Don't quit your day job

An interesting tidbit from Guy Kawasaki's wrap-up of his first full year blogging. The key part is bolded. Note that his blog has been consistently between the 35th and 45th most popular in the world, according to Technorati. Here are some of his stats:

• 2,436,117 page views for an average of approximately 6,200/day. 21,000 people receive RSS feeds via Feedburner and 1,457 receive emails via FeedBlitz.

• 21,000 people receive RSS feeds via Feedburner and 1,457 receive emails via FeedBlitz.

• Total advertising revenue: approximately $3,350 = $1.39 cpm. (This assumes that I can get Google to pay me. I’ve tried several times during the year to get my snail mail PIN so that I can get paid, but I’ve never received it. I don’t mind Google getting the float...)

So just to review, that's:

A best-selling author and genuine tech celebrity writing a thoughtful essay nearly every workday on a top-50 blog for an audience of around 30,000 people/day.

And the pay for that is about $280 a month. If Guy can get Google to write a check at all.

Just another reminder that the reason to be a Long Tail producer is not direct revenues. Instead, it's exactly what Guy uses it for: marketing for his books, VC firm, speeches and consulting. For which he's exceedingly well paid. Indirect revenues rule!

(Note that he has since switched from Google Adsense to John Battelle's Federated Media, presumably to get higher CPMs. Although why a wealthy VC like Guy cares about such trivial ad revenues at all is not clear; perhaps it's for the first-hand learning experience in the web ad economy, a land of skim milk and honey flavoring.)

UPDATE: Many interesting comments, including from Guy himself. The general theme seems to be that Adsense is for suckers, and that most people with a little effort can do better (more stats at the Data Mining blog). That's clearly true from the commercial operations with their own ad sales forces, such as Gawker and Weblogs Inc, and it's true for those high-profile, high-traffic bloggers who can interest the boutique ad networks such as Federated. But it's not much of a solution for the Long Tail producer, which I would define as the anyone outside the top 1,000 or so. BlogKits has a good post on this that offers some alternatives, but I still think that there's a lot of opportunity for ad networks that offer the scaleable, automated DIY appeal of Adsense but the higher CPMs of a boutique network.

Also, one interesting thing to note is that Adsense is mostly text ads, which I suspect people are starting to tune out, while the boutique ad networks tend to use banners, which have enough visual variety to still catch the eye. Banners have traditionally been part of the pay-per-impression model (best for branding), while text ads are pay-per-click (best for transactions).

In our excitement over the transaction-based Google model, we've tended to overlook that branding is still about half the ad market, even though it's hard to measure the performance of those ads. The old problem with banners is that it's hard to create enough variety ("inventory")  to do proper targeting, the way Google does with easy-to-create text. But maybe the market has matured enough since the dot.com era to allow banners to scale down the Long Tail without becoming random clutter. Could the growing recognition of Adsense's limitations lead to the comeback of the banner?

Comments

[Guy Kawasaki]

Chris,

I care because

1) My mother taught to never leave money on the table.
2) It's a way to keep score and not fall into the trap of doing things for bull shiitake "strategic reasons."
3) I can tell Web 2.0 entrepreneurs that they're on drugs if they think they can depend on an advertiing model because of my first-hand experience.
4) I use the ad revenues, Amazon Associates fees, and jobs-board fees to pay for my hockey obsession.

Guy

[GrahamHill]

Chris

I was just thinking about the VC not leaving money on the table argument when I read Guy's comment.

There is also the subtle evolutionary psychology of punishing those who don't keep their side of the cooperative bargain. This often happens, although we are not always cognitively aware that we are doing it. We do it because we are, well, human.

Graham Hill

[Mike Abundo]

If you live in the Philippines, $200/mo. is a salary. And some Filipino probloggers can make seven times that.

[Robyn Tippins]

Were Guy's blog well monetized, he'd be making $2k-ish per month. I have blogs that have less than 500K page views per month that make $250, easily.

[Ralph Grabowski]

I feel rich!

I make about $150/month from Google ads, with an average of 1000 page-views a day.

I wonder if the difference lies in the category of ads. My blog (worldcadaccess.typepad.com) deals with computer-aided design software, and perhaps those advertisers pay more against each other.

