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Sep 24, 2008

I Guess I'm Doing Something Wrong from A VC

Technorati says in their annual State Of The Blogosphere that:

The majority of bloggers we surveyed currently have advertising on their blogs. Among those with advertising, the mean annual investment in their blog is $1,800, but it’s paying off. The mean annual revenue is $6,000 with $75K+ in revenue for those with 100,000 or more unique visitors per month.

Erick Schonfeld of TechCrunch was a bit mystified at that $75k number:

The $6,000 a year I can believe. The $75,000 figure is harder to swallow, especially with only 100,000 visitors a month. But directionally there is no doubt that blogs are bringing in more cash.

I'm a bit mystified at that number too. I've had about 150k visitors per month for several years now. My audience is stable but flat. I get about 100k visitors per month on my website and another 50k via my feed. At best, this blog brings in about $30k per year, all of which I give to charity.

And I use two of the better monetization services out there for bloggers, Federated Media and FeedBurner. I used to use adsense but I took it off this blog (except for default).

I don't doubt that there are bloggers with similar sized audiences who do make $75k per year because they work it a lot harder than I do, but I also think that Technorati's survey results are wrong.

The reason I am writing about this is that there's a big difference between $30k per year which is very hard to make a living on no matter where you live and $75k per year which could replace a full-time job in many parts of the country.

Getting to 150k visitors per month and keeping them is not easy, but there are hundreds and possibly thousands of bloggers who do that these days. It would be wonderful if blogging could cover their nut and make them self sufficient.

I just don't think we are there yet. We should be and we will be. But not yet.

Federated Media is doing a great job for you, turning an estimated $20 eCPM. Other high traffic blogs flood their pages with ads to earn similar eCPM, but at the cost of low ROI to the advertiser. The Long Tail earns less than $1.00 eCPM. (See New Economics of Advertising for 900 pages of collected research.)

I agree that $75k per year would start another renaissance of content on the Internet. It's green, rich media, and connects communities. 

100k unique users make no sense. Most real communities have less than 50,000 total population. This also applies to most B2B markets. For vertical communities, 100 million UU might be needed to sustain long term viability. 100k is a no-man's land. 

Small business advertisers mostly target 50,000; not millions.

The big picture is that we need thousands of communities with 50k UU, 10 pages per month, $50 eCPM net to the publisher. That's $25k per month - enough for salaries, investment in rich media content, and interactive features.

At tEarn, we're beta testing with 50 local newspapers and niche publishers to realize this goal. It's time to stop inflating hits for size sake. It's time for change to segment into real, sustainable communities - tens of thousands of what we call microchannels.

1 comment:

  1. You're not doing anything wrong. It's just a math issue.

    It's saying that the mean revenue for those with 100,000 OR MORE impressions/month is $75k/year....NOT that the average revenue is $75k for a blog that has 100,000 impressions/month. Two very different stats.

    I have NO CLUE, but from a math perspective I'd imagine it breaks down something like this:

    100k/month ~ $25k/year (lots of people)
    250k/month ~ $55k/year (quite a few)
    500k/monty ~ $120k/year (not so many)
    1000k/month ~ $240k/year (under 50)
    2000k/month ~ $480k/year (5-10)

    Now, when you average just this group of "100k+/month", you'd probably get something like $75k/year....but there is still a significant group of people at the end of that particular long tail who are making $25k and "mystified" by the statistic that technorati chose to use to promote its industry.

    The bench players in the NBA should not be mystified that they are being paid significantly lower than the mean salary for NBA players, but significantly more than basketball players in general.


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