Nearly a year ago I published my first post on how a handful of online marketing companies, led by a Rocket Internet startup, found a weakness in Google’s algorithm. By hosting commercial content, for example coupons, on newspaper domains they would get great rankings in Google. They would receive millions of visitors a month and make millions in profit. These marketing companies convinced the likes of The Daily Mail, Le Monde, El País and BILD to, put simply, rent them a subdomain. More recently, CNN and Business Insider in the U.S. joined in. The CNAME (“Canonical Name”) DNS records for coupons.cnn.com and coupons.businessinsider.com were pointed to the servers of the Global Savings Group, the startup from Rocket Internet.
While researching the first post, the more data I collected, the more astounded I grew at the scale and success of this white label scheme. I will share estimates of visitor numbers and revenues further below.
At first, the post I wrote didn’t get much attention but after some months the reader numbers started to rise rapidly. A few tips started to trickle in from insiders. Then a few dozen. I published some follow-ups. The main one covered how white label sites allow the companies operating them to place essentially the same content multiple times in the same Google results page.
Before jumping into the updated data (the interested readers will find a link to it at the bottom of this post), let’s start with reviewing what the issue is.
New readers might ask themselves: What’s the big deal? What’s wrong with, for example, Business Insider providing their readers with an extra service at coupons.businessinsider.com?
Bloomberg quotes the founder of the Global Savings Group:
For Business Insider, doing a deal with Global Savings is a way to try to keep more readers glued to the site.
It’s easy to see that it’s not the whole story but, arguably, a misdirection. Tools like SimilarWeb make it possible to see the visitor sources of a domain. Here’s the data for coupons.businessinsider.com:
Likely less than one percent (the “referrals”) of the visitors to coupons.businessinsider.com are coming via the main Business Insider website. What about “direct traffic”? In my experience, “direct traffic” is often search traffic that wasn’t detected as such, for example, due to ad blockers. That isn’t exactly keeping readers glued to the website.
The actual play going on is to have the white label rank well in Google and make money from that free traffic using affiliate links. The proceeds are then shared between the Global Savings Group and Business Insider.
To get a sense for the number of visitors, check out the following chart from Ahrefs, which shows an estimate of the organic traffic the white label receives. Organic traffic refers to visitors a site receives from the search results in Google. This traffic is completely free.
(I found Ahrefs’ numbers to be reliable, but you can always double-check using tools like SimilarWeb or Searchmetrics.)
For comparison, within 4 months of launch, coupons.businessinsider.com had more visitors than the Chicago based Coupon Cabin – a coupon site that launched in 2004, took more than $54 million in funding and employs more than 50 employees.
The Business Insider white label received about 200,000 visitors a day from Google in May 2019. Which is even more impressive if one considers that it’s traffic for commercial keywords where the level of competition is very high.
Using a conservative estimate of $0.30 earnings per visitor, the Business Insider white label might do about $2 million in revenue. Per month. Or $24 million per year. And that’s only one of about 30 of white labels the Global Savings Group operates. And there are other companies that also operate white label sites.
Let’s now jump into the data.
Some caveats about the data: Most of the data was collected in May 2019. It might be already outdated at the time of reading. The visitor numbers are estimates from Ahrefs.com. They should be quite reliable but of course they are estimates and could be off. You can always compare with data from SimilarWeb to get more confidence in the estimates. The data is very likely incomplete. There might be more white label domains, operator and host companies that were missed. Furthermore, while finishing the last part of the research, I noticed some takeovers. For example, gutscheine.focus.de was in the past managed by the company SparWELT but now it’s under the control of the Global Savings Group. It’s likely that such changes happen from time to time. Last but not least, there can be mistakes that happened during the sourcing, cleaning and organization of the data. Please add a note in case anything is wrong, and I will try to update it.
To get a feel for the data let’s start with looking at the big picture. Below you can find a graph of the entities (companies and websites) in the white label world. White label operators are in the reddish colour. Newspapers and media companies hosting white labels are dark green. Websites are in a lighter shade of green. The size of a node is based on how many connections it has.
The graph allows us to notice a few things:
- The most central white label operators are the Global Savings Group and Savings United. They are surrounded by publishers and some smaller white label operators from Central and Northern Europe.
- There a few smaller second tier operators each operating a few sites and also a few third-tier ones with only one white label property.
- Some publishers like Axel Springer or Grupo Vocento have a central role. They rent subdomains to multiple white label operators. I won’t focus much on publishers in this post, but they might be the topic of a future article.
Next, a table with some summary statistics about the operators. The country column contains the country the operator is based in. The column “Organic visitors” contains the aggregate number of visitors the company’s white labels receive from Google (and Bing, haha). The last column contains the average Alexa rank of the parent domains.
A pie chart of the aggregate visitor numbers makes it easier to see the relative success in terms of visitor numbers:
From the table and pie chart we can extract some insights.
- There are 30 white label operators operating a total of 117 white label sites.
- In total, white label voucher sites are receiving more than 45 million visitors per month.
- Assuming $0.30 per visitor, the sites are doing about $13.5 million a month or more than $160 million a year in revenue.
- The average Alexa rank of the host domains is less than 20,000.
- The biggest white label operators are from Germany, and nearly all are from Europe. There isn’t a single American one in the list.
