DIGITAL MEDIA

So you have a blog, you’re getting comments on it and love updating it each day. Let’s face it, it’s becoming a passion. So, can you quit your day job, ‘monetise’ your asset, and become a fully-fledged entrepreneur of the online world?

Well it’s not so simple. Turning a blog that’s a hobby into one that’s a business is achievable, but, unfortunately, a lot harder than it would seem. And it’s harder in Australia than it is in the United States owing to the nature of our online industry where the top six companies dominate, despite the fact that online advertising is booming – with the industry in Australia expected to be worth $3bn by 2010.

So what’s the path you should follow if you want to make your blog more than a hobby? What options do you have for monetising your blog? And how much traffic should it have to attract advertisers?

First point of call: Google AdSense

Google AdSense matches ads to a website’s content, allowing publishers to earn money whenever visitors click on them. If you have AdSense running on your blog, you share the revenue with Google each time an ad is clicked on your blog.

Yes, AdSense is the simplest, quickest way to bring in revenue from your blog. Most blogs run AdSense because it can be set up in minutes, the ads are unobtrusive, and surprisingly effective. But did you know that you’ll need around 350 ad clicks to make just $100? And it gets worse, to get 350 ad clicks, you’d need about 52,500 page views of your blog (assuming on average that an ad will be clicked one in 150 times it’s displayed, a click-through rate of 0.6%). This is a fair bit more traffic than the average blog gets in a month.

No, Google AdSense isn’t going to make you rich anytime soon (unless you run a blog about mortgages where clicks can cost up to $30 each, but then who’d want to blog about their mortgage?).

So although Google AdSense is the easiest way to monetise your blog’s traffic, it’s only ever going to cover your costs at best. What other options are available?

Well, you can also sell text link ads (www.text-link-ads.com), or go down the affiliate sales path. Text link ads are similar to Google AdSense, but are easier as you just place a link to another site on your blog. But they’ll never really make you much money either. Affiliate sales (where you make a commission on each sale you generate for an online retailer via links or widgets on your blog) are pretty much a specialised industry. The revenue models are increasingly complex and not suited to someone who doesn’t want to earn a PhD on the subject.

Can someone sell my ads for me?

Most people who write blogs are passionate about their subject area and often they’re not particularly sales focused. Selling ads is harder when the blog is your hobby because time is limited. And it does take time. So is it feasible to get someone to represent your ad inventory for you? In short, it is not likely. I've spoken to many of the site representation houses in Australia and the view is consistent and clear – you’ll need more than 100,000 unique visitors a month, and even then you’re a niche website. You see, site representation companies have the salary overheads that an experienced ad sales executive demands. They take a commission of 30-40% to cover these costs, but it’s often as much work for them to get in front of a potential client as it is for you. Running the numbers on this cost base, it’s clear that for a site receiving less than 100,000 visitors a month, the commercials of site-representation don’t stack up. It’s not worth it for you, or them. Add to this the fact that these firms typically require a three-year commitment, and it quickly becomes apparent that external representation is the domain for the large sites that don’t want in-house sales expertise or aren’t based in Australia.

An industry obsessed with volume

The first thing a potential professional blogger should understand is that the online media planning business in Australia is obsessed with volume – traffic volume that is. Why is this? Well, Australia is unique in the world for having a huge skew towards the top six online companies (PBL, Google, Sensis, Fairfax, News Ltd and Yahoo!). In fact, these players receive about 90% of all traffic in Australia. This is not the case in the US, where there is a more democratic spread of traffic. Blogs such as BoingBoing receive millions of visits a month. Traffic in the US is spread more evenly across a wide range of web properties – the long tail is thicker and more gently sloping. This allows advertising exchanges such as Federated Media to have real traction in selling ads for the medium and small-sized websites.

In Australia, the main portals command a huge portion of all major online campaign spend. They have this grip because they have most of the traffic in Australia. As media planners tell it, if they tried to place a typical campaign across smaller sites, they’d be on the phone all day. And they’d have to report each site’s performance to the client. Currently they can pick up the phone and place the entire campaign with a call to one of the portals.

For smaller websites to get solid advertising revenue from the media planners, two things need to change. Blogs and smaller sites need to grow their traffic to the point where it’s compelling to put campaign money towards them. One of my sites, Lost At E Minor, recorded 100,000 unique visitors in September. This kind of traffic makes advertising discussions much easier, especially when you consider how targeted (and hard to reach) our audience is. But in order to help fuel the growth of smaller sites and to provide more advertising inventory to the industry, media buyers need to work out a model for including smaller sites and blogs in their campaign spend without needing to contact multiple small publishers. Australian ad platforms such as COGS Media allow media planners to tap the long tail this way. In time, as smaller sites grow, they’ll start commanding the attention of the media planners. Until then, the focus on the major portals will, I suspect, remain.

The most sensible advice provided to website and blog publishers by those in the know is to approach companies directly, rather than going through the media planning route, and look for site sponsorship by aligned companies.

Can you sell the ads yourself?

Yes, you can. The best place to start for a blog with a reasonable following and traffic is to look to secure site sponsorship directly. And the best place to find site sponsors is, unsurprisingly, in your existing website audience. Why? Because your audience already believes in your product. If you have a newsletter, make mention that you’re looking for advertising support. Approach companies directly offering them a website sponsorship package that locks in a rate for three to six months with more than just display ads and provides real value for money. The lead time for most marketing campaigns is often a quarter in advance, due to budget time cycles. So for our sports website, The Roar, we're pitching for rugby sponsorship now, during the summer months.

Approach similarly sized websites and run contra advertising. This effectively swaps advertising across two sites, no money changes hands, but both websites benefit from traffic growth.

Darren Rowse, from problogger.com, is an Australian making a good living from his blog (which, as its name implies, is all about how to make a living from your blog!). There are hundreds of other smaller sites which are slowly getting there.

The slowly shifting landscape

The Australian online landscape is a long way from the shape of the US market. Here, we’re dominated by the major portals which command most of the traffic, and most of the ad revenue. But the market here is slowly growing its own medium tail.

Crikey is spearheading the rise of the tier two sites and there is a lot of activity in the space by companies such as Allure Media (now the largest blog publisher in Australia) and Destra Corporation.

As the medium tail emerges, we’ll see a greater focus on the smaller sites bythose who wield the cashbooks – the media planners.

Until then, would-be professional bloggers should focus on going direct to companies and making your site a great product with growing traffic.

Zac Zavos is CEO of Conversant Media.

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