DISQUS

A VC: I Guess I'm Doing Something Wrong

  • howardlindzon · 1 year ago
    I do anbout 40,000 uniques a month, is that enouh to set up the charity ad campaigns.
  • fredwilson · 1 year ago
    i think you could generate close to $10k/year for charity, so no, it's not
    too soon
  • ChrisLake · 1 year ago
    Nah, you're doing great, and I think it's a little different if you're a business-focused blogger. AVC has really put you on the map over the years - you're now a bit of a posterboy / rockstar, and as one of the go-to guys for early stage funding you should calculate the value of your blogging activities beyond what the site itself makes.

    Technorati's facts (I use that word lightly) and figures are often a bit off the mark. And they deal in generalisations. This is a case in point. Blog revenue depends on a bunch of things, the key factors being: sector / subject focus, amount of newsflow, type of audience, reach / where you attract traffic from, and site optimisation.

    150k uniques might mean 150k page impressions, or 1.5m page impressions, or 15m page impressions, depending on how many pages a typical user consumes. And this is what determines revenue for most of the bigger / pro- bloggers, since most of the larger blogs have CPM deals in place.

    I run a blog that has anywhere between 600k-1.25m uniques in a month, and we're pulling in six figures over a year. But our average page impressions per user could be much higher, and as such so could our revenues. It's the nature of the beast...

    My bet is that you'll pull in a lot of bookmarked / direct traffic? You have an army of followers. Our readers are increasingly coming from aggregated news sources such as Digg, StumbleUpon, Fark, Google News, Facebook, etc. And the thing is, we're seeing that 90% of Digg users bounce. It is what I politely refer to as 'in and out traffic', with the exception of StumbleUpon (which has a much lower bounce rate). I love Digg, and I use it every day, and this often reflects how I consume Digg stories. In and out.

    By improving the website in order to increase participation / loyalty / browse rates, bloggers will get more juice out of their existing traffic, and that should add up to more $$$.

    Anyway, we've come a long way... keep it up!
  • Daniel · 1 year ago
    The distinction this comment makes between (disinterested) traffic brought to a site by Digg--"in and out"--and existing traffic is an important one. Don't know if you guys have seen it but Seth Godin made a good post a while back on "how much one should publish" where he argues that one should focus on their backlist as opposed to the frontlist.

    http://sethgodin.typepad.com/seths_blog/2008/09...

    I should mention that I'm not Seth Godin trying to pump my own blog here. My readership is about 100 consistent per day and I'm making diddly squat (though I did just put up a few Amazon/Google Adsense ads so I should be raking in the pennies any day now)!
  • ChrisLake · 1 year ago
    Hey Daniel,

    Just to be clear, the Digg traffic is *highly interested* in the article (hence the visit), but not necessarily interested in everything else on the website. In addition to that, we haven't optimised our site especially well, so we're not doing a good job of encouraging these readers to stick around.

    But the fact that Digg is there allows us to promote older articles (Seth's 'backlist'). That article certainly provides some food for thought. But there's that old media saying: "Today's newspaper is tomorrow's chip paper." Old 'news' stories aren't going to be worth anything on a site like Digg, or any other site for that matter. You need a specific kind of article to do well on sites like Digg (the ones that aren't time-sensitive, and deliver some kind of value or entertainment).

    Besides, this sort of behaviour (the 'in-and-out') occurs frequently on news aggregators and social media sites.

    On aggregators, readers go back and forth, reading a few versions of one story across different sources (for a different view, or new facts, or reader comments... think sports, politics, gossip)

    On social media sites users often return to leave comments or rate articles (and I don't mind where that conversation happens, so long as it happens).