In my case, the ad revenue goes towards paying my Internet costs, about $1,300 a year.

[Easton Ellsworth]

I'm glad you posted this, Chris - it certainly is interesting that Guy Kawasaki's blog hasn't made outlandish sums of money from online advertising. Good thoughts. Robyn is right that Guy's blog could probably make much more from advertising. I think the "don't quit your day job to blog" advice is a great warning to take into consideration before starting up a blog with intent to monetize ... but there are plenty of blogs making $5-10 (or more) per thousand page views. For example, Know More Media (I'm an editor there) has 29 blogs with $10 cpm or higher over the past three months, and five making more than $30 cpm in that time. At $10 cpm, Guy's blog would have gotten over $2,000 in revenue just last month and more than $24,000 in all so far - about *7 times more* than what he's made so far. I'm just saying that there is hope out there for the new blogger hoping to make some good money via advertising.

[Thomas Hawk]

At issue here isn't how little money Guy made, but how badly Adsense sucks for the blogger.

My blog gets less traffic than Guy and makes considerably more money. And all I'm doing is working with FM Publishing.

$1.39 per CPM is quite frankly a joke.

[Pramit]

On a lighter note, Another option would be to shift your blogging jobs to India. Some Spam Blog networks are thriving out there.

[Jeremy Zawodny]

Chris, I have to agree with some of the others here. The only real conclusion you can draw from this is that Guy hasn't tried very hard to make money with his blog. AdSense is, for most bloggers, "the simplest thing that could possibly work" not "the best way to make money."

In other words, many bloggers are quite content being able to cover their monthly hosting expenses (~$20/month), so AdSense is fine. There's no point in looking at alternatives. But with better (or more popular) than average sites, it's almost ALWAYS better to shop around and try alternatives.

Finally, when it comes to AdSense, I think Technorati is an almost useless measure of how much money one might make. This provides another useful data point supporting that belief.

[Trader Mike]

To echo what some others have already said above... I wouldn't come to any broad conclusions based off of Guy's ad revenue. My blog is currently ranked 6,306 in Technorati and I had just over 1.8 million pageviews in 2006. My monthly ad revenue is just about what Guy made for the whole year.

[Dave Johnston]

No offense intended - but as has been pointed out previously - Mr. Kawasaki's ad placement is very poor. He is leaving a LOT of money on the table.

[Nick Douglas]

Gee, Chris, I'd better warn the guys at Gawker Media and Weblogs Inc.!

[Brian Clark]

There are simple email newsletters that make $100 million a year via direct marketing (yes, $100 million). There's no reason a blog can't do the same. And scores of small business owners directly drum up respectable sales with regular content publication via email. Blogs are much more powerful from an attention standpoint, if properly utilized in context.

People need to get over advertising and start thinking about what makes sense for their particular blog. And I agree... Technorati rank doesn't mean anything (although I still check it incessantly just because the links actually *do* matter).

[aaron wall]

>My mother taught to never leave money on the table.
>It's a way to keep score and not fall into the trap of doing things for bull shiitake "strategic reasons."

If these are true, then why use AdSense to monetize your blog when you would make more using other monetization methods more synergistic with your personal brand?

[Jim Kukral]

What Aaron said.

Google Adsense A Huge Failure For Guy Kawaski’s Blog
http://www.blogkits.com/blog/?p=67

[Nick Carr]

Chris,

re: "Just another reminder that the reason to be a Long Tail producer is not direct revenues. Instead, it's exactly what Guy uses it for: marketing for his books, VC firm, speeches and consulting. For which he's exceedingly well paid. Indirect revenues rule!"

That will work for a small subset of writers, a subset that does not necessarily overlap all that much with the subset of writers who have the most interesting things to say. Will all the writing that survives, economically, be promotional writing of one sort or another?

Nick

[Martin Edic]

Its all about subject matter. My kitchen design blog has averaged $17 per thousand while my climate change blog is a fraction of that. Average kitchen purchase: hundreds of dollars. Average concerned citizen purchase? nada.
In spite of this I gave up on kitchens (boring) and pursue warming (important).

[Dave Doolin]

I read this somewhere (paraphrased): "Most wealthy people are wealthy because they buy their avocados on sale."

This was back in the day, in the midwest, when avocados were exotic indeed.

