Comments on: Most Bloggers Don’t Deserve Ad Revenue: What About Startups?

By: From the Pipeline - 4.18.08 — Shooting at Bubbles

From the Pipeline - 4.18.08 — Shooting at Bubbles — Tue, 02 Jun 2009 06:50:54 +0000

[...] Most Bloggers Don’t Deserve Ad Revenue: What About Startups? :: webomatica – Jason suggests that rather than bloggers not deserving to earn ad revenues it is the majority of start-up that better fit the idea. [...]

By: Business » Most Bloggers Don’t Deserve Ad Revenue: What About Startups?

Business » Most Bloggers Don’t Deserve Ad Revenue: What About Startups? — Sat, 19 Apr 2008 07:03:13 +0000

[...] SMB Big Picture wrote an interesting post today on Most Bloggers Donâ??t Deserve Ad Revenue: What About Startups?Here’s a quick excerpt Louis Gray writes a good post concerning blogger’s desire to make a profit from their blog, calling this basic desire “shocking.” He points out the hard truth: most bloggers don’t make any money because they add nothing unique to the blogosphere. If they get “pennies” for all their hard work, that’s exactly what they deserve. Personally, I have no delusions that blogging will ever make enough money to replace my “day job.” But it does make this hobby self-sustaining and then some. The amount i [...]

By: WinExtra » From the Pipeline - 4.18.08

WinExtra » From the Pipeline - 4.18.08 — Sat, 19 Apr 2008 03:43:10 +0000

By: 1001noisycameras

1001noisycameras — Sat, 19 Apr 2008 03:31:13 +0000

In a way, one should think of a blog in financial terms as a nano-startup (pre-IPO). A very small number of people may be lucky and make it big right away, but I think being patient and doing it “the right way” increases the chances of succe$$ for the majority of bloggers.

Obviously with blogging the range of profits/losses is nowhere near as wild as with a start-up, thus the term “nano”

But as pointed out above in detail, the financial risk with frugal blogging can be minimized, while the potential has no theoretical limit, but it certainly has a reality-check limit!

By: TechWinter

TechWinter — Fri, 18 Apr 2008 22:35:04 +0000

Bloggers – Are you making money?…

Ever heard of Louise Gray? Well he just told 40-50% of my readers they should focus on their day job and forget about the blogging
I had not even noticed his existence and until recently but today on Techmeme I saw his post “Most Bloggers Don……

By: papa

papa — Fri, 18 Apr 2008 21:59:06 +0000

I think the danger though with the funding approach is that with a lot of cash in the bank, the well-funded startup might be a little complacent on attending to the revenue model (while they ramp up traffic/usage and the product). And it's never to early to start planning for what to do once those funds run out

I think for these companies the same rule holds true: test and refine that revenue model!

By: webomatica

webomatica — Fri, 18 Apr 2008 21:41:04 +0000

Sounds good to me. Thanks for the input. I think a big thing that stands out
from your comment is “if your costs are low.” Definitely more difficult to
do once you take a ton of funding and the VCs expect big bucks in return -
which I know Fanpop has eschewed – unless something is different since last
we talked

In that situation – when the startup has borrowed millions and is relying on
ads – that's the sort of stressful situation I had in mind.

As for the blogger's end, most of us are just one person with ridiculously
low costs to keep the site running. So I nearly think it's a no brainer to
put a few ads up. The barrier to profitabiliy is so very low.

By: TechWinter

TechWinter — Fri, 18 Apr 2008 21:35:04 +0000

Bloggers – Are you making money?…

By: papa

papa — Fri, 18 Apr 2008 21:16:30 +0000

Hey Jase, I think this is an interesting topic. As a startup that relies on advertising revenue I'll throw a few considerations into the mix:

1. Advertising is a reasonable business model for certain businesses. It certainly won't work for all web 2.0 startups. Any startup that doesn't first research their space and try to understand what it will take to make an ad-based revenue model work is doomed.

