How a Rocket Internet Startup, Daily Mail, and Others Exploit Google’s Algorithm and Make Millions

LoisH
LoisH
Jun 27, 2018 · 23 min read

Follow-up in March 2019: How to Rank Multiple Times in Google — Or: How Voucher White Labels Dominate the Results Pages

In the last view years, a few online marketing companies figured out how to game Google’s Algorithm by putting unrelated content on trusted domains, mostly from newspapers, and make millions in profit. The main players are Global Savings Group (formerly CupoNation), a startup from Rocket Internet (of Samwer brothers’ fame) and Savings United, also company from Germany. These two as well as a coterie of about 20 smaller companies run more than 80 white label voucher code sites for the likes of The Daily Mail, Le Monde, El País, and BILD in more than 17 countries — the US, for a curious reason to be discussed below, not being one of them.

The critical insight, had by these online marketing companies, was: Google trusts large newspapers (and even tabloids) and ranks anything they publish very well. So, what if you put some easy to monetise content, say voucher codes, and host them on trusted domains? The answer is that Google’s algorithm gets tricked into ranking you well, you get a ton of visitors and can make millions in affiliate commissions. And costs are low because it does not matter much if your content is any good, whether you build up a brand or provide a superior user experience beyond your competitors. The only thing that matters is to host your content on a strong domain, like for example dailymail.co.uk, and get Google to send you visitors.

But let’s start at the beginning.

Daily Mail and CupoNation

Some time ago, I noticed a large tabloid appearing in the Google results when searching for a voucher code. When online shoppers, for example in the UK, are looking for a voucher code for a website like Expedia.co.uk, the most common method to find such a code is to go to Google.co.uk and type in “expedia voucher code”. This returns a number of results which one can check to (hopefully) find a working voucher code.

When looking for an Expedia voucher, one would expect the top results to be, for example, from Groupon, MyVoucherCodes and VoucherCodes.co.uk. All three are well known voucher code sites in the UK. VoucherCodes.co.uk belongs to RetailMeNot, Inc. which was listed on the NASDAQ, has among its investors Google Ventures and they are pretty savvy when it comes to search engine optimisation (SEO). It can be assumed that everyone reading this also has heard of Groupon.

Now, to the surprise. Check out the screenshot below. The first result after the ad is unexpected. Why is Daily Mail, one of the biggest tabloids in the UK, being shown in the Google results for “expedia voucher code”? Did the Daily Mail change their business model? Also, how did they beat Groupon and a company who got advised by Google Ventures in ranking on Google?

discountcode.Dailymail.co.uk ranking first for “expedia voucher code” on Google.co.uk

If one clicks on the Daily Mail result, one actually finds a page listing Expedia deals. At the time of writing, the following two voucher codes were at the top of the page:

If one checks the ad above in the Google search results from CupoNation.co.uk, one notices something curious: Both pages seem to have the same content and even featuring the same “exclusive” voucher code.

To compare, here are the three topmost entries from both sites, first from the Daily Mail page:

Expedia voucher codes on discountcode.Dailymail.co.uk

And then from CupoNation.co.uk:

Expedia voucher codes on CupoNation.co.uk

Notice the similarities?

The voucher codes are exactly the same on both sites. The exclusive code is in both cases “AFFUKDML10HOT0204". The wording of the 25% deal is exactly the same on both sites, while the description of the voucher codes was rewritten. Both sites also look eerily similar beyond just having the same content. For example, in both cases, the voucher you’d have to use in the Expedia app “Submitted by a user” while the other two vouchers aren’t. Coincidence? Is somebody stealing the other’s content?

No. After doing some research on the Daily Mail page, we can find out that the “Daily Mail Discount Code” website is actually run by a Global Savings Group Ltd., which is the same company that is also behind CupoNation.co.uk.

In marketing terms, DiscountCode.Dailymail.co.uk is a white label site which is being filled with CupoNation’s vouchers and deals. The only real difference is an adjusted color scheme.

The Daily Mail only provides the subdomain on the Dailymail.co.uk domain, which is trusted by Google, and the Global Savings Group takes care of the rest.

In the following, I’ll use “operator” for the company which provides the content and runs the white label site and “host” for the media company that allows the operator to use their domain. In this example, the Daily Mail is the host and CupoNation, or more precisely Global Savings Group, the operator.

Who’s Behind Global Savings Group / CupoNation?

