Many people wonder how to make money blogging.
I started blogging on April 22nd of last year and I just reached my 100,000th visit with around 200,000 Web pages viewed (e.g. each visitor is looking at two articles I’ve written).
Since I started my blog I’m amazed how many people have asked me:
“Can you make money from blogging?”
Indeed, one of the reasons I began my blog was to study the different monetization models used to make money from blogging.
I’ve looked at two ways to monetize my blog so far:
If you want to make money with a blog through selling AdSense, you’re going to have to have a lot of traffic…a LOT of traffic.
You can expect to make a CPM of $.25 to $1 in selling your ads through AdSense, according to my own numbers, and those of friends of mine.
What does CPM mean? CPM stands for cost per thousand (this is an advertising term as in an advertiser is willing to pay $X in cost per thousand of some audience metric (readers in magazines, viewers in TV, etc.) — interestingly, on the Internet the metric is page views.
For example, when I say that you can make up a $.50 CPM on a blog, I am saying that an advertiser (in this case many advertising bidding through Google’s AdWords system) is paying you $.50 for every 1,000 “page views” that your site generates.
So, back to my blog…if I were to receive a $.50 CPM, I would make:
So, if I were to have put Google AdSense ads on my site since I began, I would have generated a total of around $200 (The $1CPM ($.001) times 200,000 page views = $200).
A second way people try to earn money blogging is through affiliate marketing.
What is affiliate marketing? Affiliate marketing is just another form of selling ads: you put a link on your blog promoting another company’s product.
The difference is that you ONLY get paid if a person clicks on the affiliate marketing ad on your site and then buys a product from the site (the affiliate marketer) they then visit.
For example, I joined the Amazon Associates program (arguably the largest of its kind) and I include links to many products sold by Amazon (mostly books I review) here on my blog.
If someone clicks on my Amazon link, and they visit Amazon and buy any product (not just the one I linked to) during that visit, Amazon will pay me anywhere from 4% to 8% based on the volume of sales I help them generate.
In the year I’ve been testing out monetizing my blog through Amazon affiliate links, I’ve sold 51 products for Amazon, generating $1,048.31 in sales for them and $50.02 in commissions for me.
Basically, I’m making around $1 for every Amazon product I help sell — I’m converting .05% of my visitors to becoming a customer.
I could move that conversion number up to .25% immediately if I put more affiliate links up.
This .25% conversion number is fairly common for a content-oriented Web site like mine (and like most of the blogs of the world).
However, if you had a Web site that was focused exclusively on commerce (as opposed to advice like I do), I estimate you could move your conversion up to 2 or 3% of visitors buying something.
So, in total, I’ve learned that making money blogging (Google AdSense and Amazon’s Affiliate Marketing Program) has been very tough: I’ve generated just a couple hundred bucks from the 100,000 visitors who’ve come to my site in the last year.
So, we covered the tough part. For your blog to make money, you’re gonna need enormous traffic.
But in addition to enormous traffic, there are many other ways to earn money through your blog. Here are some:
I hope these tips on monetizing your blog were helpful.
I’ll be writing in the future about effective ways to monetize your blog or Web site and, as always, welcome your input.
If you like this article, you may also like MySpace & Other Examples of E-CPMs.
I recently finished reading Stealing MySpace, an interesting “inside-baseball” look at the building of MySpace and eventual sale to Rupert Murdoch’s News Corp. for $750MM.
While the MySpace story had a happy ending for most, it also reminded me of the surprisingly low e-CPM (effective CPM or cost per thousand) of many Web sites that either sell through third-parties or have ad inventory that’s difficult for advertisers to understand/value.
MySpace earned an e-CPM of about $.20 in its early days (November 2004).
To put an eCPM of $.20 into perspective, that means that MySpace had to generate 500,000 page views on its Web site to earn just $100 in advertising revenue…or 5 million page views to earn $1,000… or 50 million to earn $10,000.
Now, MySpace charged much higher CPMs (up to $2 or so) on many of its pages, but the average it received for all of its pages was closer to $.20, according to the book.
For those of you thinking of selling advertising on your Web sites, I thought I’d add a few other less-known e-CPMs or CPMs for you:
Now, interestingly, while all these e-CPMs and CPMs seem low, all of the companies mentioned were profitable. That’s because their cost of delivering 1,000 page views was very, very cheap.
MySpace, for example, spent only $.07 on what I call “Hosting CPM” (i.e. delivering each of its 1,000 page views) in its early days (November 2004); and since they had minimal other expenses at the time they were able to break even at that point.
My colleague’s Tips Web site (in the fourth bullet above) spends only 3.5 cents in Hosting CPM and minimal other costs, so he makes a profit.
To see the other costs in running a Web site check out my How Much to Pay for a Customer article.
Your e-CPM Scales as You Scale
The economies of scale work in your favor as you are able to command higher CPMs as your volume of page views (and brand value) increase.
For example, MySpace is now reportedly generating $75MM per month through about 40 billion page views for an e-CPM of about $1.88, according to this Silicon Alley Insider article.
So, they almost 10Xed their e-CPM from their early days!