Thursday, February 22, 2007

Making money from your blog?

It's not the latest buzz anymore. Internet moves fast and what was hot yesterday isn't very hot today, and even though AdSense is still a potential goldmine, new niches rapidly become saturated when Internet entrepreneurs rush in to get their piece of the cake. A classic example is the buy-a-pixel hype a couple of years ago. A college student (a.k.a. Alex Tew) got, in a stroke of genius, a deceivingly simple idea: sell one million pixels of ad-space for $1 each. He succeeded in selling all of these essentially worthless pixels simply because his project became the buzz of the day, generating tons of traffic and people lined up to get in on the deal.

Now there are people trying to copy this idea, but it seems that the air has run out of this fad. One recent attempt,, tries to combine the current blog-hype with pixel ads and are selling advertising space to blogs for 25 ¢ each. So far they have sold 11,400 pixels for a total of $2,850. Advertisers have so far (February 22nd, 2007) received around 100-160 clicks for their $25 advertisement, which translates ~15 ¢ per click. This is about 3-4 times more than what you pay for AdWords traffic today, but the cost per click will of course decrease as more clicks are generated. So there might be some steam left in the pixel-ad balloon, but far from being the same gold rush as in 2005.

Moving on to advertising and blogs. The blog monetize guru of the day seem to be Steve Pavlina. In October 2006 he claimed to make $1,000 daily from various incomes generated from his blogging site. Similarly, the traffic was said to be 1.1 million visitors and 2.4 million page views per month (April 2006). First of all, are these numbers trust-worthy? Checking the math we see that assuming 3 million page views in October 2006, and a CTR of 0.5% we arrive at 15,000 clicks. Let's be generous and say that Steve have managed to find some high paying keywords so that he get on average $0.5 per click. That's $7,500 per month or $250 per day. A bit short of the $1,000 he claims. Granted, there are also other income streams apart from AdSense, like Donations, Text-link ads and so on.

Steve come across as an honest guy, so let's assume his numbers are true. Is he then the Alex Tew of blog monetizing? Or put in another way, is blog monetizing just another pixel-ad fad?

Well, maybe not. First of all, Google AdSense is a sustainable income which is based on a real value. Companies buy ad space, you display ads and get paid for the traffic you generate. So it is definitely doable - if you can attract the traffic. Steve claims that his traffic is generated by solid, worthwhile and timeless content. This might be true, but I would wager that a lot of his traffic comes from people that want to learn how to make $1,000 per day from their blog. So in fact a blog post (or several) about how to make an income from your blog generates income from your blog. Everyone likes to read success stories, and to imagine themselves in place of the successful entrepreneur (in this case Steve Pavlina).

So maybe Steve has managed to tickle the imagination of millions of bloggers who would love to make thousands of dollars from their blogs, which is admirable in itself, but hardly sustainable in the long run. Don't get me wrong though, Steve's site is packed of interesting and worthwhile stuff to read, so his traffic is well deserved. However, I question whether his blog would attract the same interest were it not for his now famous claims of five digit monthly income from his blog?

My point here, and I'm not implying that Steve Pavlina is lying, is that by making claims that you have a fantastic success story that you want to share with everyone, you can actually boost the traffic to your site/blog and create a sort of a self-fulfilling prophecy.

So is Mr. Pavlina actually the passive income guru he projects himself to be, or "just" another smart entrepreneur boosting traffic to his blog through a cleverly crafted success story? You be the judge.


Steve Pavlina said...

I am an honest guy. :)

You're making some mistaken assumptions about my blog, so that's what's throwing your numbers off. Here's some additional info that may give you a clearer picture.

I currently make a little over $9K per month from Adsense -- Adsense used to be my #1 income stream when I first wrote that article, but it isn't anymore -- now it's #2. Most of my blog's revenue (about 70%) now comes from joint-venture deals. A JV deal is basically a fancier, custom version of an affiliate program. I also generate income from regular affiliate programs, donations, and direct ad sales.

I'm doing about 1.8M visitors and 5M page views per month. Not all of those page views show Adsense ads though.

0.5% would be a very weak CTR. If your CTR is that low, you probably have a really suboptimal ad layout.

I'm currently earning about $40K per month from blogging. The site costs me $220 per month in hosting fees and bandwidth. I don't spend any money (not a single dollar) on advertising or promotion. All my traffic is generated from word of mouth.

If you're suspicious about someone's traffic claims, you can look up their site at Alexa is owned by That will give you a good indication, especially as you compare their site to other sites you're familiar with. If you do that, you'll see that my site generates about as much web traffic as You can also view the growth chart. Alexa isn't perfectly accurate, but it does make it hard for someone to tell baldface lies about their traffic.

I understand that some bloggers would have an incentive to inflate their revenue figures to attract more interest in order to sell products such as ebooks. However, most of my visitors do not care about blogging, since that isn't the theme of my site. Out of 500+ articles I've written, probably less than 10 of them are about blogging. I didn't build traffic by writing about blogging -- the personal growth articles are far more popular, since that's the theme of the site.

The money is a nice bonus, but I find it far more important to focus on providing genuine value and to simply help people. I'd still be a blogger even if I wasn't earning any income from it. In fact, that's exactly what I did for the first 5 months.

If you want to generate income from blogging, great. Just be sure your compassion for others comes first.

meph said...

Nice to see you dropped by and took the time to comment. That is much appreciated. You are an inspiration and a puzzle at the same time. I hope you don't mind me writing about your blog. I think that with all the information you provide in your comment I'll write a new post. Thanks for the clarifications! Those numbers are truly impressive.