Does this blog earn money?  Why doesn’t it have ads on it?*  Why don’t I put affiliate links on all my mentions of products I’ve used successfully?  I get these questions on a fairly regular basis, and thought I’d put up a post to answer them.

Most recently, Sunil Tanna (a pretty smart guy when it comes to Internet marketing, and direct competitor of mine**) asked the following on the Business of Software forums, after I had mentioned that I personally don’t see value in putting affiliate links on my blog.  (An affiliate link is one where, if you the visitor make a purchase after clicking on that link, I am paid money by the person selling the product to you.  They’re also called Cost Per Action, or CPA, advertising.)

Unless the only things that you’re ever going to write about is your own product  – and your own product completely and finally caters to every single visitor’s potential needs, you’re missing easy incremental revenue [by not including affiliate links].

For example, all those, or at least some of those mentions on your blog of Adwords, PayPal, payment processors, SEO tools, domain registrars, hosting, etc., could be earning you extra money in addition to whatever you get from selling your particular niche software product. Since you’ve written the content anyway, why wouldn’t you want to get paid for it?

Now, Sunil (who, I reiterate, is a pretty smart guy) has a very different take on doing business on the Internet than I do.  I don’t aggressively monetize this blog both because I don’t think it would be effective at making me money and it wouldn’t mesh well with my general business philosophy.

What I Get Out Of Blogging

I don’t see blogging as an income generating activity.  I think of it more as an investment — do the work now, reap the benefits later.  All of the benefits flow directly from you.  That’s right, you.  Whether you’re reading this blog for the first time today (rather unlikely, given my typical traffic), have had me in your feed reader for a few months, or are part of the uISV blogging community and we have been reading and commenting on each other’s blog for years (scary thought!), this blog is written for you because, without you, it would be a pretty lonely place around here.

Now, quick show of hands, how many of you would be interested in reading the Make Patrick Five Bucks By Acting On This Post blog?  Yeah, that’s right.  There is no reason for you to read that blog, whatsoever.  If you stumbled upon it the first time, you wouldn’t be coming back.  If you had been reading me for months, I’d be out of your feedreader in a week.  If you were linking to me on a regular basis, you’d be asking yourself “Is there anything for me in this?  Is there anything for my readers in this?  No?  Why am I linking?” 

Intrinsic Value — Writing for writing’s sake.  Despite being an engineer, a field which has a distressing tendency to not talk with people, I consider myself a professional communicator.  I love talking and I love writing, and I like to consider myself fairly decent at both, and above many things in life I crave praise for the two of them.  As fun as it is to write in a paper diary (I have tried — never found the patience) and speak to an empty room, having an audience makes it a much, much more pleasant experience.  Chris Rock’s riff about women needing food, water, and compliments pretty much applies to me as well — when I write something which I know is good that is a happy day for me, but when someone tells me that I have written something good, that is happiness squared.

Opened Doors — They apparently teach you three words in business school — networking, networking, and networking.  Blogging is a great supplement to the professional networking that happens in the ordinary course of my day job.  (For one thing, it is very hard to network with Americans from a rice field in central Japan unless you use the Internet.)  It brings me all sorts of opportunities, both the ones useful in my continuing quest to improve Bingo Card Creator and ones which will be useful in my future endeavors.  For example, having a blog has helped me integrate myself in the uISV community (who are constant source of advice, moral support, and — in distant third place — backlinks for me).  I am extraordinarily fortunate to count other successful businessmen, such as Andy Brice, Nick Hebb, and others too numerous to name as professional colleagues.

Establishing Myself As An Expert — It is sort of scary to contemplate, but at some point in the last year I transitioned from “mediocre programmer with a tiny business” to “mediocre programmer with a tiny business who generally knows what he is talking about”.  That is a sort of useful thing for me, as I contemplate the overall arch of my career.  I suppose I could, theoretically, grind my way up the Japanese corporate ladder, but I don’t see myself doing it for the rest of my life.  (If I did, that would be a short, short life — the hours would grind me to bits.)  When I start the Next Hurrah, I don’t exactly want to be Mediocre Programmer++. 

Happily, the blog is sort of a portfolio of all the things I can do that your average Mediocre Programmer can’t.  This leads to people throwing all sorts of opportunities my way, which I’m always humbled and happy to receive.  I have gotten, at last count, eight job offers from readers (but for the day job and my own business, I would probably have accepted several of them).  My collaborations with Google on the Conversion Optimizer case study and with Steph on his blogging book both flowed pretty much directly from the trust I had built up here.  Neither of those pays money, either, but they enhance my status as an expert and will make it easier to convince the next decisionmaker that I am the right guy for the job/opportunity/investment/whatever.  (The bosses at my day job were also extraordinarily pleased with the Google thing, believing that having an “in” with Google is in their best interests.  They have given me explicit permission to continue my uISV adventure since it keeps increasing my value to them, and that in itself is worth every hour I have spent on this blog and then some.)

What I Would Have To Do To Monetize This Blog

To monetize this blog, I would have to burn my hard-won trust with my readership and contacts to convince them to clicky-clicky on the little blue thingees and then hand over money to whoever was on the other end of the link.  Sunil thinks that is an option I could just tack onto my blog as it exists right now.  I think it would end up replacing a lot of the value that this blogs brings to you, and end up eroding your trust in me.

