Keeping an eye on your competitors is important. Knowing who they are, what they are doing and what their customers (members) are demanding will help you improve your own website. When considered this way, competitors can be a positive influence on your site – they can even help you make more money.
How online communities make money
The majority of online communities make money through advertising. This can be in the form of graphical banners, text ads or affiliate links. Some can even charge for membership, although this is not common and should only be attempted if the content in your community is extremely valuable.
Keep an eye on all competitors, but particularly the most successful
You should be scanning your competitors websites on a regular basis. You should check out the sites that are smaller than yours, as well as the sites that are significantly larger. The larger sites are likely to be making more money, but this may not always be the case. Smaller sites tend to be more innovative in order to differentiate themselves so make time to check out the small fry, too!
When you visit the sites of your competitors, consider the following:
1. How are they making money?
Are they using banner ads? What size? Where are they positioned? How many banners are there on each page? Are they using text ads or affiliate links? Where, when and in what context?
2. What companies are they working with?
Your competitors may be promoting products that you have never considered pushing on your website. They may be working with companies you haven’t tried working with yourself. If your competitors feel these companies and products are good enough for them, why not give those companies and products a try yourself? It never hurts to experiment, and the potential gains can be enormous.
Keep an eye on the SitePoint Marketplace
I always keep an eye on the Sites for Sale section in the SitePoint Marketplace – when forums and other online communities come up for sale you can learn how much revenue they are generating alongside other useful information such as traffic statistics. You can then take a look around the site and see how they are generating that revenue.
Every now and then a community is put up for sale with great income figures – these are the sites I am particularly keen to check out; not with a view to purchasing, but to find out just what they are doing to make that money!
Competitors help you succeed
If you see competitors as a solely negative influence on your site, you are destined to fail. Competition should be seen positively – they ensure you differentiate your site, they ensure you work hard to keep your members happy and they can help you make more money. For more information on understanding your competitors, take a look at the UK Business Link website.
Do you keep an eye on your competitors? Have you looked particularly at how they make money in order to increase your own revenue? Did you change your monetisation techniques based on what you saw your competitors doing? Share your thoughts, opinions and experiences by leaving a comment below.