Sunday, April 26, 2009

The Economics of Blogging

A Wall Street Journal column last week by the Democratic Political consultant Mark Penn, "America's Newest Profession: Bloggers for Hire", alleged that 452,000 Americans made their living by blogging. One professional blogger, Megan McCardle, explained on her Atlantic blog why this estimate was "addled" ("Blogging for Big Bucks"):

The estimates of professional bloggers seem wildly inflated--if you help update the company blog once a week as part of your marketing internship, you are not a paid professional blogger. And the numbers they themselves link to tell a much different tale from the article: most blogs bring in pitiful amounts of money for their owners.

This seems to follow the model of Mark Penn's book: find some bizarre number and mindlessly extrapolate it to an absurd conclusion. Yet I still don't understand why common sense did not keep him from publishing this article. Anecdotal evidence would suggest that almost all of us know many more computer programmers than professional bloggers--this is true of me even though I am a professional blogger, as are half my friends. Or he might have called some professional bloggers, who would have (sorrowfully) told him that no one is making $75K a year off of 100,000 pageviews a month, that being about how much traffic I pulled when I was starting up in 2002. Or, hell, he might have noticed that in the very BLS survey so nicely transformed into a table for his article, there is not entry for "blogger"--but that if you add up every writer, reporter, editor, PR person, technical writer, or "media and communications worker, other", there are only 499,890. Since Penn says that there are 452,000 paid bloggers, this implies that 9 out of every 10 communications workers are professional bloggers.

There may be one guy with some incredible niche--or moronic employer--making a ton of money with a modestely well-trafficked blog. But the plural of "anecdote" is not data.

Believe me, I'd love to think that blogging is a surefire path to riches and job security--but I'm afraid all most people get out of their blogs is the satisfaction of a job well done.

Coincidentally, a few days after reading Megan's post, I discovered the newest blog by Daniel Wahl, The Nearby Pen ("helps you live a happier and more productive life by sharing good art, reviewing good books, and explaining good thoughts") which included a post ("AdSense Pennies Make Dollars") that unintentionally supported Megan's point about the paucity of bloggers who make significant money from their blogs. In his post, Daniel mentioned the revenues he had generated from his three blogs over the last few months:

Not only will I not be making loads of money with Adsense, but at this stage of the game I should not expect to.

So why use Adsense? Quite simply, because--as the title suggests--pennies make dollars. Or to put it differently, a little bit of money adds up, even if little by little. And who knows, perhaps those pennies will grow faster with traffic at each site. In my view, it pays (at least a little) to learn more about how advertising on one's blog works while the blog is growing. I also think it is interesting. Here's the data for my first three months:

January...........4,291 page impressions...........$1.97 earned
February..........4,242 page impressions..........$3.62 earned
March.............4,411 page impressions..........$11.15 earned

This is no knock on Daniel -- I'm sure if I were using Google AdSense my ad revenues would be as low or lower (which is one reason why I never signed up for them) -- but it underlines Megan's point about why Mark Penn's estimates seem dubious. As for Daniel's point that pennies make dollars: sure, but time equals money, and, for most of us, there are much more remunerative uses of our time than blogging. So why do it? I mentioned one reason in my first post: to attract a few commenters I could get feedback from and bounce ideas off of. Another reason is the same reason most callers call talk radio stations, or letter writers write letters to the editor of newspapers: to express opinions. I have gotten a couple of ideas from writing this blog (or, more accurately, from observing the responses to a handful of posts), and one or two of those ideas could lead to a business opportunity down the road, so, in that sense, this blogging might end up being profitable as a form of brainstorming, but that remains to be seen.


DaveinHackensack said...

From Matt Miller's bio, he appears to be smart and well-connected -- Brown, Columbia Law School, former White House fellow, etc. -- but not as young as I suspected (he's 47).

DaveinHackensack said...

Please disregard the comment above, which I meant to leave in the thread of the previous post.

A keen observer said...

With 'The nearby pen' Daniel has hit the trifecta.

THREE separate blogs that have virtually ZERO comments except from himself.


DaveinHackensack said...

I don't have too many comments myself.

Stephenie Meyer said...

"sharing good art, reviewing good books, and explaining good thoughts"Well...good, good, and good!

Good blog. Good writing. Good use of adjectives. Good imagination.

Sivaram Velauthapillai said...

The money will likely never support the amount of time put into an average blog. Unless one is focused on attracting huge number of readers (probably requires a mass-market blog), or is focused on making money (probably requires one to plaster their page with ads), I suspect the income will never be sufficient.

What is hapening now, in my opinion, is that advertising that used to go into tradtional large media (say television, newspapers, magazines, etc) is flowing to internet and blogs. So far, the traditional media companies have had difficulties capturing the advertising on the web. So amateurs and average bloggers probably get paid more than what is feasible in the long run. But once these large media sources start capturing the advertising spending, I suspect a typical blogger will make even less money. Like most new products or industries, I suspect compensation for the few that are involved is high; but it will likely deflate over time.

To sum up, 452k Americans living off blogging sounds like an exaggeration. That is probably more than all the OEM autoworkers (excluding mechanics, dealdership workers, etc) and that seems too high...