There are so many things which are required if you want to be a successful businessman. Strategies, proper planning, and execution are the fundamentals if you’re going to run your business smoothly. You must decide beforehand on your digital plan for a year. Your professional team must be able to observe every corner of your strategy to accomplish your goals for the year. What is your business or website worth, this question can only be answered by the precautionary measures you take during the strategies and planning? You have to understand what digital assets are giving you the best run and where your return of investment (ROI) is standing.
Your proper understanding of your digital assets and how they generate revenue can help you to decide during the crucial times as well.
As we all know, most of the companies today have their websites and digital assets in their flourishing business, but they do not know the actual value of their business empire. So, to know, what is the worth of your website (ROI) is a particularly important perspective.
According to the marketing survey, there is an approximately 50% increase in digital marketing budget as compared to the last year, and it shows the importance of digital assets like social media, content, SEO, video, and many more.
So, in my view, every businessman must be aware of the value of their assets and should know the real value of your digital assets and see how it makes a difference in your ROI so that you could know where one should invest.
So, now you know very well how important your digital assets to your business. You are spending your time, money, and efforts to develop the best website for the best user experience and simultaneously spending a lot on the best content as well. Besides the traffic they bring to your business, do you know how much they value your business in terms of money?
Get The Value Of Your Digital Assets: ROI
To have a better understanding of their value in terms of money, it is essential to know what a digital asset means.
Theresa Regli, a digital asset industry expert, has defined digital assets as anything represented in digital form that has intrinsic or acquired value. Your digital assets can be classified into the following:
- Media files.
- Images & graphics.
- Blog posts
These digital assets are also called intangible assets because they are not physical. According to IAS 38, an intangible asset is an identifiable non-monetary asset without any physical substance. An asset is something that is controlled by the entity and from which future economic benefits are expected.
Every country has its style of representing these digital assets. The AASB-138, in Australia, considers these intangible assets like software, lists, or marketing rights.
Now, to understand the real value of your digital assets, it is essential to look at it from a different perspective by going beyond how much it costs. How much energy and time spent to create it? How many people were involved? If you were to recreate it, how difficult it would be.
ROI: Any Website is an Intangible Asset
You are known to the world by your website. Your website is a showpiece to understand what your business is, what your product is, and what services you provide and most important what you have accomplished through it. It is your top lead-generation tool to connect with the customers.
The website’s value is based on your brand, the number of leads it generates, and your engagements with the new and existing clients.
To know how much your website costs, one needs to consider the following points:
- The total expenditure for the site in every way.
- Its significance to the business.
- The expected life of the website in generating revenue.
The AASB-138 says that quoted market prices in an active market are the most reliable estimate to know the value of your intangible assets such as your website. If you are developing your website, it is still an intangible asset if it complies with the general requirements described in AASB-138.21 for recognition.
The requirement to showcase the website’s ability to generate future economic benefits from promoting the product and services like generating direct revenue from order placement on the site.
With this demonstration, all the internal expenditures that occur in developing and operating the website will be accounted, according to the principles of AASB-138.
It states you can either
- Apply multiples reflecting current market transactions to know the profitability of the asset (such as revenue, market shares, and operating profit).
- Discount estimated future net cash flows from the asset.
It is important to note down that GAAP considers the content created or acquired may be identified as a separate intangible asset. The expenses occurred during the creation, development, and operation of the website, won’t be considered as an asset; instead, it will be listed as website development expenditure.
ROI: The Website’s Appearance On The Balance Sheet
These intangible assets can be listed on a balance sheet if they are acquired assets and assets with an identifiable value. The accounting guidelines are outlined in GAAP as well.
If an intangible asset is developed internally, it would not appear on a company’s balance sheet. For example, take Apple’s logo as an intangible asset. As the logo is developed internally, it won’t have a price that can be used to assign fair market value, and it would be different had the logo been part of the acquisition.
According to Investopedia, when intangible assets do have an identifiable value, they can appear on a company’s balance sheet as long-term assets, valued according to their purchase prices and amortization schedules. This is the one way to calculate the accounting value of your website besides there are other ways to do this as well. If you want to have any professional advice on your intangible assets, talk to your accountant.
The Calculators To Know The Exact Website Value
The website value calculator calculates and gives you a rough estimation of your website’s value with characteristics and factors.
It is an estimation of the potential advertising revenue of your website per month if your site uses ads and other programs to generate revenue. The businesses who have monetized their website are generating revenue. Google AdSense can help you in monetizing your website with many offers.
- The estimation of page views per month.
- Alexa is a global ranking system that uses web traffic data to make a list of the most popular websites.
There are other sites too that consider the total worth of the website (ROI) based on the following points:
- The age and inbound links are the life of the website. The older the site, the good it is because a good amount of back-links is associated with the older websites and become more authoritative.
- The website’s domain name influences SEO, marketing, and brand competitiveness. With a great domain name like amazon.com, you are sure to profit more in the value chain.
- The more the page views and visitors will make your business more valuable.
- The valuable content is very significant because only through this, you are ranked higher in search engines.
It is vital to mention here that website value calculators online are only based on estimations of your website’s potential and are not 100% accurate.
At last, these different estimations and valuations for your website and digital assets help you to get a better decision where you need to pay the attention.