Congratulations! Now that your brand is defined, your fully-optimized blog is up and running, and you’re building and nurturing your audience, it’s time to get paid! Whether your financial goal is to simply recoup your blogging expenses, to create a thriving multi-million-dollar business out of your blog, or anything in between, this is where you finally get to capitalize on all of your efforts.
This lesson details a wide variety of monetization strategies, including affiliate revenue, digital product creation, ad revenue, and advanced monetization techniques.
David: One of the reasons that we stuck monetization towards the end of this course is that we firmly believe in order to monetize your site well that you first have to build the following, that you have to rank with Google, you have to have traffic to your website and you start to build trust with people and when they trust you, then they’ll buy from you and there’s multiple ways that you can set up monetization for your website.
Sarah: Also monetization goals vary from one person to the next so you might want to quit your day job and turn this into a thriving business with hundreds of employees. That is a perfectly attainable goal. Or you might be somebody who really just wants to keep a blog at a hobby level and you’re just looking to bring in enough revenue to cover the expenses of running a blog or anything in between. And so all of these strategies are going to be able to be scaled depending on your goals and applicable to anything in that spectrum.
Big Picture Lessons on Blogging as a Business
If you come from a conventional career and predictable paychecks, it can be hard to get used to potentially dozens of revenue streams, the high variability of revenue from month to month, and the noticeable effect of the global economy on revenue streams.
So, I want to share some big-picture lessons I’ve learned from growing my business out of my blog.
1. Resist the urge to pair back revenue streams for the sake of simplicity.
I learned this lesson the hard way a few years ago when I decided to promote only the handful of products that I tended to make good affiliate revenue from. The problem with this? Diversity in revenue sources protects you from:
- changes to affiliate programs (For example, Amazon used to pay a tiered affiliate revenue system that went up to 8.5% commissions across the board! Not so anymore!)
- companies you love going out of business, losing popularity, or losing market share as competitors overtake them
- economic downturns resulting in lower sales in specific sectors (Most blogger revenue streams depend on a healthy economy because the products we’re promoting tend not to qualify as necessities.)
In addition to economic resiliency, a diversity of revenue sources also allows more opportunities for economic growth. Most successful bloggers participate in affiliate programs, sell ad space on their site, have their own digital products to sell (at a variety of price points), charge companies for endorsements and mentions, and make money from advanced products (like books) and services (like public speaking).
Also, remember that those small payouts do add up! I’ve now learned to appreciate a $20 payout just as much as a $2,000 payout. I’ve worked with many small start-up companies over the years where my affiliate revenue has increased as their brand recognition has increased. And, it’s typical for lower-price items to sell in greater numbers than high-priced items, meaning I might receive 100 payouts at $20 for each payout at $2000! (Some quick math will tell you the total is the same!)
2. Create your budget using your lowest revenue numbers.
While your revenue will increase on average as your audience grows and you expand your product offerings, you’ll still likely to see some ups and downs in terms of revenue, dependent on campaigns, promotions, and time of year. Some sectors will see increased sales over the holidays (for example, items that make good gifts or relate to holiday celebrations) while others will see depressed sales during the same time period (for example, items related to dieting and health). And sometimes, the reason for a high-revenue versus a low-revenue month will go unexplained.
It’s important to plan for the worst (but hope for the best) when it comes to budgeting.
I also make sure to have three months of payroll and operating expenses on hand at all times. This gives me runway not only to handle a couple of low-revenue months in a row, but also to recognize downward trends in revenue that I need to respond to. For example, if a digital product I’ve created stops selling well (perhaps there’s a competitor’s product that is undercutting my sales), I have enough time to plan a final push of my product before retiring it and creating a new product to take its place. With money on hand to make up any shortfalls, I don’t have to stress about the ever-changing landscape of blog revenue!
3. Pay yourself (your company keeps the rest).
The most likely type of business to form from your blog is a limited liability company (or LLC), discussed in detail in the last lesson of this course, Turning Your Blog into a Business. With this type of business, you technically don’t draw a salary, but instead you keep the company profits. Even with this type of structure however, I recommend informally paying yourself (transfer money from your business bank account to your personal bank account at the same time you pay employees). Then, allow excess revenue each month to accumulate in your business bank account (or a business savings account) as informal business capital. This will help you budget personally and allow you to accurately gauge your resources for investment into new projects, ads for audience growth, new employees, professional services, home office expenses, premium plugins, etc.
4. Iterative growth is less risky.
If you’re a big ideas person like me, it can be tempting to invest a large amount of money into an enormous project or business growth (like hiring new personnel), whether you have the capital to do so on your own or need to raise money from angel investors. The problem with this strategy for business growth is risk. Unless you are intimately familiar with every aspect of the project, the expected revenue, marketing, audience, competitors, timelines, etc., it’s much better to pursue iterative growth. I have invested in more than one big project that’s turned out to be a complete flop.
An iterative growth strategy would mean that you divide that big project into smaller steps, each costing less money to implement, while expanding revenue opportunities along the way (the same strategy can be applied to business growth).
5. Avoid marketing fatigue.
As you monetize, you can find yourself on a marketing slippery slope. Since almost all of the revenue you make scales with audience size and sales numbers, it can be tempting to increase the percentage of the content on your website and social media platforms that markets a product or service (whether it’s your own or via an affiliate program).
Remember that your audience is engaging with your message as communicated by your high-quality content. It’s always helpful to embed your marketing within high-quality content, but even doing so, there is a maximum amount that you can get away with before your audience starts to check out. You can, of course, track this marketing fatigue by looking at engagement and reach numbers on your social media posts, how long people are spending on specific blog posts, and unsubscribe rates on your email list. With this data you can dial in your marketing strategies and how much marketing you’re doing to maximize revenue but still allow for continued audience growth.