Not a day goes by that I don't see a story about making money on the Internet with a blog. It goes something like this:
Step 1: Start writing a blog
Step 2: Put some Google ads on it
Step 3: Sit back and start counting the money
This pitch isn't just limited to the spam that comes pouring into my in-box every day. It often comes from industry publications and reputable Marketing organizations.
But is it true? Is this a gold rush? eMarketer estimates that online ad spending will grow, even in this down economy, to an impressive $24.5 billion this year. That is a lot of dough, and surely some of it will go to the bloggers. But how much? Let's do some math.
Just to thumbnail sketch the landscape, there are well over 50 million unique sites and blogs out there that have some sort of measurable traffic... quadruple that number if you count the sites and blogs that have never seen a visitor. But for the sake of argument let's call it an even 50 million. What would happen if I could magically split the pot of $25 billion evenly among all sites? We would get $500 each.
It won't even pay your Comcast Internet bill.
But traffic on the Web is not divided evenly, and neither are the dollars. The top sites get more than their share. Take a look at the chart on the right for a peek at how traffic is divided up on the web. The Top 100K sites, which represent just a tiny fraction of all the sites on the web (less than .2%) get almost 75% of the traffic. And top sites have sales people who can make sales calls, take ad buyers out to lunch and put together fancy PowerPoint slides. Never underestimate the power of a good PowerPoint slide.
Those top sites are going to take the lion's share of that $25 billion.
Let's take a look at this from another angle. I read an estimate in eMarketer today that the average price for online advertising is currently $2.50 for a thousand impressions (called CPM in the industry parlance.) But that includes the premium prices that the Top Sites charge. What kind of prices do the smaller sites get for their advertising? Pubmatic can tell you in their Quarterly Ad Price Index. Pubmatic manages the advertising for thousands of sites, large and small, so they have some pretty good data. The answer is $.61.
That means that you will get paid 61 cents for every thousand page views on your blog. You can put 4 ads on your blog, bringing your take home to $2.50 per thousand, but beware because you may lose your readers if you overdo it. How many thousands of page views does your blog have per month?
Let's take one of the much touted success stories, The Daily Coyote. The Daily Coyote is a fine blog and the author, Shreve Stockton, takes beautiful photos and has a real passion for her topic. I checked a number of different sources for The Daily Coyote's estimated traffic, and came up with 90,000 page views per month. Assuming the page view count is right, how much does The Daily Coyote bring in?: (90,000 page views per month) * ($2.50 per thousand views) = $225.00 per month. For additional context her blog has an Alexa Rank of 157,000, which is impressive by most standards, and a nearly impossible goal for all but the most successful bloggers.
Speaking of successful bloggers, let's take a look at Om Malik's blog. Estimates say he gets about a million views per month. So, assuming he makes typical CPMs (I would bet he does a bit better...), how much money does this highly successful blog with an Alexa Rank of 13,000 bring in? $2500 per month.
So, what is a poor blogger to do? Do it for the love, not the advertising dollars. Or use your blog to promote something that actually does make money, like a plumbing business, or a bike rental shop. If you do it because you think there is some sort of gold rush going on with advertising dollars on blogs you should think again.