I have shared a lot of my financial details on this site including my investment strategies, my growing net worth and even a secret business I want to open up, but I have never discussed how this blog operates as a business.  Until today.  I have no real interest in running the type of blog that really “teaches” how to blog I wouldn’t find it interesting enough to keep it up; The Financial Blogger does a 1000x better job than I ever could (he also makes a lot more than I do and clears a good amount more).

First and foremost, I tell 3 things to every new blogger who emails me:

  • YOU HAVE TO BE PASSIONATE ABOUT WHAT YOU ARE WRITING ABOUT
  • YOU ARE LIKELY NOT TO MAKE ANY MONEY FOR A VERY LONG TIME SO SEE RULE #1
  • AT FIRST YOU WILL HAVE TO CONNECT WITH OTHER BLOGGERS TO GET ANY TYPE OF TRACTION

I had to learn those rules the very hard way 4 years ago but it has been AWESOME and something I don’t see myself giving up for a long time!

The Ways to Make Money Using Your Blog

This is just going to be an introductory post but will be happy to answer specific questions in the comment sections.  Some definitions/Acronyms first:

  • CPC – Cost per click.  Means every time a reader clicks an ad the blogger gets paid
  • CPA – Cost per action.  Means every time a reader clicks an ad and then acts on the new page opened up the blogger gets paid
  • CPM – Cost per Thousand Views. Means every time the page is loaded the blogger gets paid.

Contextual Advertising

Contextual ads try to figure out what’s on your page and then put up a relevant advert.  Google Adsense is a fantastic example.  Bloggers simply have to drop the code on their site and boom google does the magic.  It pays out either in CPC or rarely in a CPM format.  I haven’t encountered an CPA type contextual ad but if anyone knows of one I’d love to know about it.

Affiliate Advertising

Affiliate advertising is when a blogger links to a particular service or product.   Generally, these are CPAs but I have started to encounter more and more CPC affiliate relationships.  Most CPMs would probably fit here too since you are being paid to place a very specific service or product on a particular page or post.

In addition to working with specific companies one can work with an affiliate manager. I use a couple but these companies usually have a relationship with hundreds if not thousands of advertisers.  So instead of having to deal with hundreds of 1099s you can deal with just one from a company that has already negotiated the deal with the company you’d like to link to.

I am very hesitant to enter into single company affiliate CPA relationships for two reasons. I don’t want tons of 1099s and I think the temptation for the company to erase my sales are just too great.

I AM TERRIBLE AT MONETIZING WITH AFFILIATE ADVERTISING.  I have tried to hire people in the past to help me, but it has never worked out.

Private Advertising

Generally this is a flat fee for a spot on the home page or a link in a post.  The link could be text in nature or it could be a banner ad.  Text links are a no-no for Google, but google is not the government so it is not illegal but you are playing with fire.  Google is very good at what it does and if you take that low hanging fruit it is very likely that you’ll be caught and then you’ll lose your search engine traffic and ranking leading to you basically starting over in terms of monetization.

Selling Your Own Wares

Most people think that if they put an ebook on their site they’ll make a passive income and be able to retire. Hell, most people think if they put their words on the internets they’ll be able to retire in Hawaii.  Neither is true.

That being said, many bloggers (not me) have created their own content in one of two ways.  The first is a premium relationship package (I Will Teach You to Be Rich is KING of this) and the other is in the form of an e-book.  Personally, I think most ebooks are terrible but there a few gems out there (I will be reviewing one next week for my buddy Matt at Dividend Monk which is fantastic and long).

 

If You are a blogger which monetization methods am I missing? If you are a reader did you learn anything about how a blog works?