According to a recent Bloomberg article, which calls Global Savings Group a “Rocket Internet startup”, 40% of the Global Savings Group belong to Rocket Internet. The article further mentions that the investors include Deutsche Telekom AG and Holtzbrinck Ventures (which belongs to Holtzbrinck, a large German publisher of books and magazines).

More White Label Sites?

After some more digging I found that Metro.co.uk (another British newspaper) also has their own voucher code white label site operated by the Global Savings Group at discountcode.metro.co.uk and they even have the same exclusive 10% Expedia voucher code. But that’s just the tip of the iceberg. Why do something twice if you could do it dozens of times? But we’ll get back to that later. First, we need to understand why these white label sites exist. People with some search engine optimization background will be able to guess it but even they will be astounded by the numbers to come.

Why Create Voucher Code White Label Sites?

To make money of course. Quite a bit of money actually. How much? Let’s estimate that by first estimating how much a visitor is worth and then checking how many visitors the white label sites have.

Vouchercodes.co.uk explains on their about us page the business model all voucher code sites are working with:

In most cases, we earn a small commission from brands when someone makes a purchase using an offer on our site or app.

To get the average visitor’s worth, let’s assume 10% of the voucher code site’s visitors make a purchase, that the commission rate is also 10% and that the average sale amount is £60 — that makes about £0.60 per visitor. That seems reasonable but to be conservative let’s half it and continue with £0.30 per visitor. An academic report by a student who has worked at CupoNation mentions a revenue estimate for the Finnish market that would imply average per visitor revenues of between €0.70 and €0.92.

Next, we need to get an idea about how many visitors the white label voucher code sites get. SimilarWeb is a reliable source for such data. Let’s begin with the Daily Mail’s white label:

SimilarWeb data for discountcode.dailymail.co.uk

2.2 million visitors per month times £0.30 results in an estimated revenue of £660,000 per month, or just a bit less than £8 million per year. Not bad, especially as there isn’t really any additional work because the content is just a copy from the original website, CupoNation.co.uk.

Metro’s white label isn’t as successful:

However, 250,000 visits would result in an approximate revenue of £75,000 per month or just a bit shy of a £1 million per year. What’s cool (for the operator) is that there is basically zero marginal cost to run multiple white label sites. Running multiple white label sites is thus a very good idea with only potential revenue upside and near-zero downside.

What’s in it for the Host like the Daily Mail?

Most likely there is something like a 50:50 revenue share between the white label host (e.g. Daily Mail, Metro) and the actual operator of the white label (here, the Global Savings Group). A newspaper like the Daily Mail could thus easily add an additional revenue stream worth millions per year without incurring any cost. They could even argue that the white label voucher code site is an additional service they provide to their readers. However, as we’ll see, the existing audience isn’t of any importance for the white label site’s revenues. Let’s first address another essential question.

How do White Label Voucher Code Sites Attract Visitors?

One hypothesis (and one, both the white label operator and host likely would push forward) could be that existing Daily Mail and Metro readers see the discount code sections advertised on the main website and then go and use the voucher codes.

However, SimilarWeb data gives a different answer, as the following screenshot illustrates.

Traffic sources for the Daily Mail’s white label voucher code site according to SimilarWeb.

A whopping 96% of the visitors come through “Search”. In the UK this means Google. As it’s nearly the same in other countries in the following, for the sake of brevity, I will only refer to Google. The number of actual Daily Mail readers that are checking out the discount codes is negligible at about 1% (the “Links” information). The 2.56% direct traffic, furthermore, are most likely search visitors who use ad blocking browser extensions and not real visits where somebody typed in the site’s URL or bookmarked them.

In the case of Metro’s white label voucher code site, 95.7% of visitors are coming from Google.

A Simple Business Model

We can now understand the simple business plan that generates great profits for white label operators:

Bonus point: Repeat the above steps some more to get even more profit.

A Clever Competitor

While researching I found other white label pages hosted by the Evening Standard and the Independent. This time, however, they were not operated by the Global Savings Group but another company called Savings United (among their investors is Holtzbrinck Digital) and like the Global Savings Group they are also based in Germany. The interesting thing is that instead of hosting the voucher codes on a subdomain like Daily Mail did, the voucher codes can be found in a folder at www.standard.co.uk/vouchercodes or independent.co.uk/vouchercodes respectively. By putting the white label site into a folder instead of a subdomain, Google’s algorithm would have an even harder time detecting the duplicate, cuckoo-nature of the content. Furthermore, folders even provide ranking advantages over subdomains according to industry blogs.

