Internet Cash: The Business of Blogging

Internet Cash: Blogging – Part One

The Origins of Blogging and Blog-Based Advertising

The most traditional way of making money via blogging is through paid advertisements. Unlike a newspaper that sells individual adspace, bloggers usually sign up for a service like Google’s Adsense. Adsense analyzes each page or post of a blog and then matches the content with related advertisements from sponsors who sign up with their Adwords program (Adwords is for buying ads, Adsense is for selling them).

Of course, to make money off advertisements, you need a lot of traffic. And you also need people to click on the advertisements. In this post, we’ll use a case study to look at the origins of blogging and the fundamentals of selling ads on a blog.

Blogs are great. Especially this one. But they remain an enigma to some people.There are some blogs that have been around for years, with new content going up almost daily. Do you ever wonder, “How do those people make money off of that?” And, maybe even more importantly, “What is a blog, really?

Blogging started long before anybody knew what blogging was. Merriam-Webster still defines a blog as “a Web site that contains an online personal journal with reflections, comments, and often hyperlinks provided by the writer.” That was certainly the case when I first heard the term around the turn of the millennium. I was a teenager engaged in the Live Journal community at the time, and I remember scoffing at the idea that this new, frivolous sounding word applied to me in some way. “That won’t stick,” I said.

It did stick. And, contrary to what Merriam Webster thinks, blogging is no longer the undisputed territory of emotional teenagers speaking in cyber-tongues. The classification of blog is a wide umbrella encompassing websites and forums that seem to have very little in common, from companies writing about their corporate news and latest products to commentators and analysts commenting on and sharing the news.

For millions of people, blogging has become a source of news, a way to share information, a community, and a business.

A recent visit to Dane Carlson’s Business Opportunities Weblog revealed an interesting article, one that inspired this series. Today, I’d like to use this article as a case study as we begin chipping away at the topic of blogs and advertising money. Dane Carlson’s Business Opportunities Weblog mostly aggregates entrepreneur and small business stories from around the net, but the particular piece that interested me was an original post called “How I Accidentally Became a Professional Blogger in 2001.”

Carlson was dabbling in weblogging as early as 1997. A “weblog,” more commonly known today as, simply, blog, is defined by Carlson as consisting “of short links and editorial presented in reverse chronological order on a webpage, with the newest content at the top of the page and the content growing older as one scrolls down the page.”

Think of today’s bloggers as journalists without the degree or accountability. Self-published writers with free reign to cover any subject in any way they desire. For blogger Dane Carlson, it was “the perfect medium.”

“I setup my own personal blog in November 1997,” Carlson explains, “and proceeded to write about and link to all kinds of random topics. For the most part, though, I wrote about interesting business ideas and small businesses. I’ve always been enamored with hearing about how people started what sound like crazy businesses.”

He soon set up business-opportunities.biz where he posted links and information in a weblog format for people who were interested in business opportunities. And then, he moved on.

Time passed. Carlson continued doing webwork, building multiple sites, and doing some personal blogging. “All the while… www.business-opportunities.biz was still online, just sitting there, and still getting traffic.”

Then, in 2003, Google started its AdSense program.

AdSense is an advertising program by Google that allows webmasters to include a snippet of JavaScript code on their websites that will generate and display text advertising related to the content of the page. I’m sure you’ve seen AdSense everywhere… I didn’t have high hopes for the program, but I gave it a try and included the AdSense code on www.business-opportunities.biz on Thursday, June 19, 2003… Three days later, I logged into the AdSense reporting system to see how much money the system had generated. I was expecting that at most I’d have a dollar or two total for the few days that the ads had been running.

You can imagine my surprise when I saw that the first full day that ads had run I made $28.83 on 24 clicks! The second day netted $33! All of this from a website that had just been sitting there for a couple years! In two days I’d made back more than I’d spent paying for the domain registration for all those years… That first half-month, the site, which I still wasn’t updating, generated over $400 dollars.”

