Posts Tagged ‘blogs’

Monetizing Blogs

July 17th, 2009 No comments

Sometimes, the rules of real life apply very solidly to the etherial world of the Internet. I recently read about how Bankaholic was acquired for $15 million. Not bad for a blog run by a single individual (Mr.Wu). It made me wonder, why would have BankRate paid such a hefty price for this Blog? I did a bit of digging around, and noticed that the key is lead generation. Here is a quote from Mashable:

“Just in last three years alone, the prices for some of the bids have gone up 200% to 300%,” said Chatter. “As an example from Google, to be one of the top three advertisers for ‘high yield savings,’ you have to pay $13.20 for a click. With a 1% conversion, it costs you $1,300 to acquire a customer.”

“Those are the numbers behind this sale – essentially, it’s lead generation.”

Now, all leads are not equal; banks are quite happy to pay oodles of money to acquire customers, who represent essentially a lifetime flow of revenue for them. A really ridiculous example is that of Asbestos Mesothelioma. You’ve probably never heard of this, but lawyers in the US are willing to pay over a thousand dollars a click for this keyword. This is because, people who are searching for this rare disease are quite likely to want to sue their former employers for oodles of cash. Lawyers do like that, very much, especially if they can take the case on a contingency basis and keep 35 – 50% of the net proceedings, on top of their legal fees.

So there you have it gentlemen, if you’re looking to make some cash via your blog, you need to enable advertising, and focus your content on information that commercial entities are deeply interested in. I don’t envy Mr.Wu of Bankaholic, who spent 18 months writing about bank mortgage interest rates, but he obviousely chose a niche that worked out well for him (and which contained paying customers). It’s eerily like your choice of location for your business; if you choose to run a restaurant down-town in the most fashionable area, you’ll probably end up with lots of customers in the daytime (around the offices) and the evening (around social activities). Move elsewhere, and you may have more people in the day than at night or vice versa. If you choose the wrong location, you may have to shut down due to lack of business.

If you want to learn more about particular keywords that your blog may want to focus on, try out the Google Sandbox. It’ll tell you about traffic as well as advertiser competition.