A question that flows across my desk with increased frequency is how to make money through your blog. While I have a page on this blog spelling out how I make money online briefly, I want to go a little bit more in depth on how successful companies (online and storefront), continue to see revenue increases year after year. What many bloggers fail to realize is that the same way brick and mortar companies continue to increase profits is the same way you need to increase income as a blogger.
However, there needs to be one clear focus through this entire process…without quality content and an audience to sell to…you have nothing. For this reason, beginning bloggers need to spend 95% of their time generating quality content that people are going to want to read. As you produce this content on your blog, you need to promote it in a way that attracts more readers. After you have created a following and have significant content on your blog, you can start to shift some of your resources towards monetization.
Case Study: How Best Buy Conquered Circuit City
In the United States, we had two major players in the electronics retail industry…Best Buy and Circuit City. Each of these two retail companies started off with very similar business models. Each was going to sell TV’s, audio equipment, small electronics, computers, music and movies to the retail buying public. In most cities, you could find one store a mile or two away from the other, so they were in direct competition for the same customer base for the same general product offerings (brands were sometimes different).
Circuit City held true to their original business plan and changed basically nothing throughout the course of their operation. The stores stayed relatively the same, product lines did not expand and their approach to the retail market went unchanged over the years.
With Best Buy, we started to see shift. The stores were increasing in size to accommodate a wide range of new products. We started to see washers and dryers, refrigerators and small home appliances. Best Buy was positioning itself to be a one stop shop for everything in your house that you had to plug into a wall.
What happened over time? Best Buy’s market share continued to increase as Circuit City’s started to decline. The new product offerings were increasing their customer base and attracting more buyers to their stores. As I mentioned before, Circuit City and Best Buy were competing for the same customers, so as one increased…the other had no option but to decrease. Best Buy’s diversification pushed Circuit City out of the market and into eventual bankruptcy and shut down.
What can you learn as a blogger from this case study?
A lot of bloggers focus on making money online through one or two avenues. After awhile they start to see some monetary success, so they continue to beat that one avenue into the ground. All of the sudden, something bad happens. That market they have been focusing on for so long dries up and they are left with nothing!
Case in point…Adsense. When Google Adsense first hit the ground running, they were providing LARGE payouts per click. If you were not around several years ago…you didn’t see this, but there were bloggers making an obscene amount of money with very little traffic. What this caused was a massive influx of new bloggers riddling their blog space with Adsense ads. Over time, the market became saturated and you no longer see the gigantic checks of the past without a massive amount of traffic (see Shoemoney.com for his 200k+ check from Google).
So what did Jeremy at Shoemoney figure out that the rest of the Adsense wave riders didn’t? He realized that the wave was not going to last for forever and he started diversifying his business so that…when it did go away…he had other aspects of his online venture pulling their own weight.
The reality of any successful business (why do you think Pepsi and Coke sell more than just cola) is diversification. The side effect is that…by diversifying your income streams online (affiliate, direct, pay per click, informational products), you do not have to make as much money from just one source! Just think…what if you were making just 600 dollars a week from each online revenue source…
Seems a lot easier than making 2,400 a month from just one source doesn’t it?! On top of that, if the well ever dries up on one source, you still have several others performing well to pick up the slack.
The same can be said for blogs. What if you have 3 blogs all bringing in income? And each of those blogs have several sources of income on their own?! Starting to see the big picture?
Warning: After reading that…you will feel the need/desire to go out and start several more projects. DO NOT take on more than you can handle at one time. Slow growth is the best growth and if you can not give all of the projects the attention they will need…do not start new ones. Diversification is key, but spreading yourself too thin is worse.
One of the major mistakes a lot of bloggers looking to make money off their blog make is relying to heavily on one income source. They find an area of their niche that becomes a little bit profitable and they beat that into the ground. Once it goes away or competition increases, their entire revenue decreases dramatically. You need to continue to experiment with as many ways to make money with your blogging as possible and continue to diversify your offerings to your readers for long term blogging success.
Some examples of blog monetization sources:
- Pay Per Click (ex. Adsense, Chitika)
- Pay Per Action (Market Leverage, AzoogleAds)
- Affiliate Income (Clickbank, Commission Junction, Share-A-Sale)
- Informational Products (Selling your own ebook like Ramped Reviews)
- Direct Advertising
- Contests and Promotions (Charging a fee for contents and promotions)
- Review Products
As you expand your offerings while still providing value to you readers, you will start to see your blog income increase dramatically and you will not be dependent upon one source of income. If you look at any of the highly successful bloggers online, you will start to notice that they are applying this technique for long term success and it is that same technique that you need to apply in your blogging to make sure you are profitable in the long run. Without diversification, most companies will fail…with diversification…you can continue to expand and grow with your readers.