    And with that backlist in mind maybe the investment in content should be less news and more features...
  • work at home dad · 11 months ago
    you run a blog that's pulling in 600k-1.25m uniques? Now that's great! Six figures a year? What sort of monetization are you using?
  • Chris Lake · 11 months ago
    Hey - mainly display advertising (CPM and a bit of Adsense), plus sponsorships, virals, etc. Let's see how hard the advertising downturn hits us in 2009... ; )
  • Stephen Pierzchala · 1 year ago
    Fred: Does Technorati say that bloggers make (on average) $75K/year, or that their blogs make bloggers $75K/year? I believe that what the report says is the former, not the latter.
  • work at home dad · 11 months ago
    I re-read the technorati article and I think you're right. It seems that the $75k/year is the annual income of the bloggers (but not necessarily the income they got on their blogs).
  • kidmercury · 1 year ago
    IMO we are going to need to get past CPM/CPC pricing to get to the real blogger revolution. ecommerce and lead generation work much better, aff marketing can help too. ultimately i think bloggers need a system that enables them to profile users and monetize this information accordingly (without violating trust).
  • Dan Lewis · 1 year ago
    I believe it -- I just don't think it's terribly meaningful.

    "Mean" is not "median", and "100k+" is not "100k". Taking the second distinction first, the study includes the whole Technorati 100 -- each of which have way more than than the threshold number of visitors. They also probably bring in significantly more than $75k/year, and make up for a lot of the smaller blogs which bring in a fraction of that.

    I'd love to see the median data and a distribution graph. That'd be valuable.
  • andyswan · 1 year ago
    Beat me by seconds. Great point. :)
  • curiouslypersistent · 1 year ago
    Agreed
  • andyswan · 1 year ago
    You're not doing anything wrong. It's just a math issue.

    It's saying that the mean revenue for those with 100,000 OR MORE impressions/month is $75k/year....NOT that the average revenue is $75k for a blog that has 100,000 impressions/month. Two very different stats.

    I have NO CLUE, but from a math perspective I'd imagine it breaks down something like this:

    100k/month ~ $25k/year (lots of people)
    250k/month ~ $55k/year (quite a few)
    500k/monty ~ $120k/year (not so many)
    1000k/month ~ $240k/year (under 50)
    2000k/month ~ $480k/year (5-10)

    Now, when you average just this group of "100k+/month", you'd probably get something like $75k/year....but there is still a significant group of people at the end of that particular long tail who are making $25k and "mystified" by the statistic that technorati chose to use to promote its industry.

    The bench players in the NBA should not be mystified that they are being paid significantly lower than the mean salary for NBA players, but significantly more than basketball players in general.
  • Jasonp107 · 1 year ago
    I know someone who's running about 500k pagveiews a month, pulls only ad revenue, and makes right around 120k. I'd guess the rest of your spread is pretty accurate, too.

    I'm also willing to bet that a creative blogger with 100k page views could make the extra 35k by building an e-mail list and intelligently leveraging affiliate sales.
  • andyswan · 1 year ago
    Gotta love the accuracy of common skews and distribution curves!
    Great point about email list...cpm seems doomed to me.
  • work at home dad · 11 months ago
    With an email list, I think they can add in more than 35k a year specially for high ticket items and products suitable for your target audience.
  • djc8080 · 1 year ago
    These numbers imply $20 eCPM - surprisingly high when the industry is reporting $1 eCPM for the long tail, and $10 and declining for top sites.
  • andyswan · 1 year ago
    Was talking visitors not pageviews....
  • BerislavLopac · 1 year ago
    $30k per year which is very hard to make a living on no matter where you live
    I guess you forgot to add "in the US" at the end. In some places it could make for a very lavish lifestyle.
  • davidcushman · 1 year ago
    struck me as insanely large numbers too Fred. Even if you added affiliate deals or even paid reviews (let's hope not!) the gap feels a huge one to fill.
    I took part in the survey. Wonder if there was some over estimation on the part of bloggers?
    Would love to meet one who is making that kind of cash from affiliate deals and ads alone.
  • dantinpa · 1 year ago
    Is it possible they are adding in sponsor-type advertising? I know someone with a supply chain blog that has a lot less readers than AVC and he makes six figures in his sponsorship advertising alone
  • fredwilson · 1 year ago
    That's what I mean by 'works it harder than I do'. Yes that's very possible
  • Logic First · 1 year ago
    It's also possible the average of all blogs with OVER 100k visitors/month gets 3x the traffic you do....you know, since you're near the bottom of the pool they are talking about and all.
  • Emil Sotirov · 1 year ago
    There is a new way to make financial (ad)sense from even a lowly $1/month blog - by a volunteer aggregation of the revenue across a large number of blogs and directing the revenue towards a worthy cause, organization or person... something that was impossible until now.

