Freelancers: Never Rely On A Single Income Source

So. You’re a serious blogger now because you secured your first blogging client. Seasoned freelancers know about the 80/20 rule: the bulk (80%) of your revenue will come from the least number (20%) of your clients. It’s sometimes called the 70/30 rule.

However, Chris Anderson, editor of Wired and author of the Long Tail book and website, says that the Internet turns the rule on its head for some types of digital media, in specific situations, thus giving certain content more sales life. Or at least, that’s my interpretation.

But the fact is, in any business, it’s generally easier to secure repeat clients than get new ones. But unless you (1) are a very disciplined saver, (2) have great faith in your biggest clients, or (3) have a partial stake in a venture, you probably do not want to rely on a single blogging client.

The Internet, and services like this new bloggers-for-hire/ Exchange community that Nick and the P-boys have set up, will give you a a better chance at finding more clients. But in practice, at least initially in your blogging career, you may not have a lot of choice about the number of clients. That’s mainly because blogging for pay is a relatively new phenomenon. So you have to consider alternate income sources.

Blogging/ writing monetizing options include running affiliate programs on your own sites or writing your own articles on the topics you are writing for clients. (With contextual or CPA/ CPM ads.)

Finally, take it from me. If you’ve never been a freelancer before, and are planning on relying entirely on your blogging skills to earn a living, learn how to budget. Save your extra money in an interest-bearing bank account – say an online savings account. If you have a banner year, and have the wherewithal to invest in stocks or mutual funds, you might consider that as well. Because pools do dry up sometimes, here are some important freelancing tips. [via MediaBistro]

P.S. MediaBistro, a great resource site for freelance writers, has a short article about negotiating your way to greater pay. The rates apply to print articles, but the advice applies to blog writers as well. Just keep in mind that at this stage, blogs and websites, on average, do not generate enough ad revenue to pay the same kind of rates. There is an immense difference, unless you’re copyblogging, which will require crack writing skills.

18 thoughts on “Freelancers: Never Rely On A Single Income Source

  1. I think we’re getting somewhere with our understanding. The metrics that drive reports need to be solid and in tune with the pulse of the company, the tail, and the ‘entrepreneurial sorts’.

    Then the metrics need to feed a graphical dashboard that can be interpreted at a glance. This means that the stats/math geeks need to come to an agreement with the business/management types and make sure that every one understands how the graphics are to be interpreted.

    Throw in some surveys and further analysis on test subjects that attempt to read the graphics and figure out if they are intuitive across the culture of the particular client/company in question and then you’ve got something!

  2. Right, so based on what Brett is saying (in the comment above my comment directly above), there’s a niche for you entrepreneurial sorts. Come up with a way that long-tail tracking efforts are minimized, and reportage maximized. In other words, a tool that bloggers such as ourselves can use to show our clients their online ROI.

    This could become a very big subniche of web analytics, but one with maybe not so much intimidating statistical mumbo jumbo. (I’m a stats/ math geek, so it don’t scare me none. But I think that many people are reluctant to hire someone with the skills because they feel they won’t understand the reports anyway.

  3. [In case anyone is confused, I edited this comment and it ended up posted after Brett’s comment above, instead of before.]

    Well put. Though with a medium like the Internet, the cost of pursuing the long tail is reduced, and the message often propagated for far longer than a company might expect. (Possibly leading to the new dog, as you put it. Great

    Look at Performancing as an example. Someone posts an article, and sometimes a month or more later, people are still commenting. A company with a quality blog can have the same kind of enduring attention.

    Avinash Kaushik said it well in his Occam’s Razor “web analytics” website, that you shouldn’t focus on cost but rather on ROI (I can’t find the exact post, but the site is It’s what you get out of the expense that should matter.

  4. Raj, you mentioned “A company with a quality blog can have the same kind of enduring attention.”

    This is a important point and when viewed with a companies need to focus on ROI, it becomes very very difficult for many organizations to link the benefits of an enduring campaign to ROI.

    The problem is that many companies have a hard enough time paying attention to simple marketing programs – ergo if they place a superbowl ad, how much of an upsurge in profits will they actually see.

    A company that takes a swing at the Superbowl is going to invest time in paying attention to the results.

