The Why and How of Blogging and Money

Blogging and money is a funny topic surrounded by a lot of mystery and misunderstandings.  Many people don’t understand if bloggers earn money at all or how it works if they do.  And as with most money-related things, it can be a touchy subject and bring out a wide range of passionate opinions.

I wanted to take a moment to peel back the curtain on the business side of the blogging world.  My aim is to provide both an informative and interesting perspective on blog monetization by talking about it in candid terms.  Let’s dive in…

Why earn money from blogging

Not everyone makes the decision to turn their blog into a business.  Some people prefer to keep it strictly as a hobby and don’t wish to bring money into the equation at all.  For some people, it makes blogging stressful or uncomfortable.  Of course, there’s absolutely nothing wrong with that!

Personally, although I started my blog for fun, I still chose to treat my blog as a business from the start.  I’ve always loved the idea of running a business; it makes things really fun and stimulating for me.  It motivates me to work harder and be better.  Besides the fact that I’m naturally drawn to entrepreneurship, what are some reasons for monetizing a blog?

1 | Blogging costs money

Contrary to what some people think, blogging is generally not free, especially as a blog grows.  In my case, it costs $50/month just to host my site, plus $15 a year to renew my domain.  I pay $50/month for Adobe Creative Cloud, which I use virtually every day to create and edit my graphics and photos.  Plus, there are lots of little things that add up, like email hosting and giveaway widgets.  Even the “free” products I get from companies aren’t truly free: the IRS considers that a form of income and I have to pay taxes on those gifts at the end of the year.

With that in mind, I need a little income every month just to break even and keep the proverbial lights on.

You might be thinking: it’s crazy to spend that much, you can do all that for free!  Yes, I could host my site on a free (or much cheaper) platform.  I could use a free service to make graphics and stick with iPhone images.  But that brings me to my next point:

2 | Income enables growth

When I started my blog, I spent almost nothing on it.  I used a free theme and signed up for the cheapest hosting I could find.  But, at the same time, I started setting up ways to earn money not only to recoup my small startup costs, but also to give me room to grow.

Having money to spend on my blog has enabled me to grow so much.  I cannot overstate what a huge difference a little working capital has made for my blog.  Here’s how.

The most obvious way extra money has helped my blog is that it enables me to buy and try more workout clothes.  Instead of straining my personal budget and compromising my savings goals, I can use my blog income to cover the cost of at least some of the things I post about.

Perhaps more importantly, not only can I create more content with more income, I can create better content.  With my blog income, I can afford to occasionally hire professional photographers.  I was able to move off of the cheap host that was constantly crashing my site to a host that’s totally reliable.  Instead of using a free theme, I upgraded to a higher-quality theme that was easier to navigate (and prettier).  Later, I hired a designer to give my website a customized, even more functional design.  I’ve also started to dive more deeply into photography myself with a high-quality camera and lenses of my own.  That plus the photo editing software I mentioned above are massively leveling up my photo quality as I learn to leverage those tools.  I could go on and on with the ways I’ve reinvested income back into growing my blog, and how each of those investments has helped me.

It’s a positively reinforcing loop: the more I invest in my blog, the better my blog is.  The better my blog is, the more people I reach and the more I can help.  The more people I reach, the higher my blog’s earning potential.  The higher my blog’s earning potential, the more I can invest to grow even more.  And around and around.

Only a tiny fraction of my blog’s improvement and growth would’ve been possible if I was relying solely on my personal income.  If you want your blog to grow in both content and reach, you will almost certainly need to spend a little money.  And if you’re going to spend money on your blog, you probably want to earn money from it.

3 | Work is valuable

Here’s another thing I cannot emphasize enough: you deserve to be paid for your work.  If you are creating something of value, you deserve to be fairly compensated.  Of course, I’m not saying you’re a bad person if you don’t wish to be paid–that’s each person’s choice to make for themselves.  However, the idea that it’s wrong to expect compensation for actual work is totally bananas.

