What I Learned Spending $100m+ On Digital Assets

Expand your business through strategic acquisitions of websites, newsletters, and more, to quickly gain a competitive advantage

By Nick Eubanks | March 22, 2024

What You'll Learn...

What are digital assets and why should you care?

What if I told you that your business’s next big growth phase could be bought, not built? What if you could turn your extra cash reserves into market share, overnight?

Let’s talk about the power of acquiring digital assets.

Digital assets are any digital content or online presence that holds value for a business. This could include websites, blogs, social media accounts, newsletters, online courses, and even domains. These assets can be valuable because they can significantly improve your online presence, attract a broader audience, and generate revenue.

Let me show you a few hypotheticals:

Imagine you own a small, artisan coffee shop in a growing city. By acquiring a well-established blog dedicated to the local coffee culture, with articles ranging from brewing techniques to interviews with local coffee shop owners, you can instantly connect with the local audience of coffee enthusiasts. This not only boosts your shop’s visibility online but also positions you as an authority in the coffee industry. 

Suddenly, you’re a key player in the coffee conversation.

Let’s say you’re an established entrepreneur with an online course about sustainable living. You purchase a profitable website that sells eco-friendly home goods and a newsletter with tens of thousands of subscribers interested in sustainability.

The website provides a direct revenue stream through product sales, while the newsletter offers a fast way to promote your own course. This dual approach quickly diversifies and grows your income.

Now let’s say you’re a freelance graphic designer with a unique style, but you’re struggling to get noticed in a saturated market. By securing a catchy domain name (e.g., VibrantDesigns.com) and the accompanying Instagram profile, you can quickly showcase your work and design process, setting yourself apart from the competition. 

Potential clients can easily find and remember your site, and your Instagram profile provides a visually appealing portfolio of your work. This combination enhances your online presence and makes it significantly easier for clients to find, follow, and hire you for their design needs.

Acquiring a digital asset can help you grow your business fast. 

Acquiring digital assets at SEMrush

Back when SEMrush originally looked at Backlinko for potential purchase, we saw a vibrant community that crafted content focused on guiding beginners with its high-quality, actionable information. 

We also saw that they completely overlapped our major SEO keywords.

Backlinko was an affiliate, so we knew its value in terms of affiliate commissions. On top of that, their content was great, they had a robust video library (which is now part of our academy) and a very large email list.

The decision was easy, we bought Backlinko. 

When the purchase was complete, we suddenly had a huge injection of content, a brand new audience and numerous other perks. It helped us grow at a speed that the traditional channels just could not match.

Imagine what the following could do for your business: 

  • Purchasing a newsletter that has hundreds of thousands of readers who perfectly match your audience personas.
  • Buying an established domain that everyone thinks is yours anyway. 
  • Buying that one competitor’s blog post that’s keeping you in the number two spot on the Google rankings. 
  • “Renting” a newsletter for a year to cross-pollinate with your newsletter, growing your list size by 40%. 
  • Acquiring a website that drives 25% of their affiliate leads to you already, now giving you 100% of the leads.

Whatever digital assets you end up acquiring, if you do it right, it will significantly lift your company’s growth trajectory. 

When the purchase was complete, we suddenly had a huge injection of content, a brand new audience and numerous other perks. It helped us grow at a speed that the traditional channels just could not match.

When founders should acquire digital assets

As a founder, you know what it’s like to fight for attention. You know what it’s like to fight for every tiny bit of traffic to your site. It can be exhausting. 

But there’s a shortcut. 

Investing in digital assets can expand your business’s influence fast and brings a host of benefits:

