Can You Sell a Business That Profits 100% from Paid Traffic?
Why Brands Lead to Wealth Over Landing Pages
If you’ve ever wondered what the value of an online business would be if 100% of the traffic was from paid advertising, this article is for you.
Sure, organic SEO and white-hat backlink techniques will pay off eventually, but paid advertising is almost immediate. Paid advertising (often called paid traffic) gives business owners insight into customers’ likes and dislikes, which ads convert traffic into customers, and which ads result in higher bounce rates.
Paid advertising is when you purchase advertising space on other websites. These ads can then be linked to your website or product page, and when someone clicks on the ad, they will be directed to your desired URL.
You can create paid ads for your business on Facebook, Google, or Instagram or use banner ads on other people’s websites. Because paid traffic is immediate, you skip a lot of the time required to gain the same amount of traffic using organic SEO tactics.
Organic traffic can be extremely valuable, but waiting for a profitable outcome from your efforts can feel like watching paint dry. We often get asked by online entrepreneurs how anyone could sell a business using all paid traffic. Is it even possible?
It is, and it all comes down to branding.
After all, wouldn’t it be easy for someone to replicate your landing page (more on this topic below) and just copy the ads you are running to a similar audience and product?
Well, yes and no. Paid media can increase traffic and sales if done right, but can also cost you significantly in ad spend if your cost per click (CPC) increases over time. The more sales revenue your business produces, the higher your valuation will be when you decide to exit. Before we break down how to sell a business receiving 100% paid traffic, let’s cover how you should not use paid traffic channels.
A Landing Page Is Not an Asset
As mentioned above, a landing page is something that can be easily duplicated and should not be considered the main asset of your business. The landing page (also called a capture page, squeeze page, funnel page, or splash page) is nothing more than a portal between your customer and their purchase of your product or offer.
Landing pages are extremely useful from a marketing standpoint, giving traffic a glimpse of your company and inviting them to learn more about you. These pages, however, are not so useful when planning your exit from the business, as they are simply portals.
In this scenario, there is no real value in the business — the page simply exists to be a bridge between the business and the paid-for traffic, and that’s about it. There is no real lasting value when the only thing your business brings to the table is an easy-to-copy landing page. Businesses that have been constructed in this manner offer great cash-flow potential but make for terrible assets, with no real value as a standalone page.
A Brand That Uses a Landing Page Is a Different Story
An e-commerce brand sending an abundance of paid traffic to buy its products is a more stable investment than a standalone landing page:
It is more than a landing page; it has a real brand behind it.
You might be in the midst of building an online business where paid traffic is your primary marketing strategy, and that’s OK. If your plan is to one day sell this business, you will need a lot more than just a landing page and a well-designed logo to start building any real value. So what makes a real brand, anyway?
Social Media Following
We understand that social media followers can be synthetic. With services offering you thousands of likes, followers, and friends for a small fee, you might think more is better. The simple fact that you even have a social media presence to begin with is more than a great starting point to building a trusted brand that people will buy from.
Try to focus not on the size of your following when building a paid-traffic-only business but rather on the engagement you have with your audience. The more you can persuade followers to like and share your promotional content, the more web credit your business gains with potential customers.
Actual Active Engagement
Having a large social media following is great and all, but it doesn’t do much good if no one is engaging with your content. As mentioned above, the more your audience shares and comments on your content, the more trust you build with those new to your brand.
We don’t just mean likes here, but actual engagement with your content, whether that’s sharing your product with family and friends or someone tagging a friend in the comments section of a new blog post. Active engagement is something that builds real value for a business and something you should consider as a primary focus within your marketing strategy.
Web Credit
In other words, trust. The more web credit or trustworthiness you build for your brand through customer reviews and product mentions, the more credit you gain. This was ultimately what spawned the “influencer” role, as brands were looking for ways to connect on a more peer-to-peer level with their audience.
People using, reviewing, and basically providing free advertising for your products builds even more trust with new visitors. The fact that other customers are promoting how great your product is presents a real “mindshare,” which can be a total game changer.
Long-Term Businesses Use Email
Businesses using 100% paid cold traffic will often shift to another source of traffic once they establish a market presence. Savvy entrepreneurs know that to scale their business and see some return on investment (ROI), it is in their best interest to collect and cultivate an email list.
There’s more to building an email list than most people may think. When it comes to developing a long-term asset, the goal is not necessarily to build the biggest list but rather a list that has an active and addressable audience.
Helps Build an Addressable Audience
An addressable audience is any traffic that willingly signed up for your newsletter, downloaded your PDF guide, or engaged with your brand or content in an active manner. Building an email list with this type of audience in mind enhances paid traffic through retargeting ads.
Retargeting Options
Retargeting allows you to build ad campaigns for traffic that engages in specific ways with your content. This can be very useful when serving ads to traffic, as you will have more insight into which ads match where customers are in your sales funnel.
With retargeting, you can also build ad campaigns based on customer lookalikes. Once you develop your customer personas in detail, you can use this data to build cold traffic campaigns. Both customer and engagement lookalikes make finding quality customer leads even simpler and help lay a foundation of the key demographics that are converting the most.
Sure, building a business without an email list can be done (FBA sellers do it all the time), but to scale something with real value and low risk, you can’t go wrong with building a list. Remember, email can and should be used to monetize and increase your revenue if ultimately your goal is to get the best valuation prior to an exit.
Traffic Is Traffic
Whether it’s SEO or paid traffic, at the end of the day it’s all the same thing — getting people to buy what you have.
A business should be more than its traffic source; your asset value should be based not on a well-played Google ad but on much more than that. The key to successfully selling a business using only paid traffic is this: building a brand, a customer database, email lists, and paid marketing assets, all created from a purely paid-advertising approach.
This is something that can be done with some effort and because you have built something more than a fancy landing page and a well-optimized ad campaign. It offers real value. Ultimately, what any buyer is looking for when purchasing a business is not your traffic source but the actual asset you’ve created.
Focus on Building a Brand
If your primary focus is to build a real brand with a focus on making real money, then you can expect to make a deal happen when the time comes to exit. If you haven’t already, be sure to check the value of your business as it stands today to get a better idea of how much it’s worth compared to similar assets being sold. Whether you receive traffic from organic or paid sources, or a bit of both (ideally, for a better valuation), you can make a huge exit from your paid-traffic business following the steps outlined in this post.