2. Regardless of the business model, I'm a big proponent of "testing" and "iterating" the business model early and often. Too many startups create a product, launch it and figure they'll worry about the revenue later. Sure this works for the companies hit the grand slam (like Youtube). But there's only one Youtube. It makes a lot more sense to also start working on and refining your revenue model when launch your beta. I've been amazed at how much we've learned at Fanpop from 2 years of advertising on our site. Our site's advertising "evolution" has run parallel with the site's product/feature-set evolution.

3. Figure out the inflow/outflow equation. If you make low revenues, you can still survive if your costs are low. It's obvious but we've all seen a LOT of companies that have huge burn rates and are unable to get revenues high enough to sustain their overhead. You've got a tough choice to make here, go with the high burn rate and hope you don't go supernova, or shoot for slower, sustainable growth (it won't take you from 0-10,000 employees in a year, but it's more realistic).

4. Understand the CPC, CPM, CPA models and determine the scale necessary to achieve sustainable revenue with the traffic you have (or project you'll have). This is an important one. I see a lot of companies thinking they'll be getting the $50+ cpms that premium sites like the Wall Street Journal can charge. Remember that if you're going with AdSense you can probably expect a much lower effective CPM on your CPC ads (sub $1).

5. AdSense is not the end all be all. I think there are a lot of folks who think that AdSense is all they need. It might be for the "melisthemeoma" bloggers, but for the rest of us you'll need to look to some of the higher tier branded/display ad network and even some of the rep firms to start garnering those higher cpms and big ad spends.

6. Invest in advertising. You can't run an ad-dependent website without investing time, energy and money on advertising services and technology. If you're large enough, hire a sales person. People within the company should work on refining different programs and pitches and should target advertisers within their space. If you can lock in a specific advertiser or agency and provide them with a great campaign you may be in store for repeat business. Direct ad deals = higher cpms and potential repeat spends.

So in the end, I'd say I agree with you. A reality check is definitely needed. A lot of hard work, research, and failures are needed before a site can hit on that formula that will generate some revenue profitability. It's possible, but it's not a given and all the pieces have to come together.

By: webomatica

webomatica — Fri, 18 Apr 2008 20:37:03 +0000

Yep I'm semi-aware of the whole SEO-Google PageRank-Monetize-Link nutty
bloggers. Which raises another related point – there must surely be some
money in blogging otherwise all these people wouldn't exist.

By: rodaniel

rodaniel — Fri, 18 Apr 2008 19:26:24 +0000

…and I'm continually dismayed at the number of these “pro” bloggers who're like 13-15 years old! And these little snots are whipping the pants off of me in every metric measured – page rank, Alexa score, etc. Of course, I have to wonder how many of the clicks they get ever convert into loyal readers or subscribers. I don't get (comparably) a bunch of traffic on my site, but it's all for the content and it's largely repeat visitors.

By: rodaniel

rodaniel — Fri, 18 Apr 2008 19:23:23 +0000

You're certainly not in this category, Jason, but this brings to mind the countless “pro” bloggers I see on the various forums, all vying for every scrap the can get and being totally focused on income. It's those guys that really make me sick – the bloggers who've gotten into this purely as a means of making money and have little or nothing to contribute. These guys will spend hours & hours tweaking on their SEO efforts, yet their content is typically poor at best and they can't even be bothered to attempt decent spelling or grammar. By & large, those type of money-grubbing bloggers are really a disgraceful lot.

By: mathewi

mathewi — Fri, 18 Apr 2008 19:03:00 +0000

Excellent points as usual, Jason.

By: webomatica

webomatica — Fri, 18 Apr 2008 18:06:02 +0000

Thanks. I hope I haven't come across to you as a blogger that thinks they
“deserve” ad revenue.
Meanwhile, you may have inspired this week's bitchmeme.

By: Louis Gray

Louis Gray — Fri, 18 Apr 2008 17:54:35 +0000

Jason, great job with this response. You know I agree here (again the caveat of most applies). One of the amusing points of leaving a headline that says “most” is that many bloggers can say that they are the exception.