow. I really don't want to lose half that because my channel advertisers are obviously going to be lost for an unknown period of time that may be infinite. Like I said, it is different when you get into big money, and actually will live long enough to put the site up for sale.

I have sold major sites before and am quite well- versed in the tactics potential buyers use to beat down a price. There is every reason to ring the alarm.

[creeking]

it does seem like creating a company (with adsense account) just for a high-earning website would be the way to keep things running smoothly after a sale.

setting up an LLC in my state costs about $100.

[joelgreen]

MsHuggys, you could ask AdSense support that question. Maybe they have a scenario how to switch site owner smoothly

Also, be aware that should youedit the name of the channel in the future, you'll lose any existing advertiser bids for that channel.

I believe this is per publisher, so creating channels with same names would not work. Otherwise how would they distinguish between publishers having the same channel names.

[Leonard0]

According to Adsense Help, you can make changes to your account for the purpose of inheritance or mergers:

Though our Terms and Conditions don't permit transfers of account ownership, we do allow you to update your payee name to fix misspellings or to make adjustments for changes such as marriage, death, or company mergers.

[google.com...]

If the site is big enough and you have more than one site in your account, you could probably get a separate account for it before transferring it. A few members of this forum have more than one account.

[MsHuggys]

Leonardo0... thank you for that information!

[LostOne]

As far as channel names and advertisers targeting them I found this. The second sentence alludes to recognizing channel names? How else could they know how to target those pages?

Placement targeting...

"Advertisers use this to target their ads to individual placements in the AdSense network on which they would like their ads to run. An ad placement can be an entire website or a specific sub-set of ad units within that site, such as only ad units on sports pages or all ad units at the top of the page."

[trillianjedi]

it does seem like creating a company (with adsense account) just for a high-earning website would be the way to keep things running smoothly after a sale.

setting up an LLC in my state costs about $100.

That is the simplest solution to the problem - form an LLC and setup AdSense and Website both under that umbrella. Then you can always just sell the company shares.

However, it's not just the $100 setup costs. There's the on-going accountancy fees, and you absolutely must get tax advice before doing it, too.