On their website, Savings United markets themselves as:

The New Revenue Source For Premium Media Groups

And they are surprisingly direct (and honest) about how their business model works:

How voucher code white label sites work according to Savings United.

The money quote:

The customer searches for a voucher code on Google.

No talking around things. On their website, they also list a selection of their “premium partners”. Very recently Savings United launched another voucher code site for the British public hosted by the International Business Times: vouchercodes.ibtimes.co.uk.

As suggested above, to make more profit with white label voucher code sites all you need to do is to create more of them. And that is what the Global Savings Group, Savings United and a sizable number of smaller, national players did. The five white label voucher codes in the UK aren’t a lot. There are some countries with many more. Let’s start with Germany, the country where both the Global Savings Group and Savings United are headquartered in, but interestingly aren’t very strong in, proceed to the Spain and France, briefly review the situation in some other countries, wonder why there aren’t any white label sites in the United States, tackle some questions and ending the post with some actionable steps.

The Situation in Other Countries

To collect a complete list of white label voucher code sites in other countries I started with the official Global Savings Group (CupoNation) and Savings United websites, checking their press releases and then searching on Google to find even more sites. Doing reverse image searches for logos and certain phrases (after all, all white label sites belonging to one company used the same template) was very effective, too.

A few quick notes on the accuracy of the following data: The number of visitors as well as the share of visits coming from Google were taken from SimilarWeb. If not otherwise indicated, the visitor and revenue estimates are per month. SimilarWeb data is seems to be reliable but it’s still an estimate and thus might not be 100% correct. The estimated monthly revenues are also just that: Estimates. Their inclusion is relevant to understand the scale of things, something that could go under if only looking at the visitor numbers. The underlying assumption is a revenue of £0.30 per visitor. It’s reasonable that there are differences in the earnings per visitor across countries. Furthermore, identifying who runs a white label site wasn’t always easy, oftentimes it is obfuscated or just not mentioned at all. Sometimes the white label hosts switch the white label operator. If you notice any mistake, please let me know.

At the bottom of this post there is a link to a spreadsheet with all the white label site addresses. I thought about how to best visualize all the information but didn’t come up with any workable idea other then the following list (unfortunately Medium doesn’t support tables).

Germany

While the research most likely wasn’t exhaustive, the following 14 white label voucher code sites are active in Germany. Of these the most, five, are operated by SPARWELT GmbH, a German company. The Global Savings Group runs one white label site hosted on the news magazine Spiegel and Savings United seems to be absent altogether. We’ll see that their strength is in other markets.

Spain

The voucher code white label market, if one could use this term, is dominated by the German Savings United and Global Savings Group. There is also a smaller Swiss white label operator and only one local player present:

With their own website and their white label sites Savings United has 5 sites, all with essentially the same content that appear in the Spanish Google results.

France

Sweden

Norway

Denmark

Finland

Austria

Belgium

Poland

Switzerland

Italy

Russia

Brazil

Mexico

India

What about the United States?

Even after some spending quite a bit of time on research, I could not find a single white label voucher code site that is present in the American market. Neither could I find any active in Australia or Canada either. One possible explanation is that the Google Algorithm is different or at least differently tuned for different countries and languages. Most Google engineers are, after all, in the United States. It’s much more likely that they notice any exploits and adjust the algorithm accordingly faster for their home market than for smaller, more remote markets.

Even after some search, I could not find a single white voucher code label site that is present in the American market.

What’s Are the Total Revenues Like?

Let’s do some very rough revenue estimates. First, for the two biggest white label operators and then for the whole “white label voucher code market”.

Global Savings Group

We identified more than 23 white label sites from the Global Savings Group. For 16 we have visitor estimates. For these 16 sites the estimated revenue is on average about £115,000 or in total £1.95 million per month. For all 23 sites, that would imply £2.6 million per month. That’s about £31.7 million per year. Let’s assume that 50% of the revenues need to be paid to the white label host, then we’d expect the white label sites to contribute about £15.9 million per year to the Global Savings Group’s revenues. Let’s double check if these numbers make sense:

A Bloomberg article mentions that the Global Savings Group in 2016 generated “€463 million ($546 million)” in sales for retailers. The share that they receive in affiliate commissions is mentioned in the article as being between 5% and 15% or €23.2 and €69.5 million. In light of this, our estimate looks reasonable. If we remember the Finnish per visitor revenues of between €0.70 and €0.92 implied in the report from the student who has worked at CupoNation, the actual numbers might be considerably higher.

