Why Political Blogs Aren’t Going To Make Money... Part Two

Site traffic.

The two magic words that lead to the pot of gold.

The thought in everyone’s mind is If only I can get enough traffic I can make money. If I have the traffic the advertisers will pay for access to it.

Everyone assumes site traffic is the key to blogger riches.

And, everyone is wrong. It is that simple.

Back when Roger L. Simon and I were bonded by true friendship and the common vision of large piles of cash in our laps, we decided to place a survey at his site to see what we could find out about the demographics of his readers. If memory serves, this would have been back in September, 2004. And what we discovered seemed to suggest we were sitting on a goldmine: Large household incomes, very well educated, disposable income out the blowhole... what we assumed advertisers wanted.

Well, by January of 2005 Roger and Charles had disappeared in a cloud of pure bullshit, and there I was, left waiting to hear about the “new model”, the “new partners” and “the new” what not... Being the curious sort, I arranged for a friend of mine to introduce me to the managing partner of a small, but prestigious, advertising firm in Columbus. I packed up our survey statistics and headed to a luncheon engagement that I assumed was going to convince this guy I was on to something.

Well, I spent 20 minutes explaining our idea and the business model as I envisioned it, and then, as the capper, whipped out the survey statistics and showed them to him. He looked at them for a moment, laughed, and then threw them down on the table in front of me.

“Worthless,” he said, smiling.

“Excuse me?” I said.

I then started explaining how great this information was, and continued to do so until he waved me off.

“Households don’t buy products,” he said.

“What?”

“Households don’t buy products,” he repeated. “Decision makers buy products. Decision makers within the household buy the products. You have no data on what products the households actually buy, and no data on who the decision maker is for each product.”

I followed that with yet another in a series of “What?” It wasn’t the last of them, either.

The reason the political blogosphere will never make money for bloggers via the selling of mainstream product advertising is because the reader demographics for political blogs will never support it. The political blogosphere is the internet equivalent of the Sunday morning news programs. Next time you are watching Russert or whoever, make note of who is advertising what on those programs. And keep in mind those shows are running on Sunday morning... and not primetime.

To put it a different way, who advertises during NFL games? Brewers of beer and builders of trucks. Why? Because the demographics of the viewership tells advertisers they have the household decision makers for beer and trucks. And here’s the important part: The demographics also tells them what they cannot sell. Market research tells advertisers that the people who NFL football games are not the decision makers on buying the kids back-to-school clothing or new bedding for the guest room. That’s why you don’t see K-Mart plastering the TV with ads during the Steelers game. Why do advertisers show toy ads on Nickelodeon? Because the kids are the decision makers in the toy equation. Mom and Dad my buy it, but only after they ask “What do you want for Christmas?”. That’s why toy ads are on Nick and not the Steelers game.

The mistake I had made was assuming that some good household data was enough information to get an advertiser to act. It isn’t. What will convince advertisers to advertise on blogs is convincing data that the decision makers for their products are at those blogs. Yeah, high household income is something advertisers like, but if it isn’t coupled with access to the decision maker they have no reason to spend with you. Their job is to convince the decision maker to buy their product. If you don’t deliver that person, they can’t do their job. If they can’t do their job, they are going move on from you to someone who will enable them do their job.

So think about this: What kind of advertising do you see on the Sunday morning talk shows? What kind of advertising do you see in the politically-oriented magazines (as opposed to news magazines)? See much in the way of advertising for computers, cell phones, video games or cameras? If not, what makes you think your shit-hot political blog is going to be able to sell advertising for computers, cell phones, video games or cameras? I mean, beyond pure ignorance on your part?

The bottom line is this: There will be advertising sold on blogs, and soon. It will be sold by bloggers who run special interest blogs: photography blogs, cooking blogs, quilting blogs and the whatever else will bring in a demographic of desirable purchasing decision makers blogs.

