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Observations on The Economics of the Blogosphere

By Greg Balanko-Dickson

I came across an essay titled Economics of the Blogosphere, authored by David S. Evans who is co-author of the book Catalyst Code: The Strategies Behind the World’s Most Dynamic Companies.

The blogosphere is one of the biggest and most influential global industries created in the last decade. Technorati tracks almost 100 million blogs and estimates that about 20 percent of blogs are active in the sense that they were updated in the last 90 days. Via Economics of the Blogosphere

Trusted sources of informationYesterday I asked “Who do you trust?” because when I was looking at this chart from eMarketer I found it interesting that the number of people who trust ‘strangers with experience’ as a source for information – nearly doubled since 1997.

In my opinion, blogs still have a long way to go as we are slightly more trusted than advertising but only half as often as TV news reporters – we have come a long way but we still have a long way to go.

David says that according to “comScore, blogs accounted for slightly more than a third of the 173 billion US Internet visitors in May 2006.” which means that blogs are major competition for advertisers who are trying to reach the same people.

In Economics of the Blogosphere, David says that “about 10% of blogs make money from advertising but few of those make enough to pay their operators the minimum wage.” My experience confirms that his estimate is reasonably accurate. So, this means that most bloggers have a different motivation driving their passion for blogging.

The Other Blogging Currency (reasons people blog)

We all have our own reasons for spending a significant portion of our lives reading and writing our own blogs. David writes that people are motivated to blog for the following reasons:

  • Blog to influence.
  • Blog for fame.
  • Blog for reputation.
  • Blog to enhance another business or sell another product.
  • Blog for information.
  • Blog for interactions.

Before I ever started blogging I wrote the “Business Tip of the Day” for five years. I had 3,000 subscribers which was pretty good in those days but there was no ‘conversation’. While looking for a easy way to replace my content management system I discovered WordPress and my blogging journey began.

Why I Blog

I find that blogging keeps me connected to business owners and entrepreneurs that are reading my blog and it consistently provides qualified leads for my business coaching practice. In 2005 I placed adsense on my blog and can say that it paid my mortgage, groceries, and gas for the car. But I found it became a distraction because I was so obsessed with maximizing click-throughs, the quality of my writing slipped.

From Distraction to Focus

I made a decision to remove all advertising because I felt an internal conflict – do I write to maximize click-through or to help the readers? I was not able to easily overcome that internal conflict and it really bugged me – so to keep myself intellectual honest, I removed all advertising.

I no longer have any confusion over why and who I am writing for – I eliminated the internal conflict.

As soon as I made that decision and removed all the ads and started promoting the Business Plan Coach ebook – I got a contract from McGraw-Hill Trade to write my first book about buying a business and last year I finished my second about how to write an effective business plan.

Interesting how that works isn’t it? I believe that once I got clear about why I was writing – I attracted a book contract from one of the worlds largest publishers.

I challenge you to think about and answer this question, “How can I become more focused and on purpose with my blogging?”


Greg Balanko-Dickson is author of two business books, third generation entrepreneur and The Remote Control CEO.

6 Comments

  1. Posted August 8, 2007 at 11:06 am | Permalink

    At WordCamp, it was interesting to hear John Dvorak and Om Malik talk about the “end” of journalism and how traditional media is losing money incredibly fast and more and more people are getting their “news” from blogs. So I can see how that statistic on trusting strangers would be growing.

    Very good points. Trust is earned. How that applies to blogging is still being explored.

  2. Posted August 8, 2007 at 11:50 am | Permalink

    I have been enjoying the varied guest posts this week. I don’t have much interaction with the business side of blogworld and the net. I’ve found that many of the blogs reporting on various events tend to copy information elsewhere or simply state their particular position. Actual news coverage is hard to find and since the journalistic standards may or may mot be met, trust should be not granted without checking other more traditional sources.

    As for your final question, to be more focused and purposeful with my blogging, that all depends on events yet to come. When my first novel is published, should I use my blog to sell my work or continue in the personal vein I’ve been doing? I’m not sure yet. My readers come to read my poetry and stories. To view pictures and read about my life as a multiple personality. I don’t think that translates very well into a business plan.

    Thanks Lorelle for hosting these posts, they are very provocative.

  3. Posted August 8, 2007 at 1:44 pm | Permalink

    Lorelle: what is interesting is that the news that is ‘important’ to me is out on the blogosphere not in traditional media. They are still stuck in if it bleeds, it leads world.

    Trust is earned, in blogging one of the ways trust grows happens as people reach out and get to know one another. Trust whether online or offline is gradual and evolving. Cultural norms often dictate our behavior to be more trusting – whether it actually is trust is question for another day.

    Brian: Just the act of thinking about how you can be more focused and on purpose will lead you in the right direction. There is also a model online where authors release chapters one at a time and people pay a fee to get access to those chapters. Let me know how I can help.

  4. Posted August 10, 2007 at 10:26 pm | Permalink

    Hi Greg,

    this is a good article – I came across it via Jeri’s Friday – Five Great Posts on ungeekit.com.

    I’ve thought a lot lately on why people blog – this post makes a good contribution to the study of why we bother (and asks the question – if most blogs don’t ever make their owners the minimum wage, what else is in it for them?).

    Thank you.

    Best regards, Andrew

  5. Posted August 12, 2007 at 9:14 am | Permalink

    lorelle – how do i make my blog better and how do i get people to come to it? thank you trish

  6. Posted August 12, 2007 at 11:25 am | Permalink

    Trish, I am available for hire for such services.


8 Trackbacks/Pingbacks

  1. [...] Lorelle Комментарии (0) 09.08.2007, 07:33 [...]

  2. [...] Greg Balanko-Dickson talks about his blogging dilemma quite openly on Lorelle’s blog and I respect him for that. I [...]

  3. [...] The Economics of the Blogosphere. Greg Balanko-Dickson over at Lorelle analyzes the economics of the blogosphere. Pretty interesting stuff there. For example, blog users accounted for 1/3 of US internet traffic last year. However, only 10% of blogs earn revenue from advertising, but only a few of those are able to pay their operators even minimum wage. [...]

  4. [...] to a report quoted by Greg Balanko-Dickson, bloggers are not in it for the money: In Economics of the Blogosphere, David says that “about [...]

  5. [...] Lorelle on WordPress: Observations on the Economics of the Blogosphere [...]

  6. […] Observations on The Economics of the Blogosphere: Greg Balanko-Dickson is fearless with what he takes on and he tackles the economics of the blogosphere, the reality versus the myth. […]

  7. […] Observations on The Economics of the Blogosphere […]

  8. […] Observations on The Economics of the Blogosphere […]

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