How many ways does your blog earn income? For too many bloggers, the answer is one. Unfortunately, few if any blogs can make serious income with only a single stream. It takes multiple income streams, from different methods, to generate a livable income from a blog.
In the past I’ve written about 3 ways to create more revenue from your blog. This post takes a bit of a different tack. Instead of telling you how to make more money, it will outline the five primary ways blogs earn money. You can then examine each method and decide which works best for your particular blog.
1. Advertising Network
Signing up for a display advertising network is the most common form of blog monetization. It involves the blogger enrolling in a display advertising program such as Google AdSense, creating ad templates, and placing the code on the blog. Google then automatically finds advertisers that fit with the blog and serve those ads.
The advantage of joining advertising networks is that they are easy to implement. It takes just a couple of minutes to set up, and from there the network will automatically serve you ads. Even performing analysis and maintenance is relatively easy, since the network will typically provide you with basic analytics. There is very little resistance.
The disadvantage is that ad networks don’t pay very well. Low-traffic, and even medium-traffic, blogs might earn just pennies for every thousand ad impressions. That is, for every 1,000 visitors who see the ad, they might make only 20 or 30 cents. Larger blogs can earn higher rates, but even then they need massive audiences to reach sustainable levels of income. Display advertising networks are best left for supplemental income, rather than primary.
2. Direct Ad Sales
The problem with ad networks is that there is an enormous supply of blogs on which to advertise. Those high supply drives down rates. Additionally, since advertisers can’t be sure exactly where their ads are displaying, they’re not willing to pay premium rates. Finally, the ad network takes a chunk of the rate, sometimes 50 percent. That leaves the blogger with little left.
Another option is to reach out to businesses directly for ad sales. This cuts out the ad network as a middleman, entitling the blogger to a full share of the revenue. It also allows bloggers to have control over what ads appear on their sites. This allows them to find advertisers whose products lineup with the bloggers’ audiences. With more relevant ads and no middleman, bloggers can earn much more from direct sales than from ad networks.
Unfortunately, direct ad sales take considerable time and effort to find and negotiate. Bloggers have to find companies willing to advertise, and then negotiate terms. Many, if not most, companies have no interest in selling just a few thousand impressions per month, so bloggers often need to team up in order to bring the advertiser a larger number of monthly impressions. So while direct sales can boost income considerably, they also take far more work up front. For many bloggers the trade-off is not worth the hassle.
3. Affiliate Sales
The word affiliate marketing has turned into a blogging buzzword, and for good reason. Top affiliates earn six-figure incomes, usually driven through simple websites and blogs. Bloggers seeking an income boost might look to affiliate marketing as a holy grail. While it can provide bloggers with income unattainable from ad networks, affiliate marketing requires enormous effort.
Affilate sales work in a simple manner. Retailers, seeking to boost sales, offer affiliates a commission for each sale they refer. Affiliates refer sales by placing links and other ads on their websites, thereby driving traffic to the retailer. Bloggers can enroll in a number of affiliate programs simultaneously, usually through a third-party service such as Commission Junction. But the practice of affiliate marketing isn’t as simple as placing a few links on a blog.
The key term is “marketing.” Bloggers who want to become successful affiliates must actively market the products and drive readers to click those links and buy those products. Otherwise customers will just glance over them as they glance over many links in blog posts. Successful affiliates must understand what their readers want, and then find a way to drive them to those wants.
4. Reselling Products
With affiliate sales, the blogger only has to refer the sale. Once they drive the customer to the retailer’s site, the retailer takes control of the sale. The blogger can therefore focus all efforts on driving users to the retailers’ sites, through affiliate links. When reselling products from wholesale, bloggers are responsible for the entire sales process. Yet they reap higher rewards when successful.
Bloggers still need to market the products they resell, but they also need to close the sale as well. This means setting up a sales page and collecting billing information. It also means setting up a merchant services account with a payment processing company such as Intuit, so that customers can pay with credit cards. Since the blogger is handling the sale, the blogger needs to establish credibility with the prospect. That requires a level of branding and marketing that affiliates do not need.
At the same time, the commissions for reselling products is much higher than the commissions for referring affiliate sales. This is true even after account for shipping costs, which the wholesaler typically bears and charges to the reseller, and the transaction cost charged by merchant services. That is, the additional effort comes with a much larger reward.
5. Direct Product Sales
Finally, we have the most profitable means of blog monetization. In three of the four methods outline above, there is a middleman involved. The middleman takes a sizable portion of any sale, leaving the blogger with a small but considerable commission. The only exception, to this point, is direct ad sales. But without considerable scale, that avenue isn’t open to most bloggers. Perhaps their greatest income opportunity rests with direct product sales.
Typically when bloggers sell products, they are of the information variety. An information product can be an ebook, an e-learning video, a podcast, a webinar, or any other vehicle for disseminating information. The blogger then sets a price to the product and sells it directly to the consumer. All the money from the sale goes directly to the blogger’s bank account, minus the transaction fee from merchant services. It adds to the greatest profit potential of all available methods.
In order to create a successful information product, a blogger must leverage her unique knowledge into a teachable forum. The blogger must present information that readers cannot find elsewhere, or else present the information in a novel manner. She then must spent time and money marketing the product. But when she makes a sale, she reaps all of the rewards rather than sharing it with middlemen.