You’ll have a better chance getting Canon to buy space on a photography blog that gets 400 unique visitors a day than on a political blog that gets 40,000 uniques daily. It doesn’t matter that a percentage of the 40,000 have and use cameras, or that they consider photography "a hobby"; for all the advertiser knows, those people pull out a $100 2 megapixel cheapie once a year to take a picture of Aunt Myrtle at the family reunion. But those 400 people going to a photography blog are there for one reason... photography. They can be surveyed and tested and proved to be serious in a way the 40,000 can’t... the blogger can demonstrate his demographic is the sort of people that buy $1,500 cameras every 6 months and every gizmo and gadget that they can get their hands on. You show Canon you have those 400 people and they’ll be writing you a check before you can suggest an amount you think is fair.

And this is something Roger, Charles, John and Aubrey are going to learn over the next few months. Arianna Huffington has probably learned it; Huffington Post has been up and running for months and has nothing but Google Ads. Look at Josh Marshall’s TPM Café, which I consider to be what OSM™ should have been. Marshall has done everything right – I mean, awesomely right – so right, in fact, to be to the point of perfection... and he’s asking for donations. Why? The demographics for purchasing decision makers isn’t there. And no matter how good TPM Café is, the fact that it will never draw beyond the political junkie demographic is the critical limiting factor. Period.

If you’re serious about blogging for money, you’d better stop wondering how you’re going to get that next Instalink and start wondering what you can enjoy blogging about that will bring you the product decision makers you can sell to an advertiser.

Always remember this: Your traffic ain't, in and of itself, worth a shit.

If you’re serious about blogging for money, then you are in a business. So start thinking like a business owner and an entrepreneur. If you’re thinking you are going to build the Next Great Thing in political blogging, and it’s going to make you a fortune, what you are doing is building a 21st Century version of the Edsel to sell on the internet. And why would you do that, given that OSM™ has $3.5 million to build their Edsel?

Comments

[yama]

Talk about Open Source advice. A very nice and free seminar that was. And good to see you mixing it up again-- A sophisticated jab to go with all the brutal body blows of late.

[Elmo]

You're fookin brakin me haaart .....

[Luther McLeod]

That was a great and astute post there DtP. You should have charged money for it.

[Steven Den Beste]

That's interesting and astute. Ironically, it means that with Chizumatic I probably could get reasonable advertising from companies selling anime, were I so inclined. (I'm not.) My traffic is indeed not very high, but it's made up primarily of people who do like and watch and purchase anime DVDs.

[Elmo]

There's a moral in there somewhere? When I was a tyke, and had dreams of GP pilot acedom, I went to work at a formula car shop. It was rather disheartening .... took all the fun right out of 'participating' in the sport.

[Morgan]

I have a funny feeling that this is the right post at the right time. Folks gonna be linkin' this one.

[Dr. John]

Perhaps, instead of desperately trying to find a demographic for a product, we should start making a product to sell to this demographic. I'm thinking a hemorrhoid cream that won't stain a $1200 computer chair.

[DennisThePeasant]

Steven-

Your site is a perfect example of what I'm talking about.

[DennisThePeasant]

Dr. John-

You may be on to something there...

[Steven Den Beste]

There is one kind of advertisement which might want to actively seek out political blogs: political campaign advertisers.

Of course, that's highly cyclic. What does the political blogger do for revenue between elections?

[Jane Finch]

Insightful post, and one that explains why so many popular bloggers are still asking for donations.

[Billmon]

"What does the political blogger do for revenue between elections?"

He/she says: "Do you want fries with that?"

[Paxety]

I've been around TV and TV advertising for many, many years. What you discovered is well known by TV account executives. It's a big reason why you see what you do on TV - women are the decision makers when it comes to most household spending, and a great deal of television is geared towards what women are supposed to want to watch.

There's been a lot of complaining about TV news over the past two decades, particularly local TV news - the reason for the change from hard news to softer topics is the demand from the sales departments that the news attract the kinds of viewers to which advertisers want to sell - women aged 25-54.

