Size Doesn’t Always Matter, Authority Does.
I talked to Wu and got to know him a little better. We found out that he’s a young man who lives in an apartment, and lives on Subway and weekend drinking. I can relate to that. When I was 22 I had a similar lifestyle, except you could replace Subway with McDonald’s and $15 million with basically broke.
Yes, Wu certainly did something right. But what was it that he did so well as to net him such an astonishing amount of money for a blog that he had only been running for a little over 2 years? What was so enticing about Bankaholic that BankRate was willing to plunk down $15 million?
I talked not only to Wu, but to hugley successful blogger Jeremy Schoemaker of Shoemoney (see our video interview with Schoemaker at BlogWorld) as well. I asked Schoemaker why he thought Wu had gotten such a great deal, to which he replied, "Simple. It was an authority in the banking industry. Especially with all the banking news going on, now those keywords are hotter then ever."
There’s no question that the keywords Bankaholic ranks for played a role in the acquisition. Bankrate even talked about the hot keyword traffic in the press release, but was that the sole motivation for BankRate to pay such an expensive price for the blog?
Wu himself said that Bankrate was a "traffic hungry financial powerhouse looking to broaden their portfolio of online properties." We at WebProNews have speculated that perhaps they were looking for a property to allow for more user engagement. When you look at Bankrate.com, there is not much of a community or social element, a blog is the most obvious way to engage readers, and when you have a blog that can bring in such a good amount of organic traffic, the potential for opening up that engagement increases tremendously.
Schoemaker didn’t really think that the engagement factor was integral to Wu’s deal with Bankrate. When I asked him if he thought it played a particularly big role, he said, "In this case I do not think so. I think the most important factor was that it was an authority in a very highly competitive niche." That’s not to say that Schoemaker was downplaying the importance of engagement in general. In fact, he places a "huge amount" of importance on it when it comes to the success of a site. "There are millions of blogs out there that never have any direct interaction with their audience," he says. "You can set yourself apart by doing this." He cites responding to commentators and meeting users at shows specifically.
Responding to commentators is huge indeed. I’ve talked about this at SmallBusinessNewz before. You should treat your blog like your own social network. Wu does this. It is not uncommon for a post at Bankaholic to have over 40 comments, and within those comment sections, Wu is actively participating. He’s engaging his readers in conversation.
Engagement tends to come natural when you love what you do though. Wu doesn’t seem too concerned about retiring just yet. He’s going to continue blogging at Bankaholic. "I like blogging, so I don’t mind," he says. "Especially right now, with the financial world in total chaos, there’s no shortage of topics to write about. This is history in the making, and it’s fun to document it." He will remain blogging at the site for an undetermined amount of time, but he said that if he were BankRate, he would hire additional writers as well, so it’s hard to say if he is looking at this as a permanent gig.
Authority leads to engagement.
If you can become an authoritative source for information as a content site in your particular niche, engagement will naturally follow if you allow for it to do so. Enable commentary from your readers. Participate in discussion with them, so they know you are involved. It’s amazing the amount of discussion that can be generated, and not only will this benefit those involved in the discussion itself, but it will be there for all readers to read and learn from, which is why I still consider new media to be a legitimate source for information.
Advertisers will also be drawn to a site that is seen as an authority in its niche, particularly when that is evident by the level of user engagement. If a site has a lot of legitimate comments, advertisers will see this basically as a community of professionals in the target market they are interested in. With enough authority and user engagement, a site is likely to attract offers from potential buyers as well. Just ask Johns Wu.
What are your thoughts on the combination of authority and user engagement? Is this the recipe for success?
Update: I’ve posted a follow-up interview with Wu. It was originally supposed to be included as part of this article, but due to conflicting schedules, we were unable to get it together. He talks about negotiation, and engagement.