    However for a company that launches more moderate programs or adverts, they may not have the ability to assess 1. the impact and 2. tie that back to ROI or even 3. Costs.

    The financials and data for these three areas are rarely kept in the same areas. In my former company we were just beginning to look at the benefits of performing data analysis using an OLAP or Datawarehouse to start to cross reference these different areas of thought within the company.

    Its hard enough from an accountants perspective to get the Marketing Department to provide travel expense information, let alone gather solid data about a marketing campaign that will generate 80% of activity. Tracking the long tail of the smaller programs that generate 20% of activity or less and that generate this over a long time is even more difficult.

    A web only based company might have an advantage if they have solid affilliate like tracking mechanisms, but many companies that have all those other touch points and sale points lose this detail in the shuffle.

    So when the decisions are made on high to chop something, its usually not so much out of stupidity, but out of a level of ignorance about ‘what is going on’

    Circling back a bit, this probably explains Amazon’s abiltiy to chase the long tail at all, and explains more why non-amazon like companies are missing the boat here. They haven’t figured out that a program let loose on the internet can conceivably run forever, and thus effort to put a program up, can return dividends for months or years to come.

    Hope you’ve gotten as much out of this dialogue as I have.

  5. After working in the fortune 500 sized business area for many years, I can say that the long tail is often times the target of corporate strategists for cut backs. They do not look at the tail as a potential for more business.

    Instead the long tail is seen as the source for non-standard business that typically does not conform to existing business processes and models and therefore usually costs the company more money than the tail yields in profits and sometimes revenue.

    Following a kind of Jack Welch logic, they will often cut anything that is not in their top 3, 5, 10 focus. Or if its not part of the 20% of the business plan yielding 80% of the profits then its a waste of time.

    Please don’t mis-understand my own philosophy in this regard. There is a practical time to make these types of cuts when you are in a large company and have limited budget and resources to cover your big earners, however to cut the tail off has a number of intangible repurcussions that can haunt you.

    For one thing its never wise to cut anything in business as trends change and the tail might lead you to the new dog or some unique product line or service offering.

    Working as a consultant these days, I have to target those areas not covered by the large corporate side of business, the areas that are likely to be cut.

    Sometimes there is good business to be done serving the tail. And Sometimes there is very good business to be done helping customers and partners positioned on the tail that are trying to move up the value/revenue/profit chain towards a point where they will be in the radar of the fortune 500. This is where I come in as a business developer.

  6. Hah, yeah, I know what you mean. I think a lot of those people just wanted to sell another ebook or split testing package.

  7. I hear you Chris. I’ve done my share of direct mail and space ads too. Anyone in real business is going to be exploring both online and offline strategies. But last year I made a conscious decision to remove myself as much as possible from my offline businesses and do what I really love, which is online.

    I was referring more to the “guru” types who, after promising their minions that the Internet streets were paved with gold, are now trying to lead them offline into direct mail. That’s what makes me laugh, since they often proclaimed direct mail as dead over and over when selling their Internet marketing courses.

  8. Brian, I started with the internet and expanded into offline and loved it. Thing is there are so many people in the offline world who do not measure or even seemingly do anything strategically. For me it was online -> CRM -> direct mail and I like to think we kicked some serious bottom in that space.

  9. The thing the Internet really did was remove most of the risk and a much of the complexity of targeting niches (vs. direct mail). I wrote (and still write) a fair amount of B2B direct, and the closest analogy I can come up with is “death by a thousand paper cuts.”

    Online is faster, cheaper, and more fun… 😎

  10. Yep! Direct mail is exactly the analogous methodology that works online. It cracks me up that some people who got their start on the Internet have now moved offline, *back* to direct mail.

    Me, I’m sticking with online. There’s all sorts of cool things happening that make direct mail look silly to me at this point.

  11. Brian;

    I should have been clearer; it was precisely the “big business” part of the Long Tail that rankles so much. Anderson’s numbers were inaccurate at best, and the “current” numbers reflect the fallacy in Anderson’s thesis; that big companies have the ability or willingness to profit from niche markets.

    That’s bad for them, but very, very good news for those with the willingness/ability/guts to make a living off niche markets (people like those gathered here).