  • Rapid Growth and Scale: Digital assets provide immediate access to new markets, audiences, and technologies, allowing for rapid scaling. Buying or renting a well-established asset eliminates the time and resources required to build a similar asset from scratch.
  • Enhanced Market Presence: Acquiring websites, blogs, or newsletters can quickly expand your brand’s visibility and authority in your industry. It’s a great way to build your market presence and attract more customers.
  • Instant Keyword Rankings: Instead of spending months trying to claw your way to the top of the front page of Google, imagine purchasing the competitors who are already there? You’ll instantly gain that audience you’ve been fighting to capture.
  • Diversification of Revenue Streams: By integrating new digital assets, you can introduce additional revenue models into your business. Whether through advertising, subscription services, affiliate marketing, or direct sales, each asset brings its own monetization potential.
  • Strategic Market Positioning: Through strategic acquisitions, you can eliminate competition, enter new niches, or secure a dominant position in your market. 
  • Access to Talent and Expertise: The bigger acquisitions, like buying out a company, often brings in new talent with specialized skills and knowledge that can be pivotal in driving your business’s growth. 
  • Risk Mitigation: Diversifying your business through digital assets can also spread out and mitigate risks. If one part of your business faces challenges, other assets can provide stability and income, ensuring the overall health of your business.

Obviously, there’s a lot of good reasons to acquire other people’s assets, audiences or tools. But you have to be careful, if you don’t do your due diligence, you will waste a lot of your resources, money and time. 

In my day-to-day running the acquisitions team at SEMrush, I design, build, and maintain the financial models that help us find out which assets to target for acquisition.

After spending over $100 million dollars on digital assets–I’ve learned a few things that will help you find the right digital asset to acquire.

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The digital assets acquisition recipe

Step 1: Figure out what you want and how much you can afford

When you go to buy a car, you generally need to know two things: why are you buying the car and how much you can afford. First, what are your goals for the car? Are you looking for a minivan to haul your kids around or a truck to haul construction equipment? Second, you should have a good idea of how much you can afford to spend. There are a lot of college students out there who blew their rent money on an Audi they could not afford. 

Acquiring a digital asset is a lot like buying a car. 

Let’s start with the why.

Is your primary aim to boost your immediate cash flow or acquire more long-term investments? 

Is your goal to enter new markets or niches that are currently beyond your reach or is it just to have a stronger stake in the market you’re already in? 

If you answer these questions early, you’re not going to be caught up with the shiny new businesses everyone’s talking about. 

Write down your top growth objectives, and rank them in order of priority. This will help you stay focused on assets that align with your main goals.

Now let’s talk about how you’re going to afford it. Before you buy any online businesses or websites, it’s important to know how they’ll fit into your budget and plans. 

Understand how much money these assets make after paying for things like interest, taxes, and other big costs. This helps you see how well the business is doing now and how it might do in the future. 

While an email newsletter might start generating revenue fast,  if you’re purchasing a blog for the keyword rankings, it might take some time.

Getting these financial details right helps you decide how much you’re okay with spending and when you expect to start making money from your investment. You have to think about how long it will take to start seeing a return on your investment. 

For example, if you buy a newsletter that’s already making good money and you can easily add it to what you’re already doing, you might get your money back faster and keep making money from it. But if you’re buying a website just for the SEO rankings, it might take more time to recoup that investment. 

How to do it:

  • Write down your top three investment objectives. What are you trying to achieve with these investments?
  • Rank these objectives in order of priority.
  • Identify key performance indicators (KPIs) for each objective to measure success post-acquisition.
  • Do a thorough review of your current financial situation, including cash flow, profit and loss statements, and balance sheets. Having these at the top of your mind will help you know how much you can spend and when.
  • Based on your financial review, set a maximum budget for the acquisition, considering both the purchase price and additional expenses for integration and scaling.
  • Now add in the potential costs associated with growing the asset to achieve your investment goals, including additional marketing, development, and operational expenses. Also add in a contingency fund to cover unexpected expenses or challenges that will show up during the acquisition process.

Step 2: Find out which assets accomplish your goals

Now that you know what kind of assets you’re looking for, start looking. Finding the right digital assets requires a structured approach to ensure they align with your business’s needs and goals. Here are some places to look to find the right digital assets to acquire:

Look at SEO rankings

When looking at your position in the search engine rankings, it’s crucial to know who you’re up against for those top spots.

You can use tools like SEMrush for a comprehensive competitive analysis. These tools will show you who holds the ranking positions for your targeted keywords, the search volume these keywords attract, and the overall competitive environment.

How to do it:

  • Create a list of essential keywords relevant to your business and potential acquisition and figure out how much each keyword is worth to you.
  • Use the favorite SEO tool to analyze the ranking positions for these keywords, focusing on the top competitors.
  • Assess the search volume and competitiveness of each keyword ranking your potential acquisition has and plug that into your financial model to see how much each keyword is worth. 

