Viral Quiz Sites and Click Arbitrage in Display Advertising

The funny thing about business models is that usually the ones that people complain about and hate the most are the ones that actually work.

And one of the best ways to discover new, working business models is to look no further than your Facebook news feed and see what people share.

For the longest time it was those “You’ll never believe what happened next” headlines (which were semi-banned by Facebook back in August).

But lately I’ve noticed more and more people sharing these cheesy quiz results.

Stuff like…

quiz-facebook-screenshot

Now, quiz sites are nothing new. Viral trends (like fashion) tend to recycle themselves every couple years.

Now, most marketers scoff at these sites. They call them “shady”, a waste of time (they are), and claim that it’s not a serious business model. But trust me when I tell you that there are a few serious companies that are doing doing 6-7 figures in revenue a year with these viral quiz/content sites.

Read on to see exactly how these sites work, plus an inside look at how the most popular quiz site out there is currently making money.

The Key: Dirt Cheap Clicks

The way that most of these viral content websites make money is through click arbitrage.

Click arbitrage is when an advertiser buys cheap traffic from one source, strategically places ads on their site, and makes more in ad revenue per visitor than the initial cost to get the visitor to their site.

Example: It costs an average of $0.15 to get one person to your website. This person shows up to your site, takes a quiz/consumes your content and clicks on an ad you’ve placed in your sidebar. You make an average of $0.20 every time someone clicks an ad.

$0.20 (ad revenue) – $0.15 (cost of the traffic) = $0.05 in profit.

A pretty small margin, right? However, imagine if you get millions of visitors per month. That $0.05/visitor will add up.

Now, this method is a perfectly fine way of doing things. You’ll do really well once you’ve optimized your ad placements and found a few good sources of cheap traffic.

However, the key to scaling your site is moving away from paid traffic, getting your content to go viral and getting tons of free traffic that clicks your ads.

However, to do that, you must first “plant the seeds” with paid advertising.

Planting Seeds to Grow Your Viral Content

The way that many beginner marketers and website designers try to make ad revenue is…

1. Create content
2. “SEO Optimize” it and hope people find it on Google.
3. Share it with their friends on Facebook
4. Hope and pray

This can work, but it’s a crapshoot.

97% of the time, if you build it… they will NOT come. Relying initially on organic traffic is a long, hard slog that often leads nowhere.

Plus, there’s nothing more depressing then spending 8 hours writing a blog post only to log-in to Google Analytics and see this:

no-visitors

The best way to get people to see your content is to pay for them to see it, at least at first. Getting guaranteed eyeballs on your site exponentially increases the chances of people sharing your content.

Here’s one way a lot of quiz sites do it:

They seed their quizzes with Facebook Ads or traffic from another cheap source. What I mean by “seed” is that they buy enough traffic to get enough people to take your quiz so they:

a) Make enough off of the initial arbitrage to continue
b) The initial traffic shares the quiz, the quiz goes viral, and they can now move on to sending traffic to another quiz.
c) Grow their audience on Facebook and get organic traffic from people clicking their stories in the news feed.

Using Facebook to Seed Your Quizzes

Facebook is a good network to start with for two reasons:

1. It’s (comparatively) cheap
2. It’s easy target demographics that will be interested in your quiz.

Example: Your quiz is, “Which classic WWF wrestler are you?”.

With Facebook Ads you can target target men in their 30s and 40s who are interested in things like “WWF”, “Hulk Hogan”, “Macho Man Randy Savage”, etc.

quiz-fb-ads

Just by putting a few basic interests in you now have a potential reach of 540,000 people who were probably fans of wrestling when they were kids.

And guess what?

Their friends likely fall into the same demographic and would be interested in the quiz as well.

All it really takes is for one of these quizzes to go viral and all of a sudden you’ve got a good amount of free traffic coming to your site, clicking your ads and growing you revenue.

And besides Facebook, there’s another newer source of traffic that many of these viral sites use with a lot of success.

They’re called content discovery networks.

Buying Cheap Clicks On Content Discovery Networks

As mentioned earlier, the key to arbitrage is finding a source of cheap traffic.

Besides Facebook, the go-to networks for many viral sites are content discovery networks like Taboola, Outbrain, Yahoo Gemini, etc.

Content discovery networks show those “Around the Web” style ads that you see at the bottom of most major online newspapers and popular blogs. The ads are designed to look like recommended stories related to the content you’re reading.

These work really well for arbitrage because the clicks are relatively cheap. For example, Outbrain charges somewhere around $0.25–$0.35 per click. CPCs on networks like Google or Bing are going to run you at least $1 if not much, much more.

We’ll cover these networks more in-depth in a later post, but one reason these ads tend to be a bit cheaper is because many of these networks don’t allow advertisers to send traffic to a landing page meant to make a sale. They’re only allowed to link to content. There are even a few networks that have one rate (usually lower) for advertisers who want to send traffic to pure content and another rate (usually higher) for advertisers who want to send traffic to a sales page.

One example of a viral website testing various content discovery networks is LittleThings.com

littlethings-spend

Another example is ViralNova, a huge viral news site that was very popular on Facebook just a few months ago.

viralnova-spend

Notice how both of these websites rely heavily on these content discovery networks for their traffic. The reason why these networks work so well for viral websites is because the design of the ads and advertiser landing pages are in line with user expectation. When a user clicks an ad that appears to link to a piece of content (not a sales page) that’s exactly what they expect to see after they click. The ad networks and viral sites fulfill these expectations and give the user what they expect to see.

On the publisher side of things there is one viral quiz site that has become one of the most popular sites on Facebook and the internet in general.

Let’s take a look at Playbuzz.