One interesting conclusion: Most likely the largest share of revenue the Global Savings Group generates is due to white label sites that exploit a weakness in Google’s algorithm. Next, let’s look at the second big operator of white label voucher code sites.

Savings United

We found 20 sites but due to most of them (14) using a folder structure to host the white label site, we don’t have good estimates for their visitor numbers. For the white label sites where we do have estimates, the average revenue is £66,000 per month. This implies total monthly revenues of £1.3 million per month or about £15.8 million per year. Again, let’s assume a revenue share of 50% with the host. This results in total yearly revenue of £7.9 million from running white label voucher code sites for Savings United. Like in the Global Savings Group case, the revenues from the white label sites seems to constitute the largest part of their total revenues. The positioning as a white label provider for “premium publishers” makes good sense.

The Total White Label Voucher Code Market

For the sites where SimilarWeb provides data the estimated monthly revenues are approximately £4.4 million, which would imply, considering there are about as many sites where we have no data, overall revenues of at least £100 million per year for the whole white label voucher code market. While high, these numbers look reasonable if one considers that the biggest international voucher code site, Retailmenot.com, had revenues of $280.42 million in 2016.

Should Google Care and Other Thoughts

There are four thoughts I have about whether Google should care about the white label sites:

Next, let’s consider some more questions and possible counter arguments by the white label hosts and operators.

Didn’t Newspapers Always Offer Additional Services Like Job Boards? Why is this Different?

Many newspapers, like the Guardian, offer additional services to their readers like dating sites (soulmates.theguardian.com) or job boards (jobs.theguardian.com). There are, however, some marked and critical differences to the white label voucher code sites:

Maybe the White Label Sites Deserve the Rankings?

It’s a possibility that Google doesn’t (just) rank the white label sites due to the trust of the host domain, but that other factors are responsible. These factors could be that the websites provide a better user experience than other voucher code sites or that they have a lot of backlinks, which are critical for Google rankings.

However, both possibilities aren’t the case:

Thus, neither a better user experience or better search engine optimisation could explain the good rankings. The most obvious explanation is thus the advantage the host’s domain provides. This hypothesis is supported by the fact that Global Savings Group, Savings United and other operators of white label sites predominantly work with companies who have strong domains, most from newspapers or magazines.

The communication on Savings United website is aimed at media companies with taglines like “The New Revenue Stream for Premium Media Groups” and they clearly state that the goal is to receive visitors from Google.

Doesn’t this Help Newspapers to Finance Themselves?

This might be an intriguing thought for a second — newspaper financing journalism by exploiting Google’s algorithm and making money by showing people voucher codes — or maybe not. The problem with such an argument would be that white label voucher code sites are unrelated to media companies’ offering which results in a bad misalignment of incentives.

Why do any journalism if one can just put something (anything) onto the domain and make money with it? We discussed above why additional services like job boards are not comparable. Further, a comparison with traditional advertising also isn’t valid, because advertisers are interested in the readers the journalism attracts. A newspaper can only sell advertising if they have readers and to have readers they have to publish something that the public wants to read.

The white label voucher code sites, on the other hand, are unrelated to the media company’s offering and just focused on exploiting a weakness in the Google’s algorithm.

Spreadsheet With 80+ White Label Voucher Code Sites

Click here to see the full spreadsheet of voucher code white label sites.

If this article receives sufficient interest, I will likely follow up with some more technical analysis of the white label sites and company networks behind them.

Follow-up in March 2019: How to Rank Multiple Times in Google — Or: How Voucher White Labels Dominate the Results Pages

Addendum September 2018

Over the last week a few emails came in from people pointing out that most of the white label voucher code sites benefited immensely from the recent August 1, 2018 “Medic” update from Google. The update focused on promoting “Expertise, Authoritativeness and Trust” in the results and demoting results that aren’t considered by Google to be trustworthy. This (possibly unintentionally) boosted the rankings of the white label sites because they generally are hosted on well-known and (when compared to sites and blogs that could be described as propagating fake news) trustworthy sites.

Addendum March 2019

There are now white label sites active in the U.S: coupons.cnn.com and coupons.businessinsider.com operated by the Global Savings Group and wired.com/coupons/ operated by Savings United.

You can find more on the topic in my new March 2019 story: How to Rank Multiple Times in Google — Or: How Voucher White Labels Dominate the Results Pages.

LoisH

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LoisH

Research & Analysis. One topic at a time.