Making Money with Blogs: An Overview

Thinking about making money with your blog? Here is an overview of several ways to do so…and all you need to add is your audience’s attention.

For most folks, blogging is a labor of love from which they make no money. They simply write about whatever moves them, without any thought about how it could lead to revenue or profit.

For a growing number of folks, though, blogging is serious business: with the ultimate goal of being to make a decent living from it. However, making significant money with your blog isn’t that easy.

With a new blog appearing on the Web about every 6 seconds, not everybody will succeed in making money with their blog. There is a limited resource after all — your attention. This is what all blog owners need and as a result garnering it is fiercely competitive. If you’re reading their blog, you’re not reading someone else’s, and thus they have an advantage. The difficult thing is turning that attention advantage into money.

So how does it happen? How does one convert blog attention into money?

Here is an overview of several common strategies that bloggers have used to try to make this happen:

Running Advertisements

Running ads is probably the most popular way to make money with your blog. Most ads are produced with Google’s Adsense program. The Adsense program has proven effective because the ads it delivers are contextual: they are relevant to the content on the rest of the page. So, people who read a blog about a certain topic are shown ads about that topic, greatly increasing the chances that they might respond to the ad. The ads are commonly placed on blog entry pages and homepages.

Affiliate programs provide another means to earn money from advertising. Whereas the Adsense program pays bloggers for each click-through, affiliate programs like Amazon.com’s pay bloggers a percentage of an eventual purchase. The chances of success are lower, but the payoff potential is bigger.

Most bloggers using Adsense or affiliate programs make small amounts of money — about enough to cover their hosting costs. However, several larger sites, like Tim Bray’s ongoing.com and others nearer the top of the Long Tail, claim to make upwards of several hundreds of dollars per month.

To make a lot of money using advertising takes a ton of attention. Blogging about personal stuff probably won’t work for this, and most people who make decent money happen to have an excellent feel for an industry or technology and also seem to have decent writing skills. John Rhodes runs AdWords on his popular niche web site WebWord.com (a site about usability). In this interview he claims to make “several hundred dollars a year” by advertising, but he warns against trying to make money that way, pointing out that it took him years to get the attention his blog now enjoys. His advice for those thinking about making money with ads on blogs? “Don’t bother. Blogs don’t make money, people make money!”

Publicizing a Company/Product/Service

Blogs don’t always have to be personal. Many companies now use blogs as an additional marketing arm for their own products and services. Google has a company blog, which it uses for both serious company announcements and not-so-serious musings. Macromedia has several blogs dedicated to a specific product line, like this one dedicated to Flash. Macromedia sums up their blog strategy as follows:

“Blogs give us the fantastic opportunity to mass communicate directly and quickly with our customers, in an easy-to-read format, without going through slow corporate processes. While Macromedia’s online forums are also a very popular method for discussing our products, the blogs give our community managers centralized areas where they can each point out the top topics that they’re seeing in the community on a daily basis.”

It is not entirely clear how these corporate blogs make money. However, I think these companies are assuming that communicating directly via blogs will produce a closer relationship between them and their customers, thus making those customers more loyal over time and more likely to purchase again. Also, the companies must benefit from the increased feedback, even negative feedback, of their products and services. This is information that they can use to improve their products that they might otherwise not have received.

Most companies, though, don’t have official company blogs. But that doesn’t mean they don’t have blogs helping them out. Employees of many companies are now blogging: indirectly (or directly) publicizing their company.

Robert Scoble, a Microsoft employee, is one of the most popular corporate bloggers. In light of the attention that he receives, Scoble might very well do more positive advertising for Microsoft than they can do themselves, given that the company usually displays a combative “us vs. them” attitude in a discussion of the creative exploits of others. Scoble’s posts, on the other hand, show that he’s a real guy with real thoughts who doesn’t always agree with the decisions of the company who signs his paycheck and that he’s willing to give credit where credit is due. Contrary to a die-hard biased-to-the-end employees who cannot see the world through any eyes except their employer’s, Scoble’s views are mostly even-keeled. And that’s refreshing.

But is he making any money? Yes, he probably is making some, given that he’s been invited to speak at several conferences and is writing a book about his experiences (Scoble has a policy is to let his readers know if he is making money and that he’ll donate it to charity). That aside, I can’t help but wonder how his blogging is impacting the bottom line of Microsoft, given that he’s evangelizing their latest technology to the most technologically-savvy users out there: blog readers. It is probable that he’s making more money for Microsoft than he’s making for himself. Even if he’s not, he’s fulfilling his technological evangelist job role pretty well.

Paid-for Blogging

Scoble is only one step away from a new kind of blogger that is showing up: the paid-for blogger. The paid-for blogger is unique in that they are paid by a company they are not necessarily affiliated with to blog about a specific product or service.

One recent example of this is the case of Marqui.com, makers of a content management tool. They hired 20 bloggers, paying them each $800/month for 3 months, to talk about their product on their blog.

A few bloggers that I read participated in this. One is Richard MacManus, who runs readwriteweb.com, and who articulated his reasons for doing so in an open and honest post at the start of the program. This post was not unique, however. It is indicative of the most interesting part of Marqui’s venture: their involvement has been amazingly open. They talk freely about what they’re doing, and ask the bloggers to do the same. They talk so openly about the program, in fact, that they even share the terms of payment!

Despite the openness of the project, paid-for blogging isn’t a guaranteed way to make money — yet. First, the long-term viability of the project isn’t clear: with only one month out of 3 complete it is hard to tell if even the initial project is going to be a success. Second, it is unclear how blog readers will respond to their bloggers participating in these types of programs. Undoubtedly some will see them as sellouts, some will see them as pioneers, and some will see them as damn lucky to be asked. Lastly, and perhaps most importantly, it is probable that Marqui’s experience will be different than all those who follow. But whatever happens, Marqui is sure to be talked about (at least for a couple more months).

Enhancing Reputation

Making money isn’t always as direct as the I-blog-you-pay scenario of paid-for blogging. Sometimes it’s more indirect, like when blogging to enhance reputation. This is often done with an eye toward networking with other folks who could prove useful business contacts in the future, like in cases where someone needed something done and they just happen to know this blogger who can do it.

A good example of this is one of the oldest ones. Jeffrey Zeldman, 10 years the proprietor of Zeldman.com, deftly nudges visitors from his personal site (it became a blog somewhere along the way) to his own web design agency: Happy Cog. There is nothing odd or forced about this. It doesn’t feel like advertising, it doesn’t distract, and it doesn’t lessen the quality of what is there. On the contrary, this is a common and natural technique for any web designer working in the medium where they work best. Designers who don’t enhance their reputation with blogs are getting fewer and farther between.

Measuring this in money terms is no easy matter, however. Some leads will result directly from a blog, and the money those bring in can be counted as revenue received from blogging. Most leads aren’t that clear-cut, though. But as long as there’s work, as long as people are attending to the blog, it’s probably safer to keep it all going.

Improving Your Skillset

Related to enhancing reputation, improving one’s skillset is another way to indirectly make money from blogging. Many bloggers simply want to become better writers, which is the basic activity of bloggers (this was a primary reasons why I started the blog you’re reading right now). Other folks want to become proficient leaders within a specific industry or concerning a certain topic.

An interesting side effect of blogs is that they act as portfolios of work. Anybody who is interested in hiring a blogger can simply go to their web site and learn a lot about them. They can see how well they write, how cleanly they code, or even how nice a person they seem, even if that wasn’t the original intent of the blogger.