From Unknown… To The #2 Most Shared Site on Facebook

playbuzz-logo

Playbuzz.com recently became not only the most popular viral quiz site, but one of the most popular sites on the internet in general.

Bloomberg BusinessWeek calls them “The Israeli Quiz Factory That’s Outbuzzing BuzzFeed on Facebook” and they’ve received over $3.8 million in venture capital. They were recently the second most shared website on Facebook (behind The Huffington Post) with over 7.5 million shares.

Playbuzz describes themselves as:

“…an open network for publishers, bloggers and brands to create and share playful content items such as quizzes, lists and polls.”

Let’s take a look at what they’re doing.

Which Ad Networks & Advertisers

Let’s take a look at which networks and advertisers Playbuzz uses to make their ad revenue:

playbuzz-adspend-network

You’ll notice that Google Adsense is their main stream of income. Not a huge surprise. Google Adsense has a great payout and brings in high-quality traffic through Google Adwords.

However, you’ll also notice that they’re also doing a good amount on “Direct Buys”.

This is Playbuzz selling traffic directly to large advertisers instead of ad networks. Large advertisers love direct buys because they’re guaranteed to get the most impressions possible based on the terms they worked out with that publisher, instead of varying traffic levels they get when they use ad networks and exchanges.

Who buys direct with Playbuzz?

Big brands.

Take a look:

playbuzz-direct-buy

This is the best thing that can happen to a publisher because large companies like Verizon have enormous ad budgets. Plus, their goal is usually not direct response. It’s to get as many eyeballs as possible on their ads, meaning big brands will typically pay higher CPM rates so they can get as much traffic as possible. Signing a contract for guaranteed revenue at a high CPM rate is any publisher’s dream.

Relying on ad revenue from ad networks (Google Adsense, Taboola, Chitika, etc.) can and does work for most publishers. The downside is that it varies from month to month. You don’t know how much revenue you’ll receive from a network each month OR (worst case scenario) they could change one of their policies and ban you from their network. One of the keys to building a lasting business is to have streams of predictable revenue. Publishers do this is by signing big brand advertisers to longer term, fixed CPM contracts.

That being said, it’s impossible to attract large advertisers when you’re just getting started. Premium advertisers want A LOT of traffic going to their site. Most won’t be interested until you’re getting at least a few million visitors a month.

But, when you know the right way to optimize your ad positions, the right way to seed your quizzes, and the right quizzes to create… anything can happen.

Creating Quizzes That Will Go Viral

Another key to creating viral content is discovering which specific types of quizzes are more conducive to going viral.

The easiest way to do this is to see which quizzes on other sites are make the most ad revenue for the publisher.

We looked at Playbuzz’s highest spending advertiser (Verizon) to see which exact pages on they buy the most traffic on.

playbuzz-verizon-top-placement-url

 

You can assume that when an advertiser is spending a large amount on a specific page that the content on that page receives a lot of traffic. In this case, the “Guess The TV Monster” quiz and “Which Movie Should Win Best Picture at the Oscars” quiz are likely getting the most traffic. If I were doing a site like this, I would create similar quizzes, seed some traffic and see what happens. My instinct is that they would probably do pretty well.

One Last Trick: The Godfather Baby

I “liked” Playbuzz’s page so I could analyze how they shared content and what kind of quizzes they consistently put out. One thing that stood out to me is that while 3/4 of their posts send traffic to their quizzes, the other 1/4 are funny pictures, news stories, or other content that the general public on Facebook tend to like.

Here’s one great example:

playbuzz-godfather-baby

This is a super smart and extremely easy way to get your posts in more people’s newsfeeds and make people love your content. People love these types of pictures. I mean… almost 4000 likes and 1200 shares for a picture of a baby. I’d love to know how many more visitors per month Playbuzz gets just from the people that share this type of content. This type of content may seem cheesy and “low-quality”… but the truth of the matter is that people love it.

Pros & Cons of Viral Quiz Sites

Pros

  • Easy to set-up — Nothing too technical necessary. Here’s another site that does quite well: Quizdoo. It’s just aBootstrap template combined with some content and simple graphics. Nothing Fancy.
  • People love quizzes — This model is less likely to be frowned upon by Facebook and other ad networks. The click bait headlines you used to see all the time (“You’ll never believe what happened next”) were banned because people complained. They were deceptive. A quiz is not deceptive.

Cons

  • Arbitrage is a tricky — You need a lot of traffic to make this work. It might take weeks, months or years until you start seeing real revenue. The real money comes when your quizzes go viral. Guess what? Your quizzes might never go viral.
  • Bad long-term business model — Viral sites are fads. They come and go all the time. There is no true value proposition which makes it difficult to stay profitable in the long run.
  • Your traffic side can go bad — Businesses like these often die due to changes in ad network policies. One day, you might be doing very well advertising with Facebook or another network. The next day they might decide they don’t like the user experience that your site provides and ban you from their network.
  • Your inventory side can go bad — Adsense and other networks also change their policies to weed out sites they consider to be low-quality.
  • Copycats — There are a lot of viral sites out there because they’re relatively easy to develop. Your site, like many others before it, is more likely to be forgotten than not.
  • Lots of time spent on content — You need to be consistently testing different types of quizzes until you find one that goes viral. This means you’ll need a bunch of writers, editors and people posting the content Playbuzz has a lot of user generated content, but that’s because they have a huge audience. Creating quizzes is not difficult, but it’s hard to scale.

Conclusion

The quiz model is very hot right now and easy to set-up. If you’ve got a few spare hours and a small-ish ad budget, you can get something set-up very quickly and start testing it.

About the author

Joseph Naylor

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