Money: The Ultimate Hornet’s Nest

I am flipping BLOWN AWAY by the emails, tweets, Facebook messages and even TEXTS that I’ve gotten in the last two days…all about one topic.

Yup, money is what makes the world go ’round and it’s certainly what you guys want to know about!

I’ve set up a new survey where you can submit your anonymous questions about money — feel free to ask me anything, even the stuff that you may be contractually obligated to NOT talk about (ahem). You won’t be outed here! I’ll use all of the questions to address your concerns in this post, future posts and at the Healthy Living Summit, where I’m presenting on “Monetizing Your Blog (Without Selling Out).”

[NOTE: There is no way I'll answer all of your questions here or be able to go into each topic in depth, so please bear with me. I'll get to as much as I can, as fast as I can!]

Before I get into the nitty gritty, here are a few things I’d like to make clear:

• Ironically, my traffic has gone way up since I announced that I have decided to end my relationship with Foodbuzz. So either you guys hated the ads, you’re dying to see what I do next or you just want to torture me by making me do the math on what I would have made if the ads were still up. Either way, thanks for coming.

• I don’t rely on this blog for a full-time income. So I can’t give personal anecdotes about what works and what doesn’t. What I can do is share the information I’ve learned in several years of blogging, my experience making part-time income and the knowledge I’ve learned from people who do make full-time income from blogging. (And according to the Healthy Living Bloggers Survey, that’s a very small percentage of people.)

• If you are blogging to make money, you have it backwards. It’s like that famous scene in Field of Dreams — “if you build it, they will come.” Except in this case, it’s more like “if you blog it, they will come, which means that the money will come but while you’re building, you should also be promoting but make sure that while you’re promoting you don’t drive those who did come away.”

• Making money from blogging is HARD. FREAKING. WORK. I’ll show you the numbers and make some great arguments that for most of you, blogging will always be a part-time gig — but some of you will still think that you can blog about your life or your workouts or your travel or whatever and that you’ll start bringing in the coin.

FACT: To make serious money blogging, you have to have quality design, quality posts, good SEO, good contacts with advertisers/sponsors and whole lot of freaking luck.

FACT: To make serious money blogging,  you need to be prepared to live and die with your numbers — I’m talking page views, unique visitors, Klout scores and more.

FACT: To make serious money blogging, you need to think about what you provide your readers AND your sponsors and somehow find a way that the two don’t clash.

FACT: Making money is harder than you think it is. And more emotionally draining, because you’re selling yourself. And even if you turn some of that work over to ad networks, an agent, etc., you need to be ready for some tough times.

That was tough love, people. Now to the stuff you really want to know about.

Common Ways to Make Money

Ad Networks

Definition: A company or organization that organizes a group of bloggers then connects them with a group of advertisers. This is supply and demand; the advertisers have products that they want lots of people to know about and the ad network has access to lots of bloggers. In most cases, the ad network does all the direct communication with the advertiser and provides the ads to the bloggers via HTML or other Web code. Bloggers earn revenue based on page views, either in the form of CPM (cost per impression) or CPC (cost per click).

Examples:

• Foodbuzz
• BlogHer
• BlogAds *might be a better fit under private ads
• Federated Media
• Glam Media
• Clever Girls Collective *hasn’t launched its network yet
• Technorati Media
• Google Adsense *not technically an ad network, but I’m defining it as such for the purposes of this post

Good For: Bloggers with a LOT of traffic. People who don’t have the time or traffic to approach businesses or companies with proposals for private ads or sponsorship. Bloggers who want to “set it and forget it” when it comes to actually placing and tracking ads. People who want access to major brands who have bought big packages with the ad networks.

Not Good For: Bloggers who don’t have a lot of traffic. Bloggers who want complete control over design and content (some of the networks will restrict you from running other ads or doing product reviews; you will need to put the ads “above the fold” which limits what else you can do in that space). People who want control over what appears in those ads. Writers who want a more personal and personalized partnership with the advertisers.

