Personal Development for Smart People^TM

Recently I read Darren Rowse’s enlightening post about bloggers-for-hire being paid on a per-post basis.  Darren says the going rate being offered is around $2 to $20 per post… sometimes as high as $100 per post.  That’s a flat one-time fee with no residuals.  If such bloggers stop writing, they stop earning.  And apparently there’s no shortage of bloggers willing to work for such rates.

So what is a blog post really worth in terms of the revenue it can generate for the blog owner?  You’d be right to assume it must be higher than what people pay bloggers to write them, but just how much higher is it?

The answer will depend tremendously on a number of factors, especially on the type of the posts being written, the nature of the blog, and the method(s) of monetization.  These factors have very little to do with what the blogger is being paid though.  I’ve seen some brilliant, insightful articles from work-for-hire bloggers who are paid $10 per post.  On the other hand, I’ve also seen post monkeys deliver daily doses of disposable drivel.

I don’t have access to other bloggers’ financial data, so I can’t estimate the average value of a blog post across the entire blogosphere, but I can at least make a reasonable effort to calculate this figure for my own blog.  I know my blog isn’t typical though — I tend to write much longer posts than most bloggers — so I’m not claiming my figures are anywhere near the average, but I see no reason another blogger using a strategy similar to mine couldn’t derive similar values.  In any event I think you’ll find these results interesting.

Revenue per blog post

The metric we’ll try to calculate is revenue per blog post.  I suggest we take the web site’s current monthly revenue and divide it by the total number of blog posts on the site to get a ballpark figure.  So we have:

Monthly revenue per post = ( current monthly revenue ) / ( total number of posts )

This isn’t a perfect metric by any means.  It doesn’t account for the contribution of non-blog content such as the audio section, nor does it account for site popularity as a factor in revenue generation.  But the vast majority of this site’s traffic goes to the blog entries, and most non-blog items including the audio files and feature articles have their own blog posts too, so it should be a reasonable simplification.

So here’s the basic data.  In August 2006 this site generated a little over $10,000 in revenue, and there are a little over 500 total blog posts, so we have:

Monthly revenue per post = $10,000 / 500 = $20 per month

So on average each new blog post I write increases this site’s revenue by about $20/month ($240/year).  If I want to bump my annual income by $5000, I need to crank out about 21 new blog posts.

Is it reasonable to say that an average blog post on this site generates about $20 of additional revenue every month it’s online, even years after its original posting date?  For this blog I’d have to say yes.  Older posts continue to receive substantial traffic every day, and even though they don’t get the same featured position as my latest writing, thousands of visitors browse the archives each day or arrive from search engines, links, or referrals.  I write mostly timeless content, so my articles normally have a very long shelf life.  Some of the most popular articles on this site were originally written in 2000 and are still going strong.  I don’t imagine topics like personal development, time management, spirituality, or self-discipline going out of style anytime soon.  Plus I can always go back and update the most popular articles if they ever become dated.

Lifetime value of a blog post

Now how do we calculate the estimated lifetime value of a blog post?  Here’s how:

Lifetime post value = ( monthly revenue per post ) x ( estimated post lifespan )

I’d say a conservative estimate of the lifespan of one of my average blog posts would be 10 years, assuming I keep them online that long.  I’ve been maintaining web sites since 1995, so I’ve already seen some online content endure longer than 10 years.  Beyond 10 years it’s hard to fathom what will happen technology wise.

Based on a 10-year (120-month) lifespan then, our calculation works out like this:

Lifetime post value = $20 / month x 120 months =  $2400

So my average blog post can be reasonably expected to generate about $2400 in revenue over a 10-year period.  These aren’t inflation-adjusted dollars, so the money received in year 10 won’t be worth as much that received today, but for practical purposes I don’t need that level of precision.

How resilient is this blogging income?  What if my current method of monetizing my blog (mostly online advertising) goes bust?  That’s of little concern because I’ll just switch to another revenue model.  I’ve already planned for the contingency of another online advertising bust that might demolish my current revenue stream.  I also maintain an emergency fund to give me sufficient breathing room to make such a switch even if my current model suffered an immediate overnight collapse.  In fact, I’ve gradually been diversifying this blog’s income streams, and you’ll see a lot more of that happening next year.