Look at who has the first-party data you need

Collecting first-party data from your audience’s interactions with your website, apps, or social media is crucial for understanding consumer behavior, preferences, and engagement. As the digital environment moves away from third-party cookies, the value of first-party data increases. 

By focusing on acquiring assets rich in first-party data, you’re investing in a resource that can significantly boost your marketing, product development, and customer experiences.

How to do it:

Find websites in your space that collect first party data and ask write down the answers to these questions: 

  • Does the website’s audience match or complement your target demographic? 
  • How does acquiring the site enrich your understanding of your customers? 
  • Would it close knowledge gaps, introduce you to new customer segments, or provide deeper insights into consumer behavior?

Review the quality, scope, and variety of the target site’s first-party data. Examine their data gathering techniques, privacy policies, and how they secure user consent. The last thing you want to do is buy into a legal nightmare.

Look at the newsletters your audience reads

Newsletters and email lists are, in my opinion, the best way to stay in touch with your audience. They allow you to send tailored content, recommendations, and special offers directly to your followers, whenever you want. Acquiring a newsletter can be a fast injection of leads into your marketing funnel. 

Don’t get impressed by the numbers, make sure you find newsletters that your audience follows or that have a similar audience. It doesn’t matter how good of a tractor salesman you are if you’re selling to the American Dental Association.

How to do it:

  • Utilize analytics tools to outline your audience’s characteristics, such as demographics, interests, and online behaviors. This profile will help you identify newsletters and email lists with similar audience profiles.
  • Use platforms like Substack, Revue, or specialized directories in your field to find newsletters. Subscribe and read their content to make sure it aligns with your brand’s message and audience’s interests. The closer the alignment, the greater the chance for successful integration into your marketing efforts.
  • Look at the newsletter’s growth trends. Past subscriber growth rates and engagement patterns can give you a sense of the list’s future potential and how it might support your business goals.

Don’t get impressed by the numbers, make sure you find newsletters that your audience follows or that have a similar audience. It doesn’t matter how good of a tractor salesman you are if you’re selling to the American Dental Association.

Step 3: Bring it all together and finalize the list

Now it’s time to bring together all of the insights and data you’ve gathered through each step of the acquisition process. At this stage, you’re looking at how these digital assets interconnect to add value to your business. 

If you do it right, you should have a solid list of potential assets you could acquire. 

How to do it:

  • Combine your insights from assessing financial readiness, SEO rankings, first-party data, and audience analysis. Look for synergies that could amplify your business’s strengths and fill in gaps.
  • Once you’ve identified the assets you’re interested in, find the contact info for the owners and build an outreach campaign. This will help you find out who’s interested in selling and what their price is. You can also work through intermediaries like brokers who specialize in digital asset transactions. 
  • Once you’ve found out what assets are available to you, outline how you’ll integrate those assets financially into your business. Consider the initial acquisition costs, ongoing operational expenses, and potential revenue streams the asset will generate. 
  • Identify potential risks associated with the acquisitions, including integration challenges, market competition, and data privacy concerns. Write them down and write down strategies to mitigate these risks, which would protect the long-term success of the acquisition.
  • Make a decision and move forward. 

The risk and reward of digital assets

Spending the kind of money that it takes to acquire a digital asset can be intimidating. If you don’t do your due diligence, you could be buying a pile of vanity metrics, and nothing more. But when you’re armed with a strong strategy, do your homework, and focus on value that’ll pay off in the long run, it can take your business to the next level.

There are no guarantees in life, and acquiring businesses and large assets isn’t for everyone. But if it is for you, the right acquisition can shoot your company straight to the top of the market.

  • Nick Eubanks

    Nick is a multi-faceted serial entrepreneur with exits ranging from agency's and ecommerce companies to software and content websites. He currently owns a small portfolio of digital assets and is the VP of Owned Media at Semrush, Inc, a publicly traded SaaS company, where he manages the acquisition and growth of a larger portfolio of owned media assets ranging from publishers and apps to newsletters and podcasts.

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