Saturday, April 19, 2008

Blogging is Awful for Making Money Online - Unless...

Ok, so I said previously that blogging was a time-sink, that it wasn’t self-sustainable and that you’d be hard-pressed to make a fortune in actual Passive Income from it. All of that is true.

With one exception.

You can create a successful blog site, and never have to post a thing. Remember, blogging is a huge phenomenon, and there are thousands of new bloggers coming online every day. Why not set up a blog site where you invite others to blog on a shared topic? Set up the blog for them, tailor it to the blogger’s preferences to make sure they’re happy, and then let them loose! You host it, you make the ad money, and your bloggers work diligently to add fresh new content every day.

Impossible, you say? Not at all. You just need to find a way to make it worth their while. Whether this means some sort of revenue-share (I frown on this, just because the accounting is often nightmarish) or some more creative means of compensation… maybe you set them up with a snazzy, professionally-designed blog, tailored precisely to their tastes. Or maybe you give them some kind of freebies – a nice email address on a cool domain for instance. Or you can do what I did on one of my sites – I sent each blogger free products to review, and they posted a new blog entry every few days, with a review of each product. These products don’t even need to be “physical” things – you can send them digital ebooks to review, or get them trial accounts into other web sites… be creative! As long as the blogger is getting something of value from the experience, they will be happy and productive, and you’ll keep getting free, daily content for your site.

Blogging on your own = bad idea.

Setting up a blog site and having a dozen other people blog for your site = brilliant.

Wednesday, April 2, 2008

Why Blogging is an Awful Way to Make Money Online

Following on my “Why You Will Never Be John Chow” post, I thought I’d touch a little on why I believe blogging is an absolutely horrible way to make money online. First though, let’s talk a little about the difference between Active Income and Passive Income. (These are my own personal definitions, by the way – others use these terms in different contexts, so don’t get them confused).

To me, Active Income is money that you make as a direct result of X-amount of work. Some examples would be:

- salary from a 9-5 job
- hourly wages from contract work on the side
- $20 you get for mowing your neighbor’s lawn
- selling a $50 product and earning $15 in profit

Passive Income, on the other hand, is money that you make without having to lift a finger… money that comes in 24x7, day or night, weekends and holidays included. These include:

- interest earned on a savings account or money market fund
- money from online advertising on your web sites
- recurring revenue from online subscriptions
My goal, with all of my web sites, is to make all, or nearly all, my money from Passive Income. And, so far, that’s generally what I do. About 95% of my monthly revenue comes from online advertising spread across my various web sites. I get paid every time an ad is viewed or clicked, and I serve hundreds of thousands of ad views every single day. Whether I’m at my desk working or if I’m sleeping or eating or on holiday, or doing whatever, I’m earning money, 24x7. I don’t have to lift a finger to earn that money.

Ok, ok… so you want to make the vast majority of your money with Passive Income. Fine. So why is blogging so awful?

Well, in my view, maintaining a money-making blog just isn’t Passive Income. All of my web sites are 100% self-sustaining. Traffic comes in whether I update them once a day or once a month. I specifically chose to build web sites with this in mind.

A blog, on the other hand, is a huge… a HUGE… time-sink. If you don’t update your blog every day, or at least every other day, it will be considered stale and visitors generally won’t return to your site again and again. So its an enormous time commitment to have to write at least 1-2 posts a day. And unless you’re a fairly skilled writer, its damned hard to write that much and still keep things fresh without just rehashing the same ideas again and again.

So for me, blogging isn’t Passive Income – even if you do get your money from online advertising. Its not quite Active Income either – since the work you do isn’t tied directly to the money you make - but its something in between. (Yes, I realize the irony of me blogging about making money online, and bad-mouthing the practice all at the same time… but then again, I don’t make my money from blogging.)

Personally, I would much rather build a self-sustaining web site and update it once every few weeks – if even that – and just let the ad money roll in. What kind of web sites are self-sustainable? I’ll cover that in another post. :-)