    3,000 small blogs would produce the revenue Fred is doing on this blog.

    See http://juicetorrent.com (disclosure - I am with the company that does JuiceTorrent). We just started the service.
  • Eric Wiesen · 1 year ago
    This is almost assuredly mean-skew by the absolute top blogs. If one blog (e.g. techcrunch or HuffingtonPost) makes a few million in revenues, it will lift the entire data set. Median would be much more telling.
  • gregorylent · 1 year ago
    ha, when i read that i thought 100k a day, and made a bit more sense
  • RacerRick · 1 year ago
    If you wrote with the frequency and passion but about travel, you'd make $75,000 per year.
  • danvers · 1 year ago
    Isn't this the crucial point. It is all about the subject matter and therefore the type of person who reads your blog. Also, your blog is not consumer product related, and I assume those blogs do quite well.

    Am I not right in thinking that the more sophisticated web user (i.e. your readers) are less likely to click on ad words or any other links - also, as you have pointed out, many will be using feedreaders which do not generate page impressions - and presumably you don't give a stuff about SEO crap.

    Finally your blog is nicely designed so you don't have to click madly to navigate (i.e. more after the ****ing jump) - which also keeps down impressions.

    Basically it is a nice blog which you happen to monetise... please keep it that way.

    Oh - how about increasing your charitable giving by investing the $30k pa in a brilliant start up (crowd sourced by your readers, natch) and then donating the profits after the exit at 10x initial investment??
  • Ryan Catbird · 1 year ago
    Kidmercury is 100% correct. We will not see the "revolution" until we get past this CPM/CPC pricing fixation. In this day and age, I can't see how valuing something based solely on the gross number of eyeballs looking at it could possibly be the best methodology. I would think that having 100 users who were really interested, active, and engaged with an advertiser would be worth a lot more than having 10,000 DISinterested users briefly glancing at an obnoxious banner ad.

    Believing in CPM as a great model isn't far from believing in mass spam mailing as a great model; they're both based on the same principle: club as many people as possible over the head with your message, and hope you can get 1% to respond. The advertisers who recognize that the future isn't about brute force -- it's about targeting and engaging the consumers who *want* to be engaged -- those are the advertisers who will survive and thrive. The rest can go live in our spam boxes.
  • test · 1 year ago
    Test
  • josh guttman · 1 year ago
    Sounds like the bloggers surveyed are among the upper echilon of semi-pro bloggers. I think that a Technorati survey self-selects skewing towards those who take blogging most seriously. If you really captured every blog with ads through AdSense, BlogAds, etc, I'm confident the average revenue would be far lower.

    By the way, I know there are loyalty issues, but for the benefit of your favorite charities, I've heard Pheedo is paying 3-4x Feedburner these days.
  • Sprague D · 1 year ago
    Jeez, guys, Stats 101. The mean of $75K for 100K+ bloggers is skewed by the very few with huge audiences and incomes. Check the median: $200. If Technorati published the distribution you'd see that most bloggers with 100K+ uniques are making next to nothing.
  • Rick Calvert · 1 year ago
    I agree with you almost completely Fred. I would just emphasize something that you touched on in your post. Your primary goal with your blog is not to make money and yet you still make $30k a year. This is not your primary occupation or source of income and you still make $30k a year off of it?. That is pretty substantial and impressive.


    Do you factor in the deal flow you receive based on positioning yourself as a very social media savy VC via your blog?

    I think once you do that in your case you will exponentially exceed that $75k a month number.

