Website valuation often comes way down the list of priorities for companies. Business owners assume that only entrepreneurs building internet businesses for sale need to be focussed on website valuation.

When you consider the fact that a website is like a virtual business site, with its own marketing channels, income streams, content and design collateral, understanding its worth is as important as valuing any other asset in your business.

So how do you measure the worth of your website?

Accurate website valuation needs to take into account several factors. iQuantum has developed a range of ways to measure the value of client’s sites:

• Replacement cost – what would it cost to build the same asset with current technology? Online technology prices come down quickly. This can be a surprise to many clients and has a significant impact on the real value of your website.
• Website assets – [Content, Getting Found, Community] how much traffic does the site generate from natural search? How big is your list – including email, Twitter, newsletter, Facebook fans, digital products (video, software, eBooks)? The internet allows you to have a very broad database. How recently have you calculated the lifetime value of your existing customers, online and offline?
• Online Performance – what is your conversion rate? This needs to take into account product sales, leads generated, downloads (squeeze pages), newsletter open rate, forwards – all the ways in which you set and measure conversion goals.

Other valuation methods may include:

• Net profits of website
• Inventory and assets of website, including graphics, scripts, apps, images etc

iQuantum employs a unique traffic valuation methodology that means we can benchmark your site against the competition with an indicative advertising value.

You may be surprised at the difference a thorough website valuation and comparison can make to your business. Not only does it help you gauge the current worth of your website, it is a crucial piece of knowledge that helps you set and re-align targets.

How often should you update your website?

Once you know the worth of your website (and have regular website valuation factored into your business plan), you can analyse the cost effectiveness of updating. Many successful businesses conduct major overhauls of their websites every 18 months to 2 years.

It’s important to keep up with the dynamic nature of the internet, taking into account online trends, industry specific developments and search engine requirements. But costly upgrades are only worthwhile if you can accurately measure your return on investment.

For some companies, investing more time in social media will bring a better return than updating their website design. It always comes back to the specific goals of each business.

Site value should be one of the metrics used when setting targets for the ROI on your website.