The Importance of Valuing Your Online Business Assets for a Sale
Include These Online Business Assets in Your Valuation to Potential Buyers
The value of your online business assets, such as an effective website or database of digital subscribers, is just as important in the 21st century as the value of your company’s real estate or cash assets. The ability to create an online experience for a brand and to use online channels to reach new customers and retain existing ones is an integral part of business health and success. As a seller, presenting your online assets to your buyers can enhance the sale value of your company.
The results of online marketing are particularly measurable. A website may deliver leads, e-commerce sales or fulfill customer service needs. Regardless, website traffic, social media efforts and email open rates can be quantified with great accuracy at little to no cost.
As you consider selling your company, this information can be shared with potential buyers to help persuade them of the value of the overall business. And, in any event, it may help you verify your current online marketing strategies and consider new ones that could enhance the sale value of your company.
Six Examples of Online Business Assets That Increase Company Value
1. Domain Name
Website domain names can have value in and of themselves. There are many websites that will provide an estimate of the value of a particular domain name. Further, domain names are regularly bought and sold on auction websites. Thus, comparable values may be easy to estimate. There are also a number of firms that specialize in valuing them.
If you domain name has the following qualities, it may have higher value:
- Short length
- Easy to understand (radio friendly)
- Ends in .COM
- In-demand keywords
- Correct spelling
2. Prime Search Position
Achieving and maintaining a top-searched website in an industry is an art. Many marketing managers do not have a list of keywords for which their website has a ranked search position. However, this information is readily available to a registered owner of a website through Google and Bing Webmaster Tools. These tools show keywords and search position, along with volume of impressions and clicks with upward or downward trends. The market value of those keywords on search can be found on search engine marketing (SEM) platforms like Google AdWords.
The revenue value that your company can attribute to these assets depends on the actual number of visits to its website from those keywords and the outcomes of those visits. This data can be collected in Google Analytics. If those search visits are not effective at producing revenue-related outcomes, management may be able to find ways to improve return on investments (ROI). Thus, this evaluation can be used to identify underutilized search position assets.
3. Links from Other Websites
The most important factor in searching for a website is the number and quality of outside links, because other sites linking to your content is an indication that it adds value. Third-party tools, such as Majestic and Moz. can provide information on the quantity and quality of competitors’ links and their search engine marketing strategies.
4. Untracked or Hidden Online Assets
A website may also contain untracked or ‘hidden’ assets. Websites may have stand-alone electronic documents such as acrobat PDF files with search positions independent of the core website itself. If a search strategy is not well-optimized, these PDFs may not be linked appropriately to help maximize the connection to the rest of the website. Additionally, use of PDFs made available on the web is not tracked by web analytics programs, but the PDFs may be listed on other websites and in search engines. Because of this, they subsequently receive traffic. Thus, websites with many PDFs (typical of more technology-based companies) often have hidden and underutilized assets in their publicly available PDF library.
5. Email Addresses
Email lists may have value, especially if the company is regularly sending out emails through a legitimate bulk email vendor. In that case, the company will be able to identify how many of the email addresses are valid and how often the recipients open the company’s emails. Company email lists may have professional addresses, which become invalid over time as people change employers, so being able to show a clean, relevant list enhances the value of an email list.
Regular presence in people’s inboxes is a significant indicator of goodwill value of the brand. Click-through from the emails to the company’s website shows how engaged the audience is with the brand’s thought leadership.
6. Social Media and Community Value
Online followers on platforms like Facebook and Twitter, as well as levels of participation in industry-specific forums, are another type of online business asset. The reach and level of engagement can be tracked with varying degrees of automation.
Relationships with influencers-social media, bloggers, journalists and other thought leaders-can be demonstrated by showing engagement and interaction with these individuals. Interactions such as the “like” or “upvote” buttons, comments on content or echoing and linking to content are all indicators of social media marketing initiatives and their performance. Many of the social media platforms and third-party services show reach and engagement with your clientele.
How to Reveal Value
A well-organized assessment can show hidden value and under-utilized online business assets. Reviewing these online assets is an important part of due diligence. The value of online assets is a fast-emerging arena that can be useful in determining and enhancing the value of a brand in connection with preparing for a sale, and for providing insights to the management team where they may be underperforming or under-leveraging the brand in online platforms.
Consider the areas discussed in this article with your team as you evaluate the potential sale of your company. If your company is starting the sale process, implementing an efficient strategy may provide additional support to convince potential buyers that there is strength in your brand (in the market and online).
[ Editors’ Note: To learn more about this and related topics, you may want to attend the following webinars: Selecting the Right Valuation Expert and Roadmap to Selling a Business or Taking on Outside Investors. This is an updated version of an article originally published on July 1, 2019.]
©All Rights Reserved. July, 2021. DailyDAC TM, LLC d/b/a/ Financial Poise TM