According to a survey of 1,000 bloggers by Blogger.com, 81% of bloggers never make even $100 from blogging. Those that are capable of generating enough traffic to click ads may quickly see the numbers shrink as it scales to use intermediary advertisement platforms like AdSense, which can charge upwards of 20% commission on the revenue per click. The question now becomes how your blog is capable of maximizing the value from visitors to strike a point between value maximization and traffic generation, assuming there is a trade-off due to the amount of time required for each step in the vertical.
Avoiding advertising platforms such as AdSense can increase your gross margin by 20% or more. However, there is a tradeoff for this, given that many AdSense advertisements are behaviorally targeted for each user. Therefore, the click-through rates increase for each user, potentially at a level that actually causes a decrease in profitability. Nonetheless, companies that sustain themselves based on the advertising model almost always offer some form of self-hosted advertising from newspapers to digital magazines.
This model is also very popular amongst social media platforms such as LinkedIn and Facebook, which are almost entirely supported by advertisements. Keep in mind that you must be able to generate a massive amount of views with targeted demographics in order for this to make sense. It can boost your profitability if you have the ability to leverage your previous metrics, but that is certainly not the case for most blogs.
Branded Media Products
A more engaging vertical that bypasses third-party advertisements completely is the introduction of branded products. Some blogs sell books, premium content, and training materials to solicit directly to its audience. This works best if the blog is authoritative such as a blog about Forex Trading that sells proprietary training videos.
It is capable of selling this content at a very high margin since the product is distributed digitally. There are restrictions here since it almost exclusively applies to media sales rather than products. Very rarely has a blog established a strong enough reputation to segue into branded consumer or fashion products. Nonetheless, if the sale of an EBook generates $5.00 and your revenue-per-click is $2.50, with the same conversion rates, you have doubled your profits.
Separate Ecommerce Brand
The best way to triple your blog profits is to remove the middle men and own the sites that you are promoting. This generally works best if your blog covers a niche subject such as horseback riding, linking to an Ecommerce website about horseback riding gear. It is true that you could use the profits generated from AdSense to promote on other websites, but you have greater flexibility and autonomy when advertising directly on your website. For instance, you may integrate advertisements within posts by doing product reviews or send special coupons to consumers within your Email list.
Having a separate Ecommerce brand also means that you can build the valuation for your blog and a new company. The greatest value in an Ecommerce website is its online reach and loyal client base. Having a way that synergizes the blog with your own Ecommerce website can boost the value of both by creating value across both business models. This is clearly the most engaging and time consuming method of increasing your blog profits, but it can also be the most rewarding.
If you are hesitant to go down this path, it is also possible to offer a dropshipping service, whereby you deal with no merchandise at all. This may be performed by working with an established dropshipping firm, or working with a third-party fulfillment provider, such as Amazon Merchant Services. Working with any intermediaries can obviously thin your profit margins, but they may be a clever way to calibrate the integration of your ads within your blog to provide the business model and later scale to offer your own fulfillment program.
Very rarely has any blog ventured so far as to manufacturer their own products, but we have seen one fashion company leverage its following to produce its own line of faux eyelashes. The simple, high profit margin product was easily acquired at a mass level, branded separately and sold to consumers on the blog. When you purchase products through a manufacturer, you are afforded a 20 – 50% markup in most circumstances, even smaller if you are using a dropshipping company that can drop below 10%.
At that point, you may just be better off joining an affiliate program or continuing with AdSense. However, direct-to-consumer sales means that you gain both wholesaler profits and manufacturer profits by avoiding the middle men. In other words, a sale to manufacturer a product for $1.00 and sold for $9.00, is a massive return with the potential to generate $9.00 per click in revenue. This is certainly the most time consuming aspect in the direct-to-consumer market, and will detract from the core focus of your blog. Nonetheless, it offers the ability to generate more profits if your growth has slowed and you have a massive, sustainable visitor base.
There are many ways to increase the profits of your blog from driving new traffic to creating new platforms to cover untapped niches; this article has covered what you can do with the existing blog you have in place at current traffic levels. There is of course a substantial amount of effort required at each phase as you are doing the work of intermediaries and other companies along the supply chain. The decision to expand within each vertical is ultimately your own, as each case will influence the profitability of each blog differently depending upon its niche, traffic, and management team.
This post was contributed by Pro Business Plans, a company that specializes in the preparation of business plans for investment, immigration, and bank loans.
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