[Eric Blair]

Steve, when are you going to start Hentai reviews?

[kos]

Generally true, but not quite.

Daily Kos is doing extremely well on the advertising front by aggregating an audience of great interest to political ventures (be they t-shirt makers or political campaigns or issue groups).

But "extremely well" is a relative term. My numbers have been great for an independent blogger with a tiny staff. While I'm currently reinvesting the bulk of my revenues into bolstering my technology, I assume at some point I should be able to make a nice, comfortable living off my site. However, my numbers wouldn't be so hot to investors looking to justify a $3.5 million investment.

And Daily Kos has a shitload more traffic than all the OSM bloggers combined.

[sydney smith]

I run a special interest blog devoted entirely to medical news, but when I tried to sign up to participate in Blogads, they wouldn't even return my email. What you say makes sense. If I were an advertiser, I'd choose a blog that was devoted to a field related to my product. But the people putting running the blog advertising business don't seem to buy it. They're still tied into the traffic paradigm.

[Cal Lanier]

While I agree with your observations, they only apply to CPM advertising. I don't know why more bloggers don't try affiliate advertising. Hell, most of them use tip jars anyway--why not give readers something for their money?

I've had success with affiliate advertising at my general discussion forum (www.theperfectworld.us). My expenses are $150/month, and I regularly clear about $1000/month, with 90% of that in affiliate commissions--on about 4-5 hours. My users buy around $125K/year of product, and I take in just under 10% of it (commission percentages vary). That's on a user base of about 1000. My goal is to open more forums once I get the advertising delivery automated--my techie guru and I both work full time.

I wish I were a more devout blogger, rather than an occasional writer, because it'd be fun to try to accomplish the same thing in blogging. Still, any blogger with a decent-sized audience who wants to support him should be able to do really well with affiliate advertising. And it'd be free to try.

I also think there's a great opportunity to automate affiliated advertising in a blogads format. It'd be relatively easy to build and would allow even small bloggers to participate without having to worry about their audience size.

Not that this has much to do with your main point, but I just can't figure out why more bloggers haven't given it a shot. You can't just put the ads up and hope people notice.

I've been enjoying both the backstory and the investigative rants. Keep it up.

[ahem]

Political whatnot aside, Dennis is absolutely on the mark about the advertising demographics here, and the Sunday bobblehead shows analogy is especially true. (Who advertises? Big corporations that don't sell to the masses.)

Kos and Atrios sell ads, I think, in spite of their subject matter; they've got the raw numbers to generate alternative demographics. Elsewhere, though? Dunno. It's not like the success of small-scale vertical blogs -- PVRblog.com is a good example -- where there's a captive market.

[Dan]

Steven is spot on as regards his site and its potential. With 1/1000 of PJM's investment he could probably own a space which would prove extremely lucrative for him. While I touched on the political angle in my post, it's actually even worse. Major national advertisers avoid the overly-political arena for very good reasons, it's a damned mind field.

Keep in mind there's some, but not much catch-up going on. Blogs became something special only after the last National election. The MSM is setting up blogs everyday, anyone of which will dwarf PJM from the very first day. And ad buying execs are already going to school on blogs to get to the bottom line. They have to, what with ad dollars becoming increasingly important in the marketing mix.

Significant print media dollars are and will continue to find their way to the Internet. But that movement will not mirror the dotcom explosion in growth as regards blogs, but will be more robust over established practical portals, MSM sites, etc. If corporations have focused on anything in this regard since 2001, it is not repeating serious mistakes in judgement as regards the Internet when it comes to the outlay of cash.

Increasingly, Internet advertising will rely on direct referrals, which all but recreates the paper coupon of old. Everything old is new again and PJM will likely prove that everything new is also old much more quickly than it was five years ago. Come to think of it, putting major capital into an Internet start up is rather five years ago as it is.