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Is Fred Wilson doing something wrong?

September 24th, 2008 · Comments

Yesterday, Fred Wilson had an interesting post about his reaction to Technorati’s State of Blogsphere report :

"I’ve had about 150k visitors per month for several years now. My audience is stable but flat. I get about 100k visitors per month on my website and another 50k via my feed. At best, this blog brings in about $30k per year, all of which I give to charity.

And I use two of the better monetization services out there for bloggers, Federated Media and FeedBurner.

I don’t doubt that there are bloggers with similar sized audiences who do make $75k per year because they work it a lot harder than I do, but I also think that Technorati’s survey results are wrong."

I don’t think Fred is doing anything wrong, but he is not doing enough to monetize his blog traffic. Without working a lot harder, Fred should still be able to generate much more than the $30K he is making now.

Let’s use www.JohnChow.com as an example for comparison. According to Johnchow.com income report for March 2008 , it had 183,633 unique visitors, 26,000 RSS Subscriptions, and 323,435 page views in March, 2008. Its revenue was $32,529.40 for March 2008. The following table compares Johnchow.com and Fred’s blog based on limited data available from the two blogs.

Fred’s A VC blog

Johnchow.com

Alexa ranking (as of 1:15PM PDT, 9/24/2008)

135,260

37,125

Monthly Unique Users

100,000

183,633

Monthly Page Views

Not available

323,435

Monthly RSS Subscriptions

50,000

26,000

Average Monthly Ad Revenue

$2,500 ($30,000/12)

$32,529.40

Monthly Ad Revenue/Unique User

$0.025/Unique User

$0.177/Unique User

Ad Revenue/1000 page views

Not available

$100.57 for every one thousand page views

Johnchow.com’s number of monthly unique users is 1.8 times of Fred’s. But, Johnchow.com’s monthly ad revenue/unique user is 7 times of Fred’s!

I think that several factors contribute to the difference:

1. Mind set of the bloggers: Fred writes a blog to share his thoughts, promote his portfolio companies, and look for deal opportunities. His mind set is the more "classic blogger" mind set — I.e. write and share. However, John Chow has openly commented on this blog that he is an Internet Marketers, and blog just happens to be one of his monetization mediums. I’d call John Chow has a "Internet Marketer Mind Set". I think the mind set of the Blogger makes a huge difference on how the blog is designed, promoted, and monetized. "Classic Blogger" is like movie producer, while Internet Marketer is like infomercial producer. :-)

2. Diversification of blog income streams: Fred mostly uses Federated Media and Feedburner to monetize his content. Johnchow.com’s income consists of private ad sales, affiliate commission, ReviewMe, Text Link Ads, Kontera, TTZ Media, Feedburner, and Subscription. Johnchow mentioned in his blog that if he only used Ad Sense, his revenue would be about $1,000 per month. I think if Fred adds a few other income streams, his blog’s annual stream could easily go pass $75,000.

3. Is Federated Media really one of the "better monetization" services in the market? I’m not so sure. From what I have heard, Federated Media probably offers 60% rev share deals to authors (I.e. for every ad dollar Federated Media receives, author gets 60 cents.) I don’t know what rev share % Fred gets. But, I do know that a good number of ad networks offers rev share at 60-80%. I think there is an opportunity for Fred to get higher rev share arrangement from ad networks.

4. The importance of private ad sales: Private ad sales accounts for almost 50% of Johnchow.com’s revenue. Several top-earning bloggers have talked about the importance of private ad sales, including flat-rate deals as opposed to CPM deals. Given Fred’s reputation and blog traffic, I think he can easily sell out his private ad placements.

In summary, I think Fred could increase his blog income stream significantly. How much effort will it take? I think it’ll take reasonable amount of effort, but I wouldn’t call it "lots of hard work". Will it worth it? I’m not sure since Fred is not using his blog to make a living. He is foremost a venture capitalist, not an Internet Marketer per se. :-)



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Tags: Multiple Income Stream · Start-up Success

 
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