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How large is the market of wordpress themes, and how do theme providers market their themes?
OVERVIEW
Hello! Thanks for your question about the valuation of the WordPress theme market and their methods of marketing. The short version is that there is limited statistics available regarding the exact size of the WordPress theme market. One source notes the WordPress has an approximate market value of about $50 million. A primary component of successfully marketing a WordPress theme is an effective landing page. Below, you will find a deep dive of my findings.
METHODOLOGY
There is very limited information available concerning the size of the current WordPress market. One source notes a "rough estimate" of $50 million; however, there is no evidence stating how this figure was estimated. Through an extensive search of trusted media sites, we were able to find enough information to triangulate a supporting estimate of this figure using site traffic and revenue data for ThemeForest, currently the largest theme marketplace. We determined ThemeForest to be the largest marketplace based on its leading position with regards to site traffic. This assumption was also supported by industry blogs, including MotoPress and WPMU DEV. All calculations are explained below.
MARKET SIZE
According to a recent article, about 25% of new websites are currently hosted through WordPress. The WordPress theme market size is currently at an all-time high of about $50 million in annual revenue. While there is no evidence to suggest how this figure was calculated, we were able to utilize back-of-the-envelope calculations to support this estimate, as described below.
As stated above, ThemeForest has been identified as the largest WordPress theme marketplace. ThemeForest has an average of 31.7 million site visits per month. The remaining 9 of the top 10 sites (from a pre-compiled list using the highest figures for each site) have a combined monthly site visit total of 12.3 million. From this information, we can determine that the market attracts a total of 44 million visitors each month (31.7 million + 12.3 million), and ThemeForest's share of this market is 72% (31.7 million / 44 million).
From 2008 to 2016, ThemeForest processed $286,355,625 in revenue from WordPress themes. This indicates an average annual revenue of $35,794,453 (286,355,625 / 8). Since ThemeForest accounts for 72% of the market, the total market size would be $49,714,518 (35,794,453 / 72%). This calculation supports the assertion that the market size for WordPress themes is approximately $50 million.
With its large market presence, it is safe to assume the WordPress theme marketplace is rather stable with no signs of dissipation. In fact, one estimated valuation of ThemeForest's 2017 revenue, based on average monthly sales and history, is $138,600,378. Using the figure of 72% from above, we can determine that the total market for WordPress themes is likely to reach $192,500,525 this year (138,600,378 / 72%).
MARKETING & MONETIZATION TACTICS
In terms of monetization of a theme, the landing page seems to be the most important aspect of a theme's marketing plan. There are a vast number of successful marketplaces, and it is noted that these marketplaces are very crowded and it may take years for a new theme to generate market traction. This overcrowding is supporting evidence of the importance of the landing page. According to WP Expert, smart landing pages can be achieved through the AIDA customer behavior model: Awareness, Interest, Desire, and Action. Landing pages must gain the customer's attention and clearly identify the problem it solves. Images should also be creative and professional in appearance. A demo of the theme could be beneficial in increasing conversion rates, as well.
Upon completion of a quality landing page, marketing efforts are best directed at content creation. This content exposure should cover many media channel, such as blog posts, YouTube videos, social media, forum participation, and even PPC campaigns such as AdWords. Other important marketing tactics may include online networking, as well as free and/or paid guest posting. Joining forums and groups associated with your theme can help in building a network of followers that can be beneficial in promoting your product. With regards to guest posting, free posts are great for niche resources, while paid posts are designed more for a full-scale review of the theme. SEO optimization can partly be achieved through adding relevant hashtags to posts, linking the website to all social media profiles, and following others and sharing information regarding your product.
Furthermore, it is important to have something that draws a customer in. For example, offering a free, or "lite" version with less functionality (fewer widgets, web fonts, or layout options) can provide customers with an overview of the product, resulting in the desire for the unlimited, paid version. Also, because a large portion of the WordPress community is based on open source, or free, themes and plugins, it could be useful to provide something for free to lure customers to your product. Examples of this could include freemium products, as mentioned above, or offering a free product with paid add-ons or advertisements for your paid products.
THEMES VS PLUGINS
Much of the WordPress community is migrating to the use of plugins over themes. Despite this, the market size for themes remains much larger than that for plugins. Evanto, the company that owns ThemeForest, also owns CodeCanyon, one of the leading WordPress plugin marketplaces. According to recent data, WordPress themes have grossed a total revenue of $286,355,625, while WordPress plugins have grossed a total revenue of $53,906,191. Annual recurring revenue is also higher for ThemeForest at $138,600,378, as compared to CodeCanyon ($18,658,758). ThemeForest also outperforms CodeCanyon in percentage of items sold, new items added, and inventory.
Despite the increase revenue potential for themes over plugins, one advantage of plugins is the ability to retain customers. The average website design has a life cycle of 2-4 years. In theory, theme developers cannot sell additional products to these customers during this time. Plugin developers, on the other hand, can create additional plugins and add-ons, upselling the the same customers repeatedly, which can help to enhance revenue opportunities.
CONCLUSION
To wrap it up, the WordPress themes market size is approximately $50 million, and is estimated via back-of-the-envelope calculations to reach approximately $192 million. Due to market saturation, critical marketing strategies are necessary for theme developers to sell their products. Such strategies include the creation of an engaging landing page, online networking, guest posting, use of a product to draw customers, and SEO optimization. A further comparison of themes and plugins reveal themes have the greater revenue potential, but developers lack the ability to create and up-sell additional products to retain customers.
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