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Find The Boots

Rantings from a few corporate types about life, technology, travel, guns, politics, and everything good in the world.

Making Money and Having Fun, or Why the Internet May Be Doomed

Sunday, June 03, 2007

My first boss gave me some very sage advice. "When it comes to your job, it's all about making money and having fun. If you're not doing one, you've got to do a heck of a lot of the other."

Truer words were never said. I've had jobs that paid huge amounts that I absolutely hated -- the amount of money was never enough to put up with the bad times. And I've had jobs that were lots of fun, but if you can't pay the bills it's time to move on.

So why do bloggers blog? It's certainly not for the pay. The ads you see going down the side of the screen don't even pay for the cost of the internet connection, much less the large amounts of JWB required to get inspiration for the articles. Even the mighty Kim DuToit laments that his blog doesn't generate much revenue. In fact, he's claimed that a venture capital deal fell through due to his blog. If Kim can't make money at this, then none of the small blogs can.

So bloggers do it for the love. For some, it's to be famous. Others get a kick out of having a huge group of people listen to what they have to say. Like SayUncle says: "Remember, I do this to entertain me, not you."

But all bloggers like money, so when I read a blog that I like I make a point of clicking on the pay-per-click ads on the site. Not on the affiliate links, because those don't give the blogger anything unless I buy something. I do make a point of going to a blog I like to enter the Amazon store through their link so that they get the commission. I figure it's a nice thing to do, and Amazon won't give me a commission on my own purchases.

Most people aren't aware of the ad revenue from internet ads. The average banner ad costs about $0.50/1000 impressions. A click on a pay-per-click ad may be worth 5 or 10 cents, depending upon the topic. The average click through rate is about half a percent. But if you change the click through rate to something high like 10%, everything changes. There are people that make their careers out of extracting an extra point on the click through rate of their site.

So what does this have to do with the doom of the internet? The internet runs on advertising revenue. It's why the big sites exist. At some point, you've got to feed the bulldog. If not for ad revenue, Google and Yahoo would be gone, and then what use would any of this be?

This model works extremely well for business-to-business and business-to-consumer applications. The consumer sees ad, gets interested, clicks, and buys something. The web site operator gets a payment for the click, the business gets a sale, and everyone is happy.

But it fails utterly for politics. Politicians are selling votes, which can't be promised or delivered over the internet.

Howard Dean ran an interesting campaign on the internet. Fred Thompson gets the internet too, evident from his post in Pajamas Media:
Whether or not the Internet can elect any particular candidate in any particular race, it’s clear that all of you and our many friends across the blogosphere and the Web are part of a true information revolution. That’s why so much of my effort has been focused on talking to Americans through this medium. By empowering individuals and building communities, the Internet provides a way of going around the inside-the-beltway crowd to reach people in numbers unheard of not that long ago.
Now Fred is an honorable man and I doubt he would do anything that wasn't on the complete up and up, but what if a politician came along that understood how the internet works and decided to take advantage of it?

What if the supporters of a particular candidate organized and started clicking heavily on the advertisements in online articles about their candidate as long as it gave a positive review?

You can't tell me that there wouldn't be a huge amount of pressure exerted on writers of web content to start writing favorable articles on their candidate. And sites that were already pre-disposed to support a candidate would have a huge amount of money rolling in from clicks. Perhaps it would even turn into a funding source -- if you support your candidate, go click on these ads so the site owner can contribute.

The natural reaction of the big internet advertising companies would be to then ban those sites. Except that the natural reaction of the supporters would be to then click like crazy on their opponents sites to get them banned as well. And can the big internet companies really afford to ban all sites that have anything to do with news?

It's going to be a mess as soon as they figure this out.

   

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1 Comments:

  • At 9:13 AM, Blogger kystorms said…

    You bring up a very interesting point, one that I had not even thought of before.
    I had actually considered blogging for Fred T * he is just my fav* but thinking about this the way you describe makes me wonder if this would be the correct way for me to go with my other blog.
    Thanks for bring this up, this discussion will have to get spoken about soon among other bloggers.
    I know that Robert Scoble did some blogging for Edwards, but Robert does not run ads, so for him this would not matter. Interesting info as usual.

     

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