    Lastly if you were to review your blog with a few experts who do blog with the express purpose of making money like Darren Rowse, John Chow, Wendy Piersall, Shoemoney, etc I would be willing to wager you could easily increase the income you earn via your blog with their recommendations.
  • Robert Seidman · 1 year ago
    If you're doing something wrong then I am the biggest screw up EVER. Of course relative to you that is almost certainly true anyway, but we’re over 100K uniques and via advertising --- any advertising -- I can’t imagine generating more than $50K in revenue even pushing it hard – and that would be more than 10X what we’d get via Adsense.

    Fortunately (or unfortunately, depending on your point of view) I am not yet convinced we don't have much better prospects via sponsorships.

    I'm glad though that *you* are not in this for the advertising revenue :-)
  • David · 1 year ago
    The niche the website is in very important. I know loads of sites that get the same traffic or less than a lot of my sites, and many of them make more!

    The amount of revenue per visitor gets better the more niche a site is, from what evidence I regularly see. Obviously the more niche a site is, the less visitors interested about the site. It's gaining the right balance.
  • JasonC · 1 year ago
    I think both lines of thinking (mean vs. median and user engagement) here are correct, but speaking personally I would tend to say that user engagement (ironic, given the community of commenters this site has developed) is holding your revenues down relative to the "mean". While I at least skim almost all of your posts (and comments as-and-when) on a daily basis, I can't tell you one single ad I've ever even remembered, let alone clicked on. I think he can sometimes miss the big picture, but Seth Godin keeps harping on about advertisers/marketers becoming part of the conversation. My guess is that the mean is skewed by those few blogs who's ads are so interrelated with the conversation on the blog that they get higher rates than your usual CPM/CPCs.
  • alan p · 1 year ago
    Fred, I did an analysis of the underlying tables (see blog post below), which have medians, not the average - gives much lower values, an order of magnitude below your blog's (assuming your 150,000 are unique visitors rather than visits). Hypothesis is that the "hit head" is making nearly all the money - explains high average/mean, very low medians.

    http://broadstuff.com/archives/1259-Funding-the...
  • Ryan Graves · 1 year ago
    Wow I'm shocked at those amounts...

    I have about 1500 uniques a month (which is .015% of 100k). Using Fred's numbers ($30k) I should be able to make $450/yr and using the $75k number I should be able to make $1125, assuming this scales downward proportionally.

    Do you Fred, or other readers think that a growing blog at this level would stunt its growth by adding a banner ad? If you the readers think that it wouldn't I may change my philosophy here and "ad" one :)

    Thanks in advance for suggestions and help.
    http://ryanagraves.com
  • Jen McLean@Technorati · 1 year ago
    Sorry the summary was not more clear ("Among those with advertising, the mean annual investment in their blog is $1,800, but it’s paying off. The mean annual revenue is $6,000 with $75K+ in revenue for those with 100,000 or more unique visitors per month.")


    Here’s some additional context: among active bloggers that we surveyed, the average income was $75,000 for those who had 100,000 or more unique visitors per month. Some of the bloggers in this group told us that they have more than one million unique visitors each month. Note that the median annual income for this group is significantly lower -- $22,000. These numbers represent self-reported income. We’ll have much more detailed data on revenue in the Day 4 segment: Blogging for Profit.
  • andyswan · 1 year ago
    Median/mean rears its ugly head again :) Thanks Jen!
  • Megan Cunningham · 1 year ago
    A quick analysis of the biggest blogs or blog networks that have been sold and published their revenues would support the argument that there is tremendous elasticity in the interactive ad market right now. PaidContent, ArsTechnica, SugarPublishing, DailyCandy (tho not a blog, an email/web property recently on the auction block) even some of the Gawker sales... all show that running a blog like a real media business can prove to be immensely profitable.

    Supporting a diversity of revenue streams that support the market as it is today (CPM based display advertising, email newsletter ads and list rental) combined with higher-margin revenue streams that serve a more unique value prop (post roll video, organic sponsorships, lead gen, microsites) is the only way to operate profitably in this climate. This way, your community/audience is served first and your editorial remains strong, but the business fundamentals are taken into consideration. The industry-wide transition in media consumption and sales presents enormous opportunity for brave clients and creative entrepreneurs, alike. But it's not for the faint of heart!
  • fredwilson · 1 year ago
    Thanks Jen

    So it's simply a mean versus median issue

    $22,000 for 100k is almost exactly proportional to $30k for 150k

    I am not doing something wrong!