[Laurie]

I think the audience has a lot to do with it. Visitors to Guy's blog are probably far more tech savvy and less prone to clicking on ads than the "average" user. I have hobby blogs on fairly niche topics that don't even get 100k page views a month - even with decent forum community activity - and still average ~$250/month in adsense revenue from each.

[Logical Philosopher]

After reading Guy's post, I couldn't help think how much he was leaving on the table... I did some rough calculations last year when doing research and some of the sites in his hit range using Federated Media could bring him in $4-$5k per month if he worked it, and I calculated that was on the LOW side.

[Brian Clark]

Gee, Chris, I'd better warn the guys at Gawker Media and Weblogs Inc.!

Nick, how many more poor schleps have to be unfairly deluded before people stop holding up two businesses founded by millionaires as examples of "yes, you can do it too!"

[Rich Miller]

As others have noted, Guy isn't making his living off the blog, and it's not really optimized for AdSense. So while making something is better than nothing, he's still leaving money on the table.

Guy's got a compelling blog, as demonstrated by his traffic numbers. The modest blog revenue is not a knock on Guy, as the effort to fully optimize his blog is probably a losing effort, on an hours x revenue cost/benefit analysis, compared with other ways he can monetize that time.

If Darren Rowse were a wealthy VC and author, ProBlogger might look different. Instead, Darren's blogs are his livelihood, and it's reflected in the niches he targets and the way he monetizes them. He isn't from the Denton/Calacanis millionaire network builder model, either. There are plenty of other examples of indpendent writers with niche expertise who can earn a good living through their blogs. Blogs with lower traffic and lower visibility than Guy's can exceed the monthly revenue and CPM numbers he posted. Mine does, and there are plenty of other success stories. It's not easy, of course, or everyone would be doing it.

It's apples vs. oranges. Using Guy's blog revenue to make the "don't quit your day job" case is off target. Having said that, most bloggers shouldn't quit their day job.

[Habib Wicks]

I can't imagine that Guy Kawasaki is as stupid as his comments on adsense make him sound. People are talking about him, and that is critical for his brand-- he is after all the Tony Robbins of the venture world.

[Steve Weber]

What the fell? I earned more than Guy last year, and I don't think you can even find me on Technorati.

[francine hardaway]

I don't think blogs were ever designed to make money. I think they are a way of talking to customers, creating visibility, building a brand, and interacting with the universe. If you make a few thousand doing that, and it enables you to do something else, it's totally worthwhile. My own blog has made me a ton of new friends. Worth a lot more than Adsense.

[Michael Flessas]

On the other hand, some folks do a million dollar homepage (http://www.milliondollarhomepage.com/)and are set for life.

Hm. Got to wonder what Guy could learn from the other guy so far as marketing goes.

[PJ at Ferodynamics]

A few tips to get CTR higher:

http://ferodynamics.com/7-ways-to-boost-adsense-ctr/

Also, I think the $/click is rising.

[Guy Mc Paul]

I think that Guy's analysis is – in so far as cost/revenues are concerned - incomplete and somewhat too simplified. I deem that he should take into consideration this blogging activity into a wider perspective i.e. altogether with his other activities: principally writing books as well as being a speaker/evangelist, IT consultant etc. His great success as a professional is the result of the combination of all these activities and therefore it is pointless to enucleate only the costs and revenues of the blogging in order to check its convenience. Moreover, instead, he should ponder that – obviously not exclusively - thank to the efforts he puts in blogging he might probably sell more books, or be invited to give more speeches or getting some new professional assignments or corporate appointments. For example in his tiny “cost/revenues” statement among the revenues he should probably put “advertising savings”, since his blogging activity most certainly markets him better that any outrageously expensive marketing/image consulting company…
Even though I presume that his eclectic personality would be able to perform and obtain great results in any other adventure, I would not terminate his blogging. Besides not everything ought to be done for the sake of money, especially blogging whose main aim is enhancing visibility and creating contacts/consensus; and he is getting so much feedback - and that is in my opinion the greatest revenue.
However, ultimately, I personally believe that life is a matter of priorities and choices.

Guy Mc Paul

[Jeff]

I have to cry foul. Guy didn't optimize the location of his Google ad placements. He could have made a *lot* more money if he had.

