They object to the fact that it’s a paid site, closed to non-members. One reader wrote, “It's a pity you did not find a way to finance it using advertising—I think you would have retained a larger readership, which in the long run keeps your profile higher.”
|Not exactly a $ sign.|
And that just doesn’t happen through advertising alone.
Let me make an example out of my own situation: My site is one of the more popular economics and finance sites on the web. To put numbers to that claim: In April, I had an average of 13,760 pageviews per day, and an average of 7,167 unique visitors. In May so far, I’ve had 12,850 pageviews per day, and 6,970 unique visitors per day. (At the bottom of this page, there’s a link so that you can verify my stats.)
According to Gongol’s EconDirectory, those figures put me in the Top 10 of econ and finance blogs—very impressive, you would think.
However, the advertising income I have earned from these numbers is nowhere near what would be commensurate with that readership.
I started putting ads on my blog in late October 2010. The ads are on the blog for all to see, and they change for each segment: Some readers see ads for, say, life insurance, and others see ads for gold bullion, while others see ads for universities.
The ads a visitor sees depends on where they are geographically (which is determined by their IP address), what demographic the advertising algorithm guesses that the visitor belongs to, and what things interests the visitor, depending on the cookies already on their browser. People who look at gold websites will tend to get ads for gold; people looking at insurance sites tend to get ads from insurers.
Ads seemed like a promising way to go—a promising way for me to simultaneously write whatever I like, and earn a living.
But after six full months, I’ve come to realize that the advertising money is simply not there. At best, it’s a bit of extra income—but you can’t make a living at it.
First off, advertising revenue is split 50/50 with the company that sells the ads, in my case Investing Channel. They are a very reputable firm, handling the advertising for Yves Smith’s naked capitalism, Calculated Risk, and Mish Shedlock’s site—three of the Top Five bloggers in econ and finance.
Second, the money you do earn via advertising has a very circuitous way of getting to you—and by the time it does, it’s a lot less than you thought.
Here’s a chart with the actual numbers I have so far earned by way of advertising on my blog:
|click to enlarge|
Right away, you notice two things: Income varies wildly, and it’s not very much.
My blog is sui generis in that I don’t post short pieces every day—I post long pieces once or twice a week. Yet this idiosyncrasy seems to work: My readership fairly steadily averages about 350,000 pageviews a month.
Yet some months I book almost three times the ad revenue I book on other months. Seasonal swings are to be expected—but a three-fold variation from month to month? Jeez Louise . . .
Something else that pops out at you: The money I have actually received is of course less that what my share indicates it ought to be. This is because some advertisers don’t pay up, for whatever reason: Either they’re late, or they want to double-check, or they have complaints, or maybe they just flat out welsh on what they owe. So I receive less than what I’m actually owed.
Notice too that the money I receive is roughly two months after the month the ads were up. That’s because of billing lagtimes—you get paid 60 days after the end of the period in question.
Taking the total I received for the period November ‘10 through February ‘11—$6,838.07—that works out to an average of $1,709.52.
Per month. Gross.
You can’t live off of that—period.
As to sites with much more readership, like naked capitalism and Calculated Risk? They have four- and five-times my readership, respectively—so let’s say they earn four and five times what I earn, that is to say, $6,800 a month for naked capitalism, and $8,500 a month for Calculated Risk.
That’s not that much—considering they’re the leaders in the field, and considering this is gross income: Before any income taxes.
These numbers for nc and CR are on-the-fly guesstimates that are probably way off—I can only give exact figures for my own blog. But you see my point: Blogs—even the most successful blogs—don’t make money. Not through advertising, at any rate.
It took me a long time to figure this out. A long and painful time.
Some of my Loyal Readers & Kind Fans will recall I used to run The Hourly G, a topical blog where I posted several short pieces every day—
—it nearly killed me. I could keep up the pace during a week or two—but then three, four, five weeks? I was fried by the grind.
More to the point, there was no upside. I was trying to build The Hourly G site in order to have it be a platform for advertising. But then I realized that there was no money in ads—so I was killing myself for nothing. Not only that, my regular blog—this one—was beginning to suffer—what little ad revenue my regular site was generating was declining because of the work I was putting into The Hourly G site.
So I abandoned The Hourly G. Even though I enjoyed writing it, it was just not practical—and since (based on my regular GL blog) there wouldn’t have been the advertising revenue to make it financially sound, there was no reason for me to hire writers to help shoulder the burden.
The Hourly G just was not financially feasible. In fact, almost no free blog is.
Several people have tried looking at ways to make advertising on financial blogs something that can earn the writer a decent living. Barry Ritholz sent up a trial balloon among us financial bloggers—but in the end, it came to naught: There just wasn’t enough money to go around.