Now this was at the very beginning of Google’s AdSense program. As Carlson notes, more people were clicking on ads because they were new. It isn’t like today, where people’s eyes tend to get glassy the second they see anything resembling an ad on a webpage.

In early 2004, after experimenting with Google AdSense on other websites and not having the kind of luck I’d had on www.business-opportunities.biz I realized that it wasn’t just the blog format that was special about the site. It was the content. Advertising related to business opportunities and franchises were much more expensive, and therefore more profitable, than any of the other niches I explored. I should have figured this out myself since every newsstand is covered in magazines for business opportunity seekers, but I really had no idea what I was doing. I still wasn’t regularly updating the site, so I decided that it was time to start blogging on the site again since it was likely that the only direction that traffic and revenue could go was up. I took a backup of the old site before I started blogging again, just in case things went down. My plan was to revert to the backup if things went south.

Things didn’t go poorly, and it was at this point that I realized that I’d accidentally become a professional blogger. I started regular blogging on the site in February 2004 and have been at it ever since. Shortly after realizing that I was professional blogger, I imported all of the relevant posts from old personal blog into Dane Carlson’s Business Opportunities Weblog and turned off the old site. In those early days I had no idea what I was doing. I just blogged like I normally would, only more about business and less about other random topics. The checks kept arriving in my mailbox.

Since then, I’ve changed how I generate revenue so that I’m not dependent on Google AdSense anymore and have been able to quit my day job and work on the site full time. We now have three sons and I’ve been able to work from home for the entire lives of the second two. The website even built me a house way up in the mountains of Mariposa, California where we now live.

Blogging has changed a lot since the early days. Most people starting a blog don’t know the first thing about generating traffic or making money from ads. One lesson Carlson learned was that different topics can demand more money from advertisers. The world of “business opportunities” happens to be a highly competitive playing field. The more people vying for advertising space, the more the cost-per-click. See, most automated online advertising isn’t done at set rates. The cost that advertisers pay varies depending on how many people are vying for ads related to certain keywords. So even if you have a huge amount of traffic, if the topics you blog about don’t demand high Cost Per Click rates (CPC), than the money you make from advertising won’t be as high as topics that do.

How do you determine if your keywords have a high CPC? Well there’s no easy way. Okay. That’s a lie. There is an easy way that I’ve found, and that’s through using Google’s Adwords. As mentioned earlier, Adwords is Google’s service for buying advertisements on websites and search results pages. But within the Google Adwords control panel, you can type in a keyword or phrase and see how competitive it is, and what the CPC averages out at. Now that doesn’t mean you’ll be making all of that amount every time someone clicks on an ad on your site. Remember, Google takes a hefty cut. But even with a relatively small percentage, higher CPC keywords will get you a lot more money than keywords that have very few advertisers bidding for them. Here’s an article with a few additional suggestions on determining a keyword’s Cost Per Click.

From what I’ve found in my research, the general consensus seems to be that the better your ads blend in with your site, the higher the click rate. Let’s face it, few and far between are the times people knowingly click ads these days. Is it dishonest to make ads look like a part of your site? Well, ads are a part of your site. They’re the part that are making you money! Besides, if someone “accidentally” clicks an ad, that’s probably because the ad was for something that intrigued them or piqued their interest.

Everyone has to make a living, and nobody wants to pay for quality content anymore. So, while some people have a distaste for advertising, it is, as they say, a necessary evil.

But going from content to income is no easy task. In the next installment of the Internet Cash series, we’ll look at all of the hoops bloggers have to jump through just to get a check in the mail each month. It’s not enough to be a good writer anymore. If you want to turn blogging into a business, make no mistake: You’re gonna have to work for it.

Related Posts:

• Internet Cash: The Business of Blogging – Part II
• Internet Cash: The Drudge Report
• Building Customer Loyalty in a Digital Age
• Small Business V. Hackers
• 6 Tax Tips For Freelance Entrepreneurs

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