Basic Earning Potential: This depends completely on the network, your traffic and the rates you negotiate. In general (and I can’t stress GENERAL enough here), you can expect to get around $2 for every thousand page views ($2 CPM). Again, that’s for actual PAGE VIEWS. Not for people who get your posts via feed reader or email, without the ads showing. Depending on the network, you may only get paid for domestic or other targeted page views.

So if you get 1,000 page views a day, at $2/CPM, you’ll be making about $60/month. (Hard to swallow, considering how much you’d get paid to write those posts if it were a freelance gig, huh?) Obviously, bloggers who get 50,000 page views a day can do pretty well ($3,000/month at the $2/CPM and it’s usually higher than that at that traffic level anyway).

Private Ads

Definition: Ads that are arranged for between one blogger (or a few, but not a large group) and one organization. These are most often sold in sizes like 125×125, 250×250, 160X600. With private ads, the blogger enters an agreement for a set amount of time AND/OR a set CPM/CPC (sometimes it’s a flat rate instead).

Note: for this post, I’m not talking about blog ad marketplaces — this is actually going to organizations and working out a deal with their advertising departments

Examples:

• Young House Love
• Baby Rabies
• Design Mom
• Healthy Living Blogs

Good For: Bloggers who want to personalize and approve all advertisements on their site — in content and design. People who have the time to find and work with various advertisers (and report analytics, invoice, etc.)

Not Good For: People who don’t like doing their own sales work. Bloggers who can’t or don’t want to organize and report analytics. Bloggers who need a more consistent and dependable revenue stream.

Basic Earning Potential: Again, TOTALLY depends on your traffic. If you assume that the $1/CPM average from above is a good place to start if you have 1,000 page views a day, you’ll potentially make $30/month from each ad. Sell four ads and you’ll make $120/month. If you go the flat fee route, just keep that CPM in mind and adjust according to your traffic. If you get 500 page views a day, perhaps asking organizations to buy an ad for $10-15 a month is a better idea.

**this post on Mom Central has some other great ideas on how to find the perfect ad rate for YOUR blog!

Affiliate Sales/Marketing

Definition: Bloggers enter into partnerships with companies to “sell” products — for each product that the blogger sells, via personalized and exclusive tracking code or link, the blogger gets a percentage of that sale. These can be ads on websites, contextual advertising (you review a product then provide a link for people to learn more) or other forms. This can also be called referral marketing or revenue sharing.

Note: When using affiliate sales, it’s really important that you let your readers know … it’s as simple as having a disclosure policy or using (aff) or something similar next to the link.

Examples:

• Amazon.com / Affiliate Stores
• Groupon Affiliate Program
• Open Sky Project
• AdSense *in some cases
• Web Design/Software/Hosting Affiliate Programs (DIY Themes, Eleven2)
• Beachbody Fitness

Good For: Bloggers who use or review a lot of products — the best affiliate marketing comes from honest and quality content that ENDS with the link. People who don’t necessarily want ads or banners on their websites. Site owners who don’t want to be in charge of tracking the sales. Bloggers who are constantly asked about their favorite products.

Not Good For: People who don’t actually use these products or spend time talking about products. People who have contracts with ad networks or other sponsors that preclude non-network sales.

Basic Earning Potential: Some programs are a flat dollar amount per sale, others are based on percentage and still others are a mix (a bonus for a specific number of sales, for example). But in general, you can expect to make 10% of the product. If the product is $100, you could make $10.

IMPORTANT: I have never done any affiliate sales, so this is based on a lot of online research. If I’m wrong, please let me know so I can update this post and make it as accurate as possible!

Sponsored Posts

Definition: Brands or organizations compensate bloggers — in cash or product — for a post or posts. Those posts may be about the products (reviews, giveaways, etc.) or may be theme-driven (talk about your favorite way to cook eggs).

Note: Again, disclosure is KEY. You will ruin your reputation with just one post if you don’t let your readers know that you are being compensated. And please be picky about what you accept! You may even want a separate site or page to hold all sponsored posts.

