Importance Of Diversifying Online Business 56 Comments
A little while back there was a major shakeup within the financial blogging community. The root of the problem was text link advertising which Google hypocritically does not allow.
I say hypocritically because Google happens to run the biggest text link advertising network online. The big difference though is that their text links do not pass PageRank or affect search engine rankings.
On the other hand, direct text link ads are often purchased with the intent purpose of helping search engine rankings. Despite pretty much every commercial website doing some form of search engine marketing, Google has decided that this particular practice crosses the line.
It was quite disappointing to see many blogging friends getting penalized for such a common practice. It just didn’t seem unfair. As someone who’s had more than my share of problems with Google, I could definitely relate.
In the blink of an eye, your online business can get turned on its head.
Now these bloggers are realizing something that I’ve learned many times over in my years of online business experience. They are learning the importance of diversification with an online business.
Diversifying Online Income Sources
It’s a simple fact that online income can be very unpredictable. Even without the threat of getting penalized by search engines, you never know when the random numbers will work in your favor. Some days you might happen to get traffic that is interested in your ads. Other days your traffic may have already visited those advertisers via other websites. Or some days your most popular advertiser could decide to cut back their advertising budget. Too much is out of your control.
To remain resilient and add some stability to your online income, the key is to diversify your income source. The more you rely on a single source of income, the more risk you are in.
If one income source drops, you want to have other sources of income to balance it out. This applies to your day to day variations and in tough times when one source of income hits a brick wall. You always want something else to fall back upon.
In extreme circumstances you can shift your entire focus over to those other sources of income. At other times you want to be trying to build up all of your main sources of income.
With blogging, a lot of people were heavily relying on private text link ads. It was just such an easy way to make money and many didn’t realize the risk they were taking. As a result many were neglecting exploring other income sources such as contextual ads, affiliate promotion, creating their own products and offering freelance services.
Even with these other sources of online income, unforeseen circumstances can happen. You may think your source of online income is secure, but are covered if something happens to your main income source?
Diversifying Marketing Strategies
In addition to using a mix of income sources, you also need to develop multiple sources of traffic. Your traffic can be even more unstable than your income. Search engine rankings can jump around, websites can change their link policies or websites can get penalized.
I’ve personally been in situations where I was heavily relying on Google traffic only to suddenly lose my rankings. Without sufficient backup traffic, I really suffered. Luckily I usually had some remaining traffic from Yahoo, Bing and other sites, but it paled in comparison.
So don’t be content with just 1 or 2 strong traffic sources. Always keep looking for more ways to generate traffic. The more sources you have, the more secure it all becomes overall. Perhaps you can generate more traffic from social media, forums, related blogs, directories and elsewhere.
The great thing about diversifying traffic sources is that search engines take note of this extra exposure. The more sites you have links from and the more social media exposure you have, the better your rankings usually are.
If you have the time and resources it may be a good idea to even branch out to starting additional websites. Since I have multiple websites, I sometimes switch focus to another niche when one niche faces problems. Not everyone has the time to run more than one website though.
Essentially you have to keep pushing and never be content with current traffic and income. Keep worst case scenarios in mind and always try to have some kind of backup.
So what are you doing to diversify your online business? Are you properly covered in case something happens to your main source of online income or traffic?