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March 10, 2005

Thinking Like a Publisher

It’s a good thing most bloggers have day jobs.  Many blogs including this one, fractals of change, look like mini-magazines.  We have content which either does or doesn’t attract readers and we have ads which, in theory, turn the readers into cash.  In my case I’ve earned almost $18 from Google AdSense and less than that from Amazon in a little over a month of publishing.  Fred Wilson, whose A VC blog is widely read, reports earning $500 in the last year.  This is real money to the Grameen Phone Ladies program which Fred donates it to, but certainly wouldn’t tempt him to leave the venture capital business.

Even though the revenue is what even an accountant would call “immaterial”, the fact that there are ads and that revenue from them goes up and down is fascinating.  It makes me think like a publisher – or at least like I think a publisher thinks.

Google pays on ad clicks – doesn’t matter if anybody buys something, just that they click.  The amount Google pays per click is some secret function of what bidders have paid for the keyword that made the ad appear in fractals of change.  So far the high has been $.98 and the low $.04.

The number of clicks is a function of how many people see the ad and how many people it appeals to.  So, in theory, if I write stuff that lots of people want to read and they find their way to fractals of change to read it, I will get more potential clicks.  That’s pretty much straightforward publisher thinking:  got to have content that attracts people and got to make sure they know it is there.

The “got to make sure they know it is there” part is interesting in the blogosphere.  Other than word-of-email which is hard to measure but real, readers find out about blogs either as a result of searches in search engines or from other blogs.  There is a fascinating network effect at work here: the more other blogs point to fractals of change, the more people come here to read it.  Since we bloggers can tell where our readers came from, we tend to read the blogs that point to us.  We point to blogs we read in our own blogs because they interest us and, to be honest, because it encourages those other bloggers to point to us.

As a result, there are self-reinforcing clusters of blogs which cover similar topics and presumably have readers with similar interests.  At some point, similar bogs may become competitors for reader attention.  But now, as each of us attract new readers to the cluster, readership grows for all blogs in the cluster. 

Just getting people to fractals of change is not enough.  Google also has to do a good job with its algorithm that figures out which ad to run with my content.  When I write about WiFi, the algorithm works pretty well and there are ads for routers and access points.  Probably the people who want to read about my nerding activities are interested in buying this stuff.  But, when I wrote about Reg FD, I got ads for FDR memorabilia.  I don’t think anyone clicked on them. Would have been better to have ads for securities lawyers.  The publisher in me wants to charge Google for the page views; I can’t help it if they ran the wrong ad.  But they make the rules in this part of the game.  Incidentally, if some of their customers gain just by brand exposure, then I’m giving that exposure free.  Ugh.

RSS creates a Tivo - like problem for us blog-publishers.  Our base circulation consists mainly of those who get RSS (Real Simple Syndication) feeds from our blogs.  People who use aggregation software like Bloglines, get updated feeds of the CONTENT of the blogs they subscribe to. This content doesn’t include the ads on the side panels.  Now how do we make any money?

Professional publications like the Wall Street Journal which offer RSS feeds, only make the beginning or summary of each article available.  If you want to read the whole thing, you have to click a link that gets you back to the WSJ site – ads and all.  That makes sense from a publisher’s point of view but partially defeats the purpose of RSS aggregation from the reader’s point of view.  Since I’m really a dilettante, I make the whole content available on the feed.

Another way a professional blogger – someone who needs ad revenue from his or her blog – could cope with RSS is to imbed the ads in the content.  Not that product placement is at all new but it is becoming more important in TV-land because DVRs make it so easy for the watchers to separate the content from the accompanying ads.  I do point to the place on Amazon where a reader can buy books I blog about but even this seems a little close to blurring some journalistic standard which may or may not apply to blogging.

None of this really matters to most of us blogger who – fortunately for us – aren’t in it for the ad revenue.  But I think blogging is becoming main stream media.  The best writers like the best singers and the best bands have to get paid for their efforts eventually.  Maybe we amateurs will help by working out some of the alternatives and kinks.

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