Why this is the case, I don’t care—what I care about is making enough off of my writing to support myself.
A lot of bloggers are in my exact same predicament: They have large readerships, but crummy advertising income. So they go on speaking tours, in order to drum up some incomes.
The problem with this—especially with bloggers who are telling it like it is—is that corporations which pay for these speaking engagements don’t want to bring in speakers who tell the truth. They don’t want speakers who are “downers”. They want Happy Talk, they want Inspiring Speakers—
—in other words, they want bullshit.
So the smartest, best bloggers barely get any speaking gigs—or if they do, it’s for peanuts, in out-of-the-way venues with small audiences. Often they speak in churches, priests and pastors inviting them so that they can explain to their flock why the financial situation is as bad as it is. Often, the “fee” is simply a collection basket passed around the audience. One blogger I know, with a big following worlwide, couch-surfed through Europe during a recent speaking tour—the blogger couldn’t afford a hotel, or even a modest B-and-B. Another blogger I know—doing ground-breaking work on the Mortgage Mess, work easily worth a Pulitzer—told me how nobody will pay to hear the depressing truth this blogger has uncovered and has been writing about.
Since I live in South America, setting up a speaking tour in North America or Europe would not be easy—and would certainly not bring in much revenue. It would certainly be fun—I’ve been thinking about doing one just for the experience of travelling around and talking, much like some Medieval itinerant scholar of old.
But a one-off tour for the novelty of the experience is one thing—touring to supplement your income is quite another. And it just doesn’t happen—not for the bloggers who are doing the best work.
Another avenue of income—which I have tried—is to make presentations and sell the recordings of them.
I did one on hyperinflation—you can see the advert in the right-hand column—and I liked doing the show. The income generated by the recording was fairly decent, which is always good, and the people who purchased the recording felt that they got their money’s worth, which is even better.
But an odd, fairly creepy thing started to happen: I started writing pieces in order to sell my hyperinflation recording. I went on a stretch about the dollar. It’s not that I cynically milked the subject—I believed in all the pieces I wrote. But I over-wrote on the subject strictly so as to drum up more interest—and therefore more sales—of the hyperinflation recording.
In other words, rather than writing whatever I wanted to, I started trying to tailor my stories so as to bring in more money.
Finally, I realized that, if I wanted to write whatever I want and at the same time earn a living, I would have to go behind a paywall.
Hence The Strategic Planning Group. As a paid site, its readership is far smaller than my regular blog—but what’s important is, I can write what I want to write and not be worried about earning enough money. I won’t have to tailor my writings in order to sell more of something, and I won’t have to spout shiny happy bullshit either.
At The Strategic Planning Group, I can relax.
I don’t feel at all guilty about charging membership fees—on the contrary: People are definitely getting their money’s worth—I’m doing everything in my power to make sure that that’s the case.
The Strategic Planning Group is a very polished, very smooth site, built by very capable web designers, at quite a bit of cost I might add, and quite a bit of effort. It’s got a very sophisticated forum called The Lounge, as well as an internal messaging system for Members. And since it doesn’t have advertising, it’s easy on the eyes and fast on the browser.
But best of all—and I must insist—it allows me to write whatever I want, and not be worried about the money bit—which is the whole point. It’s not that I want to be “exclusive”—it’s that I want to write quality pieces that are honest and forthright, and not be scrounging for quarters under every sofa cushion. So if I want to earn a living as a writer, and simultaneously write whatever I want, then I have to go behind a paywall.
Don’t for a second think that I’m abandoning my regular blog—quite the contrary: I’m still going to post on it, especially pieces which don’t fit in the SPG site (such as this very one you are reading). I’m also going to be reposting pieces that appear originally in SPG (though not the Scenarios, which are the crown jewels of the new site). In a very real sense, SPG will be financing the continuation of this blog that you’re reading.
Now, I told you at the beginning that I would explain why I had set up The Strategic Planning Group: And I think I have.
But an explanation should not be confused with an apology: I am never going to apologize for trying to simultaneously write whatever I want to write, and to earn a living at it too.
If people want to remove my blog from their Reader, or un-bookmark my page, fine, so be it. But I do think it’s snooty and arrogant to insist that a writer give away his work and not be recompensed.
After all, it took me four hours to write this piece—from 8:47 am to 12:23 pm, as I write. And it’ll take me a good ten to twenty minutes to proofread this piece, before it is ready for your enjoyment.
That’s got to be worth something more than just meaningless pageview stats.
I’d be remiss if I didn’t add: Please check out The Strategic Planning Group’s home page, as well as the Membership Preview and FAQ page. Thank you.