Let’s look at what I would have to do.  First, the affiliate model is very sensitive to the type of content the links are embedded.  Big theory pieces, which are consistently my best work (you’re reading one of them), cannot be effectively monetized because they are not product-focused.  Tactical suggestions, such as writing SEO tips or why guarantees are successful, are extraordinarily popular with my readers but also don’t bring home the bacon.  Updates on how Bingo Card Creator is doing or what is new in the business, which are some of my favorite ones to write (who doesn’t like bragging?), also don’t include easy opportunities for affiliate links.  I suppose I could put an affiliate link to e-junkie in the “e-junkie: $5″ line item in expense reports, but would you click that?  No, of course not, no reason to.  You’d need to be convinced to, and to do that I would need to pollute my blog with…

Product Reviews

Now, I do occasionally plug products or services that I have found worthwhile or that I think you would find worthwhile.  I almost never review something just to review it — heck, it has been jokingly suggested that I am the local e-junkie sales rep and I am having difficulty remembering whether I ever did a full post about e-junkie as a totality, as opposed to the limited intersection of e-junkie with Bingo Card Creator.  But what if that weren’t a joke?  What if I were the local e-junkie sales rep?

First, I’d have to heavily editing the content of my reviews.  I would have to start consolidating the reviews into single posts (need enough information to make the sale all in one place to maximize conversion rates), start optimizing the link placement (believe me, that isn’t a consideration I want in my mind as I’m writing), and I would have perverse incentives to review the most rewarding products instead of the ones I find most useful.  For example, e-junkie pays $1 a month per referred customer, is useful to only a fraction of my readership, and is the best thing since sliced bread, Random Marketing E-book pays $15 per customer, is theoretically useful to most of my readership, and is likely a great steaming pile of hucksterism.  Higher conversions times higher payouts equals more money, but at what cost to your trust in me, and for that matter my ability to sleep at night?  I don’t want this blog to become one of the Make Money Online blogs, which is… 

… largely a bunch of guys talking about how wealthy they are, leading inexperienced newbies on, pretending like someday they’ll reveal their “big money” secrets, and you’ll be wealthy too. In reality, they just use their blogs as newbie traffic channelers, selling it off to the highest bidder. The newbies take forever to realize that they ARE the “big money” secret the author has.

(Quote from SlightlyShadySEO, whose blog is worth reading for ideas even if the black hat tricks are antithetical to everything I believe in.)

Even if I weren’t to slide all the way down the totem pole to the cesspool that is multi-level ebook marketing, would you really like it if this blog’s priorities were set by affiliate payouts among tools I actually like?  Let’s see, e-junkie is $1, Slicehost is $20, AdSense is potentially a lot — write more AdSense posts!  (If I ever tell you to start using AdSense as a uISV to sell advertising, as opposed to buying advertising using AdWords, I’d be doing you a tremendous disservice.  More on that some other day!)

Quick Mercenary Math

OK, here’s the point where Sunil might actually agree with me: assume, for the sake of argument, that my blog readership does not decline due to monetization initiatives.  The merchant pays out a portion of the sale — how much depends on a lot of factors, but 30% is a decent baseline for many products.  When I typically suggest folks try out a particular product or service, that link gets about 15% click through.  Let’s assume you trust me slightly more than the average bear, so you’d convert at about 5% based on my say-so and the relative utility of the product in question.  These factors are multiplicative, so one view of the post gets about .225% of the purchase price of the item.  For a $50 product, that means the eCPM (revenue earned for 1000 views) is about $112.50.  (In actual fact, I’d probably get $40 to $50 if the post was about as successful as my average posts here, given my readership.)

 $50 is two sales of Bingo Card Creator.  Instead of keeping 30% of the sale price and dealing with unknown conversion rates, I keep about 96% and have a very, very good idea of what will send folks who actually would benefit from using the software.  Rather than spending the time optimizing one of my posts so that Vendor X can make 70% of the results of my labor, I should spend the same amount of time, anywhere in my business, to increase my effectiveness at doing anything by a half a percentage point.  Heck, I could do that by writing a single bingo card — about Valentine’s Day, for example.

So This Blog Doesn’t Make Any Money?

Now, in point of fact, there are a couple of posts on this blog that consistently make me money.  One is Free Bingo Cards, which is the most popular post on this blog by a factor of “lots”, and which probably generates about $100 to $200 in sales a month.  It is written to provide something of substantial interest to my target customer, and does it admirably.  That isn’t the only reason it was successful — many of my uISV friends took it upon themselves to link to it (after Ian Landsman did likewise).  This is goes right back to what I was saying earlier about trust — if most of my big successes are because my readers or my customers trust me, why should I sell them down the river for short-term financial advantage?

A Word Of Thanks

As I mentioned earlier, one of the primary reasons I continue to stay up to, hmm, 1:50 AM writing updates to this thing is by the Non-Financial Support of People Like You.  (Note to non-American readers: you are more fortunate for not getting the joke than the folks who got it.  They had to sit through some really excruciating television.)  Thanks for your emails, comments, words of praise, and criticisms over the last year and change.  And thanks, most of all, for reading.  It means more to me than the money ever could.

* WordPress does, occasionally, put Google AdSense ads on this site.  I really wish they wouldn’t, but wasn’t too careful when reading the contract I clicked through when I signed up.  The main consumer of that advertising spot is… me.  One more reason for you to host your own blog when you are starting out!

** Some folks might be suprised with me linking to a direct competitor. If you intuitively understand why this prospect does not worry for me, I have a funny feeling we’re going to get along great together. If you don’t, explaining would take more space than the rest of this post together, but it boils down to that I wouldn’t have a business worth competing with if I was routinely small-minded about such things. The trust and authenticity this philosophy engenders are much harder to duplicate than my program.