    And yes, the “long tail” is very old news for some of us; in the pre-Internet days, it fell under the heading of niche marketing and micro-niche marketing. Then it fell under the domain to the true forerunners of today’s Internet niche pirates – the independent direct mailers.

  12. One thing that I found quite fascinating in Chris Anderson’s original article is that because of the Internet and content such as Amazon’s “people who bought this also bought this”, new sales life has been given to previously unknown books, movies and albums, etc.

    I’m thinking that someone could capitalize on this in another way on their blogs. Here’s an example. I’m using travel writing because we had a posting here, and some idea just popped into my head. What if your travel site had reviews of vacations in different places, but used the same type of IYLTYALT (If You Liked This You’ll Also Like This) idea? Similar but not exactly the same.

    So, at the end of a review of a vacation in, say, Peru, you have a blurb that says something like, if you think you might like a vacation in Peru (based on the review you just read), you may also try Ecuador. Or alternately, people who enjoyed Peru also enjoyed Ecuador.

    Pardon me if someone’s already done this, but I’m saying that Amazon doesn’t have to be the only one to do this. CMJ (College Music Journal) used to do this with albums they reviewed way back in the early 1990s and possibly beyond – in print. Other mags did it too. I know that it made me and other people interested in previously unknown music (to me).

    This feature of theirs caused me to learn a great deal about other bands I might not know. Someone clever can figure out other ways to employ the same technique on their website/ weblog. I do it to a minor degree in my reviews of the Rockstar Supernova reality series, and link “related” music to my Amazon affilate account. It hasn’t earned me anything yet, but it might. Not doing would earn me nothing.

    Finally, to tie all my rambling back to my original post, if you can figure out ways to harness the Long Tail ideas for your blogging clients, you might find yourself with increasingly more work.

  13. For those marketing on the Internet, the Long Tail is old news. We’ve been doing it since the 90s and it’s still a winning philosophy.

    The question is whether Anderson has correctly predicted that the LT will apply to big business instead of only small. Make sure not to confuse the issue when it comes to that.

    So, for what Raj is talking about, the Long Tail concept is not only valid, it’s the number one high percentage way for a solo or micro-business to leverage the reach of the Internet.

  14. The Long Tail is an attractive idea, but a deeply overhyped one. I believe Anderson’s original Wired article suggests that 57% of Amazon’s sales come from its “long tail,” but a deeper look into the numbers suggests it’s closer to 20%.

    Interestingly, this supports the old “80% of freelance revenue coming from 20% of the clients” rule, which – after 20 years as a freelancer – rings true to me.

    Below are a couple links explaining the alternative math.

    I think your advice is good, and to add, I’d suggest that the best business practice I ever developed was spending a few minutes a week simply sitting down and thinking of new projects to pitch to potential clients.

    You avoid an involved sales process, drive revenues, and make yourself more valuable to your client.

    Long Tail math problems

    More Long Tail discussion…

  15. The Original Article

    For anyone curious to read the original article just follow that link.

    I’m not a stats geek by any means. If you ever get around to documenting the proof I’d love to see it.

  16. Paul, it’s understandable that it could be perceived as hype, however, as a stats geek myself, I analyzed the basics of what Chris Anderson was saying. The surprising thing is that the hypothesis is probably provable mathematically/ statistically. (I can picture the proof but haven’t been able to document it.)

    In fact, exponentially decreasing/ increasing curves are exhibited as a typical behaviour in nature for all manner of phenomena. (I’m extending to offline applications – even though the theory applies to the popularity of online content or the sales of media online.)

    But seriously, Chris’ best, most succinct writeup of the Long Tail phenom is the original Wired mag article. (Sorry, I don’t have the URL handy.) It very cleary explains, in a lengthy but readable article, what the theory’s all about.

    Where the hype is coming from really is in everyone (including myself) who later realized how incredible the idea is, and wants to write about it. But Chris never hyped the idea, in my opinion.

    I can’t do it justice in a paragraph, which I attempted above in my post. But I recommend the original article (if not the book) for anyone doing business online. It’s just one of those articles that needs to be read, even if you ultimately disagree. (Keeping in mind that it’s statistically provable.)

  17. I’ve seen a lot of hype on the long tail and while I haven’t finished the book yet– I am not really convinced that it is anything more than hype. (*edit* Not necessarly all hype but definately over-hyped.)

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