Facibus On Blogging

Riayn made an amazing comment on Lightening’s monetisation post:

I can’t answer your exact questions because like you my blog does not have advertising, but since I work in online advertising I can give you a view of the industry.

Online advertising is really geared towards the advertiser, they are the big winners here. The publishers (ie you) really lose out in monetary terms. Most advertising for blogs and small publishers work on a pay per click or CPC basis. This is because whilst a large number of viewers will see the ad, a very small number will click on them - the industry standard is 0.05%. Therefore, for roughly 5 million impressions, there will be about 3,500 clicks. The advertiser still gets eyes on their ads, but don’t have to pay out as much as they would if they were paying per thousand impressions (CPM).

The industry is now moving towards paying per sale or CPA. This means you (the publisher) does not get paid unless someone who clicks on the ad shown on your site goes ahead and either makes a sale, signs up for a credit card or registers an expression of interest.

Back to my example, an ad which will register 5 million impressions and 3,500 clicks will only register about 50 acquisitions (sales, signups etc). The advertiser will only pay the publisher for those 50 sales.

It is a very poor way to make money especially for a blog that has a small readership. The big blogs do make some money from it because they are generating tens of thousands if not millions of views per day.

For those of us who are not A list bloggers, we might earn just enough to cover hosting costs and that’s about it.

Wow.

So , the question arises: is there money in advertising for we prebloggers (would-be probloggers who haven’t quite made it yet)? If you search technorati on advertising on blogs you’ll get more than 33,000 results - it is a popular topic. What follows is not a comprehensive guide to advertising for bloggers - but it does look at some of the alternatives.

Isn’t Google Adsense wonderful?
Possibly not. A lot of people dislike CPC (cost per click) advertising programs. While Google Adsense does do CPM (cost per thousand pageviews) advertising, their main claim to fame is virtually cornering the CPC market. But the public’s love affair with Google is slowly dying - they have screwed over non-US/Canadian/Japanese referrers and some people have left Google behind altogether.

The CPA (cost per sale) or affiliate advertising run by the likes of Commission Junction is worth trying for bloggers in some niches. I’ve looked at Commission Junction in the past and found it to be fairly US/UK centric - I do have some US/UK readers but the majority are Australian, and targeting ads to overseas suppliers is not ideal. There is a local variant - Commission Monster has an Australian program. I can’t recommend them personally - their application form doesn’t acknowledge the State/Territory I live in (ACT) and it took them 5 days to respond to an enquiry about the application process the first time. I put in my application a week and a half ago and I’m not confident of any response.

So, if Adsense and other centralised CPC/CPM/CPA advertising doesn’t really work for us, what does?
Leo Babauta from ZenHabits credits concentrating on advertising as one of the factors that allowed him to go pro. He manages his own ads directly and will sell you a 125×125 ad at the moment at $1 per CPM (thousand impressions) - see his ad page for details. Selling ads at a fixed rate per CPM is good value for Leo - he gets paid whether the advertiser gets a clickthrough or not, makes a sale or not. Applying Riayn’s hypothetical 5,000,000 pageviews a year to Leo’s blog at the stated rate would give him $20,000.00 from that source alone (multiplying 5,000,000 pageviews at $1.00 per thousand views by the four 125×125 ads on Leo’s blog) . This is definitely into small/home business territory.

Just on “advertise with us” pages - it is interesting to compare the advertise with us page at Problogger with Leo’s - Darren’s discusses the benefits of advertising with him (which look great, he has an astonishing readership) but no figures. There is also a thread devoted to advertise with us pages on the Aussie Bloggers Forum.

So what do we mere mortals with sub-four-figure-per-day readerships do?
Swollen Pickles recently discussed Scratchback Top Spots on the Aussie Bloggers Forum. Scratchback Top Spots is a do it yourself sidebar link ad widget - basically, people pay a small amount to be on the list, and as you get more money from other people the original ones move off. You can see it in action on Swollen Pickles’ blog.

Those of us who don’t believe that Google is Satan can pretend that we’re pros by having Adsense ads. While it doesn’t make much money, the ads are there. I can see where Darren Rowse and other big names are coming from when they bag Google (because it is costing them real money) - for me, a few cents here and there don’t mean a lot.

And while it isn’t about the money, there is always Entrecard. Entrecard has given amateur blog promoters like myself a hobby - and if nothing else, it has widened my readership over at On Blogging Australia.

The Answer
I’m not sure that there is a definitive answer to this one even for me alone. I run ads because it amuses me rather than any great income earning potential. There have been times when I could have used the money in recent months. If I was getting thousands of pageviews a day I would take a more active interest in which was the best deal for my particular circumstances (niche/target audience location/my location/my readership size).  Until then, I will continue to play.

I have a lot of ideas for new blogs - an average of probably three a week.

What I’ve been doing for the last couple of months is buying domain names for the best of them and setting up blogs. I know this sounds nuts. Conventional wisdom has it that you should have one or two blogs at the most and work them until you are rich, famous or both.

The method to the madness is this (and it may yet prove to be madness!): there are people out there who buy under-developed blogs with good domain names and do great things with them. I want to spend $6.95 on a domain name, set up a blog, write a few posts, and sit on the domain name for a couple of years, then sell this unique fixer-upper opportunity to a blog renovator for more than I paid for it. If I market it correctly, maybe a lot more than I paid for it. At the rate that blogworthy domain names are being snapped up, this kind of active domaining could be worth thinking about.

Naturally, I’ve set up another blog (The Blog Collector) to track the progress of this experiment - I’m being open about what names I’m buying and why, which seems to be uncommon in the domaining world (and there are reasons for this, I guess).

Yaro Starak just sent his Blog Mastermind mentoring students a link to pass on to friends - a videocast sneak peek into the mentoring program. I’ve just watched it, and it reinforced my view that that I’m doing the right thing. My solemn promise - if it ceases to be that way, I’ll tell you.

If you’re interested in making money from blogs, have a look at Paula’s list of blogger salaries. Steve Pavlina (USD365,000 per annum), Australia’s own Darren Rowse (estimates between USD120,000 and USD1,200,000 per annum) and Yaro Starak (USD78,594 per annum) feature prominently. I’m glad that I have them in my Top 5 blogging gurus list and on my blogroll.

What I find inspiring, apart from the number of zeroes, is that there is a lot of open and agreeable commenting at the bottom of the post. Some of the people who didn’t make the initial list have volunteered information, and there is a lot of discussion on relative benefits of different blogging platforms.