John Chow wrote more about this Here/

[Nick Douglas]

Brian, those two businesses support dozens of writers including me. But since you brought it up, let me list other blogs that support one or more full-time writers: Dooce, Boing Boing, Perez Hilton, Jossip, the Huffington Post, Romenesko, TechCrunch, Daily Kos, Instapundit, GigaOM, Michelle Malkin, MAKE, Dealbreaker, several blogs at Mediabistro...

[Robin Haswell]

If I try really hard to think of any adverts I can at least partially remember, there are only 5:

1, 2, 3: The IBM, Sun Microsystems and Windows Mobile 300x300 flash ads at The Register (theregister.co.uk)
4: The similar flash and also interstitial Verizon ads at Slashdot
5: The Text Link Ads banners at Threadwatch (threadwatch.org)

[Rick]

Guy should start writing about travel or home remodeling; Then he could start making some serious ad sense cash!

[Brian Clark]

Nick, I'm not arguing against the proposition that blogs can make money. I make plenty more than Guy with my own blog. But as much as we might admire them, Nick and Jason are not the best source of inspiration for someone without substantial resources just starting out. Neither are Mike Arrington, Arrian Huffington, Om, Malkin, etc.

Kos and Perez, maybe. :)

Darren Rowse is a guy who truly started from zero and makes a very healthy living from blogging (ironically, NOT so much from Problogger). It's still not easy, but at least the guy hadn't cashed out of previous ventures before deciding to make a go at blogging. I think that better resembles the situation of the average person who wants to blog for a living, and even he doesn't rely purely on advertising. :)

[Trent]

The problem is that it is very, very difficult for long tail content producers to "break in." I have a blog (check my link) that received about 600K page views last month. I started in November and have already cracked the top 6,000 on Technorati. But I'm making about $0.50 CPM and the "good" ad networks won't even look at me simply because I don't have a name or an established reputation. I'm not complaining, merely stating a fact of life.

[Zeus Perez]

Dude, I feel so f-in pregnant. My tits hurt and my ass is on fire. I'm so glad I have this new Theramil ass solvent. I love my ass and when it's on fire it sucks balls.. What treatment are you guys getting for your ass fire?

Cheerio-
Zeus

[http://www.zeusdidit.com]

F-in a. Need a linkback.. Geez I hate spamming. Wait, this isn't the assfire blogs.. jeez.
http://www.zeusdidit.com

[Joe Holcomb]

>> "I can tell Web 2.0 entrepreneurs that they're on drugs if they think they can depend on an advertiing model because of my first-hand experience."

This statement has to be a joke? I know plenty of plain ol' affiliate marketers with less traffic that make far more from their ads with FAR less traffic that Guy gets on his blog. I won't even talk about the sub par optimization being done on most sites, oops I guess I just did.

Online advertising can be depended on as a business model. In fact a even sole purpose business model.

There are hundreds of companies, plenty VC funded ones in fact, that do nothing more than push other providers ad placements. Pick any middle market "me too" web search or contextual advertising company! Kanoodle, Miva, InfoSpace.... hell even MSN does it! Pick most content based portals, blog networks, etc. Yes, many have their own advertisers in many cases - however they are primarialy dependent on each others ads via XML push/pull in order to really pull in revenue!

Some companies pull hindreds of thousands of dollars, others millions, per month from advertising as a SOLO business model - without any advertisers of their own!!

Sorry but this statement by Guy shows me that he clearly doesn't understand the market and its overall monetization schema from an insiders perspective.

[Franck S]

Amazing. I've found this blog while I was reading Yaro's blog.

If you don't make money from adsense with such traffic, it's because you don't want!

I don't see another reason. Even if readership don't click on your ad.

Or maybe there is a mistake in the numbers?

Hard to believe.

[Matt]

In my sector (online dating and social networking) adsense can be quite lucrative. Markus Feind CEO of plentyoffish.com received a lot of press for his 900k adsense check. The check was for two months of serving adsense. Though his site gets tons of traffic. He has an alexa rank of 500, and online dating keywords pay well. Or at least they did six months ago.

I had the same problem getting paid from google: I never received my adsense pin. However, I re-requested my pin and did receive it the second try.

Best
~Matt

[peter]

Hmm... he can make over $5k/month