But assuming a roughly compatible blogosphere endures for the next 10 years, it should be reasonable to estimate that each article I’ve written will generate about $2400 in revenue during that time, perhaps more as I continue adding new revenue streams.

Lifetime value of the blog’s complete archives

Interestingly, if we know the lifetime value of a blog post, we can also estimate the collective lifetime value of the blog’s entire archive.  This would tell us how much revenue had been pre-earned from creating the existing collection of blog posts and setting up the system to monetize them.

To simplify the calculation a bit, let’s make the (slightly generous) assumption that all of the existing blog posts still have their full lifespan ahead of them.  So posts that are a year old still have their full 10 year lifespan left.  Since this blog is less than two years old, this simplification shouldn’t throw us off too much.  So we have the simple formula:

Lifetime value of blog’s archives = lifetime value of blog post x total number of posts

Plugging in our specific figures, we get:

Lifetime value of blog’s archives = $2400 per post x 500 posts = $1,200,000

In other words you could say I’ve already done the writing work and the systems building to pre-earn an estimated $1.2 million of revenue over the next 10 years ($120,000 per year).  This figure may surprise you, but it seems about right to me.  Of course this assumes I’ll at least maintain current traffic levels and not do something stupid like allow the site to go dormant for a couple years.  And as I continue to write new articles and make further site optimizations, the site’s actual performance should be much better, since this figure is based purely on the content that’s already been created.  I also didn’t include this blog’s positive influence on my family’s other revenue streams, especially Erin’s readings, which would boost all the previous revenue figures by over 50%.  For the sake of simplicity, I only wanted to consider this site’s current direct income.

Now here’s the great irony:  Even though I enjoy a decent income for the time I invest in writing new blog posts (presently about 15 hours/week), I don’t write for money.  In fact, I find the idea of writing for money totally demotivating.  I write because I love sharing ideas that help people grow.  I started writing articles in 1999 and gave them away free for many years.  I didn’t seriously start monetizing my articles until 2005, after I decided to retire from computer game publishing.  It’s nice that I’ve been able to create a vehicle that allows me to easily monetize what I write, but I’d find a way to keep writing even if it wasn’t an income generator.  The income just serves as feedback that I’m writing something people value.

Value providers vs. post monkeys

I’m sure the metrics for other blogs will vary tremendously, but I have to wonder about those work-for-hire bloggers who write for a few bucks per post.  Do they realize how incredibly risky it is to accept such a position?  As I’ve emphasized many times before, our greatest risks in life aren’t that we’ll make critical mistakes — our greatest risks are that we’ll miss critical opportunities.

How many bloggers ever consider the potential lifetime value of the content they’re creating?  Do they write for readers 10 years hence, or do they churn out disposable posts that will be obsolete next month?  Are they capable of sharing ideas that could be worth $1 each to 2000 people… or $0.01 each to 200,000 people… given 10 years for their ideas to disseminate?

I’ll be the first to admit that it takes considerably more time and effort to write articles that are timeless, original, thought-provoking, and helpful than it does to rehash the news, compile link lists, or upload cat photos, but for $2400 per post vs. $10 per post, perhaps going the extra mile is worthwhile after all.

Even if you don’t care about the business side of blogging, what’s your attitude towards your current career?  Are you more closely aligned with the mindset of a long-term value provider or a short-term post monkey?  Do you eagerly accept short-term pay for short-term results, or do you commit to creating long-term value for long-term results?  Will the fruits of today’s labor still be useful to people a decade from now?  Are you selling out the future or intelligently investing in it?  Long-term investing isn’t just about your own gains – it’s about investing in helping others, so much so that you’re helping them even when you aren’t working.  If serving the greater good is your primary focus, then I say you deserve every penny the universe sends you in return.

Ultimately I believe the #1 factor in determining what a blog post is truly worth is the intention of the person who wrote it.

This entry was posted on Sunday, September 24th, 2006 at 11:33 am and is filed under Business, Career & Work, Entrepreneurship, Success, Technology, Wealth & Money. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.