    And this also tells us that a blog UV is worth in the range of $0.20/year
    for a blog like mine

    If you treat that like an annuity (a bad assumption I think), a blog like
    this one would be worth around $2/UV to a buyer
  • iphone guy · 1 year ago
    Fred - this has nothing to do with your post.. but I think you're into this sort of thing, and i read your blog everyday.. so WTF.

    Your icon on the iPhone - when i saved it as a bookmark to my iPhone's home screen - sucks.. you need to make a web clip. it's very simple.

    http://www.mynewiphoneworld.com/custom-iphone-i...
  • Steven Kane · 1 year ago
    Hmmm. Classic case of lies, damned lies, and statistics.

    Seems the long tail is wagging the dog?
  • rafi · 1 year ago
    This discussion seems kind of silly. I know a couple bloggers who according to Compete.com have far less unique visitors but are earning over 75k from their blogs this year.

    Niche matters, pageviews matter, ad networks matter...

    But yes if ad money is your concern, comparing my anecdotal experience to yours, you are clearly doing something wrong. But then so am I.
  • Phanio · 1 year ago
    Would it be the quality of the ads or ads better directed at their audience then just simply the fact that a blog has visitors. Could a blog or even website that provides real value to its visitors make more than those who are simply after all the visitors it can get. Example, a blog that is focused only on getting visitors - any visitors - gets the 100K plus visitors a month, has ads that target every thing from get rich quick schemes to ED pills but only earns revenues of $6K per month. On the other hand, a blog that only gets say 10K visitors a month but targets its ads to it content – content that provides real value to its users – and earns $75K plus per month. Is this possible? I ask because I am new to blogging and would like to make money as well as provide real value to my visitors. If I am off the mark here, I would assume that I would then need to forget about the ‘add value’ idea and just fill my site with the most popular ads.
  • djc8080 · 1 year ago
    Federated Media is doing a great job for you, turning an estimated $20 eCPM. Other high traffic blogs flood their pages with ads to earn similar eCPM, but at the cost of low ROI to the advertiser. The Long Tail earns less than $1.00 eCPM. (See New Economics of Advertising for 900 pages of collected research.)

    I agree that $75k per year would start another renaissance of content on the Internet. It's green, rich media, and connects communities.

    100k unique users make no sense. Most real communities have less than 50,000 total population. This also applies to most B2B markets. For vertical communities, 100 million UU might be needed to sustain long term viability. 100k is a no-man's land.

    Small business advertisers mostly target 50,000; not millions.

    The big picture is that we need thousands of communities with 50k UU, 10 pages per month, $50 eCPM net to the publisher. That's $25k per month - enough for salaries, investment in rich media content, and interactive features.

    At tEarn, we're beta testing with 50 local newspapers and niche publishers to realize this goal. It's time to stop inflating hits for size sake. It's time for change to segment into real, sustainable communities - tens of thousands of what we call microchannels.

    -Dash Chang
    http://tEarn.com/
  • bill · 1 year ago
    Hi, Fred,

    I'm a long-time reader of your blog. Great post. I don't think that "you're doing anything wrong", :-) but I do think you are not doing enough to monetize your blog traffic. Without working a lot harder, you should still be able to generate much more than the $30K you're making now.

    I just wrote a detailed post (see http://www.geekmba360.com/?p=196#more-196) that compares your blog to a top-earning blog that is generating $30K+ a month with only 183,633 monthly unique users. I'm curious if you'd be open to try out some of the suggestions. :-)

    cheers,
    Bill
  • innonate · 1 year ago
    I'll echo what I imagine others have pointed out... if you actively sold you inventory (or had someone else do it), you could easily get to that $75k number.

    if you want me to sell it for you, let me know :-)
  • joblo · 1 year ago
    err... what's a VC?
  • work at home dad · 11 months ago
    Venture Capitalist
  • desaraev · 1 year ago
    Wow. I guess I'm doing something wrong too.