- The Global Savings Group is the most success white label operator owning half the market. (Before June 2019 the Global Savings Group only had 45.1% of the white label “market” but grew their share a lot by taking white label subdomains including gutscheine.focus.de from SparWELT and codepromo.ouest-france.fr from Savings United.)
- More than three-quarters of the white label “market” are owned by German companies.
Let’s look at the last point in some more detail.
Where do the operator companies come from?
I’m unclear on the reasons why, but the centre of white label activity is Germany. Thirteen of the operator companies, including the three biggest ones, Global Savings Group, Savings United and Heidorn are located in Germany.
An interesting side note, some of the companies based outside of Germany have a German connection. For example, a co-founder and the main investor of the Malaysian iPrice group are from Germany.
Next, let’s look at what markets the white label sites focus on.
How strongly are different countries affected by the white label scheme?
For each country, I calculated a “white label score” which is the aggregate amount of organic visitors white label sites receive divided by the total population of a country. It’s a crude measure but allows us to rank order countries.
Visualizing the data as a map we can see the core area of the white label activity in Central and Northern Europe in darker reds.
The white label operators seem to have the highest market penetration in Norway, Sweden, Germany and the UK, all very wealthy countries where a lot of money is spent in e-commerce.
Why white label? Why don’t the companies operate sites on domains they own?
This question is especially intriguing if one considers that revenues generated by a white label site need to be shared with the host.
White labelling seems to have started a few years ago. Existing voucher sites either pivoted to (also) operating white label sites or vanished into the irrelevance of Google’s second page and beyond.
The Global Savings Group at first launched discount code websites under the brand Cuponation. They still exist. You can still find cuponation.co.uk or cuponation.fr. Their Brazilian site cuponation.com.br is actually relatively successful. Soon after the launch it seems, they pivoted as they found much more success hosting their content on newspaper domains instead of building up the rankings of their own sites.
The table below shows, for a selection of companies that also have their own websites, the aggregate number of organic visitors to the operator’s own sites and to their white label properties
In the case of the Global Savings Group portfolio, nearly 90% of their organic visitors are to their white label sites. And, as you can confirm using some simple searches on SimilarWeb.com, most of their overall traffic is from Search. The most extreme case is that of Savings United. There, the share of white label is more than 96%. Their own websites like sconti.com only receive low numbers of visitors. In the case of the iPrice group, a Malaysian discount code site, and Vergleich.org, a German product comparison site, it’s skewed but relatively more balanced.
The table helps to answer the question posed above. The reason why companies focus on white labels is that these tend to rank much better in Google, receive more visitors and thus more revenue.
The money from large numbers of free Google visitors isn’t just great for the operators. The media companies care about it too.
Reliance of the media sites on white labels
Take for example Stern, a German magazine. Their two most successful sections in terms of receiving visitors from Google search are a white label for vouchers and a white label for product comparison.
It might be a bit far-fetched but considering that both voucher and product comparison are highly commercial topics, one could estimate that Stern is doing more revenue with their white label offerings than the remainder of their website.
Beyond the voucher topic: Product comparison and more
Whenever something makes money people tend to do more of it. If voucher white label sites make money, why not expand it to other topics? A few readers sent in messages about the growth of white label product comparison sites. And again, it’s starting in Germany. Below is a table showing the number of white label sites by topic as of May 2019.
Briefly reviewing the product comparison sites, they seem to be more sophisticated than the voucher ones. While on the white label voucher sites, the content is trivially transformed and rephrased (there are only so many ways you can write “$5 Off Orders Above $50”) the text surrounding the core product comparison tables seems to be unique. A reader sent in a tip that a lot of German companies use services like textbroker.com. There, a page of unique content can be purchased for as little as $10.
Here are two predictions:
- Companies will think of more topics that lend themselves to white labelling. For example, what about price comparison?
- The number of product comparison and other non-voucher white label sites will grow. Expect travel white label sites that start to compete with Kayak and Expedia within months of launch. Someone will launch white label price comparison sites that might rapidly surpass BizRate or Shopping.com.
What can be done?
Having spent quite a bit of time researching and thinking about the situation, the only actor that is able to do something are the search engines themselves, namely Google. Media companies won’t stop renting their domain’s trust to online marketing companies to exploit Google’s algorithm. For that, white label sites generate too much money. The operators of white label sites are too reliant on the revenue they get from white label sites. And no competitor is able to compete with such an unfair ranking advantage..
So, honestly, what can be done?
If you’re convinced something should be done, you could let Google’s team know and share your opinions and insights. You could do so by joining the discussion, preferably with thoughtful opinions and data, on Twitter (here is one with Danny Sullivan, Google’s public search liaison) or Hacker News.
I believe the correct solution on Google’s part would be to treat white label sites hosted on subdomains and subfolders as separate from the parent domain. Just like a blog registered on wordpress.com wouldn’t rank as well as the parent site, so too white label sites operated by third parties don’t deserve to receive the same trust as their parent domain. Instead, they should be treated as separate, independent sites that need to build their own trust and rankings.
See also my other post “A Response to Danny Sullivan and Google about White Label Sites in the Search Results” published together with this one.
Updated list of white label URLs (June 2019)
Below you can find the main table of data I used for the writing of this post. It’s easy to download a CSV from Airtable. Alternatively, here’s the data in a Google sheet.
I hope it’s helpful to anyone who’s interested in this topic or wants to do their own analysis. Also, maybe a Google employee finds it as a helpful starting point for looking into this issue.