Examples:

• My post on staying connected through email
• Ford Fiesta Movement
• IZEA / Social Spark
• Theme Park Mom
• Product Reviews

Good For: People who like getting free stuff! (Hey, it’s OK — free rocks!) People who want to work with brands in a very personalized way.

Not Good For: Bloggers who don’t have the time to actually review the product, take pictures, etc. OR adhere to the sponsorship details. People who have contracts with ad networks or other sponsors that preclude non-network sponsorships.

Basic Earning Potential: In many cases, what you “earn” is actually free product, not cash. The company sends you a case of yogurt, say, and it’s valued at $25. In other cases, it depends on your traffic and whether these sponsorships are done through an ad network (Foodbuzz, Clever Girls Collective, for examples) but you can expect to get between $25 and $75 per post.

Event Sponsorships

Definition: Brands or organizations contract with a blogger for representation and/or product ambassadorship at conferences, travel events, seminars, etc.

Examples:

• Me at Fitbloggin’ (SurveyMonkey)
• MizFit (great post here)
• The Feminist Breeder (BlogHer)

Good For: Bloggers who have existing relationships with brands and/or organizations (cold calling almost never works). People who love to network and be social at in-person events, even if their blogging presence is smaller or more subdued.

Not Good For: Bloggers who will be uncomfortable representing a brand to a large group of people. People who don’t want to have work to do at the conference and/or event.

Basic Earning Potential: Depending on how extensive the project is — handing out swag, making videos, holding special events, doing posts before/after — you can expect to get between $100-$1,000 for this. I know, it’s a big gap. I’ve gotten both amounts. Again — the higher the amount, the more work you’ll have to do. You can’t ask for what you NEED (travel costs, etc.); you have to ask for what the work is worth.

Brand Ambassadorship

Definition: Different than a single event-driven partnership, brand ambassadorships are agreements between a blogger and brand to do everything from represent the company at a series of events (including online chats, blog posts, etc.) and/or promote the company to a variety of audiences.

Examples:

• Attune Foods
• FitStudio
• Disney Moms
• Gotta Love Chevy

Good For: Bloggers who truly use and like the products that they’re representing. Bloggers who are interested in networking and social events. People who have the time to commit to a multi-platform campaign (in-person events, blogging, vlogging, etc.)

Not Good For: Bloggers who are not social and don’t like to meet new people. Writers who are not interested in trying the product.

Basic Earning Potential: Depends on the time commitment, and some of the compensation may be in product or expenses paid (not cash). However, based on your traffic, reach, etc., you can expect to make $15-30/hour. (In many cases, you may be paid a flat rate, but you can do the math to figure out a fair price based on the hourly rate).

Freelance Work / Offshoot Projects / Shops

Definition: Bloggers are paid for writing posts (or doing graphics, Web development, etc.) on sites that are not their own — including magazines, newspapers, blog aggregators and other brands’ online spaces. In addition, this may be books that bloggers write (often offshoots of their blogs) and sell as e-books or actual publications. Or it may be from apparel or other product sales (not affiliate — direct sales).

Examples:

• Carrots ‘N’ Cake on Health and her book Carrots ‘N’ Cake
• Operation Beautiful (book)
• fANNEtastic food’s t-shirt shop

Good For: People who are self-starters, can multitask and have contacts that help arrange for freelance and other opportunities. People who have made a name for themselves through blogging and are ready to take their work to the next level.

Not Good For: People who need a more stable source of income. Bloggers who don’t have enough time to keep the freelance work and the blogging going at the same time.

Basic Earning Potential: Depends on whether this is a one-time gig or an ongoing project. For freelance work, you can expect to make $50-$250 depending on the size and scope of the project.

BIG NOTE: YOU WILL MOST LIKELY HAVE TO PAY TAXES ON YOUR BLOGGING EARNINGS *and remember that for people who blog full-time, they’re often paying things like quarterly taxes and/or a much higher rate than people who are employed by a company. Gross income is not the same as net pay, capiche?

Did I get anything wrong? Do you have questions? Feedback? Hate that I’ve spelled this all out? Think it’s about time someone did? Bring on the comments.