Affiliate is a hard business, but there is a company that figured it out at scale and is on track to drive $1.6b in revenue from it next year. "Company" is an understatement because Red Ventures is a conglomerate of over 100 websites. The big question of this article is "how do they grow sites so successfully?"
Red Ventures in a nutshell
Over 4,000 employees worldwide groom and grow sites like healthline.com, thepointsguy.com, creditcards.com, or greatist.com. All big household names. All drive a lot of traffic. In sum: over 300M monthly sessions.
Red Ventures buys online businesses with a high degree of affiliate revenue, tunes them up, and ... keeps them. They're not in the flipping business. They're in the empire business.
I didn't find the cost of the Healthline acquisition in 2019 but the company raised $130M in funding and drives an estimated annual revenue of $100M, so I personally don't think this deal went down below $300M. BankRate, which owns sites like The Points Guy or creditcards.com, was acquired for $1.4b in 2016.
Red Venture's Growth playbook
I looked into two businesses Red Ventures acquired to find out how they grow them. Here's what I found
In 2012, Healthline placed #36 on the ranking of health information sites. In 2016, it was #4, increasing monthly sessions from 2 to 56 million (source). In 2018, annual revenue reached $100M and its audience grew at about 60% YoY.
SEO is key in that strategy.
Healthline.com racked in over $100M in revenue in 2018 and grew its audience at 60% YoY at the time. Stats from SEMrush show that the site went from 18M to 200M monthly sessions within 5 years.
The team behind Healthline achieves top rankings (and even double rankings) for highly competitive queries by creating guides and blog articles. Speak about keyword cannibalization.
How do they do that?
First, Healthline employes over 150 clinicians who edit articles and cite studies (source). They invest a lot in high-quality content and experts (see their team: https://www.healthline.com/nutrition-team). Google rewarded Healthline in the 2018 Medic update with massive traffic jumps.
Second, Healthline grooms content meticulously. The site used to have 1M URLs indexed in 2014. In 2016, it had 20K. Today, it has 80K. Quality stands in the foreground, much more so than quantity. No piece of content is older than 2 years because freshness is very important in the health space. It goes so far that every piece of content has a maintenance cost assigned to it.
Third, the team tests everything and collects feedback from every article. In 2018, they got over 40,000 data points of feedback from articles alone.
The Points Guy
The Points Guy is a fascinating story of a blogger Brian Kelly who worked for Morgan Stanley in 2011, started an affiliate site, and sold it for over $20M. He is still the CEO of TPG and now GM at Red Ventures.
Along the way, TPG bought many smaller competitors like Mommy Points, Travel is Free, or Million Mile Secrets.
44% of the site's traffic comes from organic search. The company has 15 people working just on SEO (source).
Key to the success of TPG is focusing on intent-driven keywords that indicate a strong interest in buying something like "best credit cards for travel" instead of just "best credit cards".
TPG looks at which stories that drive most engagement instead of most traffic (55% are repeat visitors). That focus leads away from quick wins and leads toward improving user experience.
These two strategies, intent-driven keywords and measuring engagement over sheer traffic, reach across all Red Ventures sites.
A recipe for growth
The playbook for Red Ventures is simple:
- Buy a well-running business in the affiliate or publishing space.
- Invest in Technical SEO, UX, and content to prop the business up.
- Target intent-queries, measure engagement, and revenue impact of content.
- Track users across sites and build an eco-system of sites to dominate the SERPs.
In September, Red Ventures acquired CNET (owns ZDnet, Metacritic, Chowhound, Gamespot) for $500m (source). Some of the sites are having serious traffic issues. I have a feeling that will change very soon.