I’m constantly on the lookout for new blog niches. When I find a topic that I think might work, I first run through a monetization scenario: since my primary monetization method is, of course, Adsense, I check out what the (roughly) equivalent bids are for the topic using Overture’s View Bid Tool. A year ago (back when I was green) I would have stopped there. But these days, I won’t pull the trigger on a niche unless I know I can skin the cat at least 3 different ways. I’m talking about multiple monetization methods.
Now, let’s assume I do decide to go ahead with the topic–chances are, I will be using Adsense anyway. So why do I bother making sure I could monetize it “in a world without Adsense”?
It’s a matter of risk. A monopsony is about the single worst position you can put your business in as a seller (it’s defined as a scenario where this is only one buyer for what you’re selling). And if you’re a publisher, your business model is selling your audience to advertisers. If you only have one buyer for this audience, that buyer have complete, unchecked power set the terms of the transaction.
Adsense pays just fine across a wide variety of blogs for me. But what if they kick me out? What if they smart price me into oblivian? What if they start paying publishers 20% of click revenue instead of 65%? If Adsense does any of these things my entire biz model is destroyed. I do not have any power or leverage to shift the deal in my favor; I have to take what I can get.
A 3M Dog
Let me give you a real world example. I started my RFID blog a year and a half ago, and it has been a pretty decent success financially. Four figures a month in Adsense revenue, steadily increasing. But this is a blog I do not feel confident about. If Adsense booted me, I do not have a good alternate monetization method, since there are no major RFID affiliate programs. Nor have I cultivated relationships with potential direct advertisers. This blog makes me a lot of money but I am dependant on one entity’s mercy for this revenue. No, I am not confident about this blog at all.
A 3M Star
I’ve tried to learn my lesson though, and I some of my more recently launched blogs are much more diversified. Take my Forex blog, for example. It could be a the poster boy for 3M:
- I’ve cultivated relationships with direct advertisers (this has turned out to be very profitable)
- I’ve looked into various affiliate programs, and some of them have high payouts and would probably be of interest to our readers (such as online banks where you can deposit foreign currency)
- The site could probably also be monetized well with Yahoo! Publisher Network
If any one monetization method tanks, I can simply shift gears. The margins may change a bit, but I can always be assured of making a profit.
We talk a lot about blogging strategy a lot here, but if blogging is your business, it’s important that you know business strategy, too. The blogosphere changed a lot of things, but it didn’t change economics: monopsonies still suck.