10 comments

• 

  Louis Gray

  1 year ago

  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.
  reply
• 

  webomatica

  1 year ago

  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.
  reply
• 

  mathewi

  1 year ago

  Excellent points as usual, Jason.
  reply
• 

  rodaniel

  1 year ago

  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.
  reply
• 

  webomatica

  1 year ago

  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.
  reply
• 

  rodaniel

  1 year ago

  ...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.
  reply
• 

  papa

  1 year ago

  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.
  reply
• 

  webomatica

  1 year ago

  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.
  reply
• 

  papa

  1 year ago

  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!
  reply
• 

  1001noisycameras

  1 year ago

  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!
  reply