Personally, I think this idea is especially difficult for women.  We tend to devalue our work and compromise too quickly.  Society and our own internal dialogues tell us that if we ask for compensation, it makes us mean, catty, selfish, demanding, and more.  Recently, I’ve started becoming more aware of how frequently I fall into this way of thinking.  Unfortunately, being overly accommodating for the sake of “being nice” often translates to people simply taking advantage of your kindness and using you.  This isn’t to say you shouldn’t ever be nice, but I do mean that politely requesting compensation doesn’t make you a selfish, rude person.

As for the work aspect, blogging is definitely work.  It can be stressful and it takes a ton of time.  I spend 20-30 hours a week on blog work, in addition to the 40+ hours a week I spend at my full-time job.  A longer post that requires research and/or high-quality photos can take me up to 8 hours to create.  Most posts take 3-4 hours.  Add to that all of the behind the scenes work (managing the back end of the site, replying to emails, keeping up with social media, etc), and the work load becomes pretty intense.

That’s a lot of time I could be spending on catching up with family/friends, reading, cuddling with my dogs, renovating my house, or just plain relaxing.  Yes, blogging is a choice, but for those who choose it, it’s not crazy to want those sacrifices to be worthwhile.

I’m gradually learning that I don’t have to apologize for earning money in an honest way.  There’s nothing shameful about real income for real work.

Once again: you deserve to be paid for your work.  Really.

How bloggers earn money

Now that I’ve talked through why a blogger might choose to earn money blogging, here’s how earning income actually happens.  There are a couple of main income streams bloggers utilize:

1 | Display ads

When most people think about earning money blogging, the first thing that comes to mind is display advertisements.  The big advantage of display ads is they don’t take a lot of time.  You spend some time upfront setting them up, but after that you can basically forget about them.  But in order to make money from those ads, you need to build an audience.

Most display ads will only earn you about $1-2 per thousand views.  If you want to earn a significant amount of money from ads, you either have to have a ton of traffic, or you have to increase the number and/or visibility of your ads.  I’m sure you’ve been to websites cluttered with tons and tons of ads, or websites where the ads are in highly visible locations, like the very top of the page or sprinkled in the middle of content.  All those tactics mean that website will earn a lot more per thousand views (say $10 per thousand), but at the expense of being a huge annoyance to the reader.

Overall, contrary to what you might think, ads are not the most effective way to earn money as a blogger.  If you have an audience large enough that your ad revenue is meaningful, the other methods below tend to be much more effective.  Personally, I use a modest number of minimally annoying ads through Google AdSense (one of the most common ad networks), but all told, it only makes up about 10% of my blog income.

2 | Affiliate links

Affiliate links are the bread and butter of many bloggers’ income.

Here’s how it works: affiliate links have a “tag” attached to them that tells the retailer who sent the traffic.  For example, if I link to Amazon, I use a special link so Amazon “knows” the click came from Agent Athletica.  If you decide to make a purchase, Amazon will pay me a percent of that sale as a commission.  Typically, affiliate commissions are in the neighborhood of 5-15% of the order value, but each retailer sets their own rate.

One important note: affiliate links are NOT tied to any personal information.  I can see that a purchase happened, but I can’t see who did it, where you’re located, how often you purchase, or anything like that.  Your privacy is still intact.

Also important: affiliate links don’t cost you anything.  The retailer pays for the commission out of their own pocket, because they realize there is value in a blogger’s referral.  Bloggers are essentially functioning as personal shoppers.  You get a product you love, the retailer gets revenue they might not have gotten otherwise, and the blogger gets a commission.  It’s a win-win-win.

That said, most bloggers, myself included, only use affiliate links when it makes sense.  There are plenty of situations where I’ve highly recommended a product but have no affiliate relationship (not all retailers have affiliate programs).  Likewise, there are plenty of times when an affiliate commission is available, but I still don’t recommend the product.  But if I’ve already chosen to recommend a product and there’s an opportunity to earn commission off my recommendation, the choice is obvious.

Not to mention, if I gushed and raved about every single product I bought, you wouldn’t trust my opinion.  It benefits both me and you if I’m honest about the products I talk about.

Since I have a very product-focused blog, affiliate commissions make up the vast majority of my blog income, about 70-90%.

3 | Sponsored content

Sponsored content is arguably the most tricky type of income to balance.  Sponsored content is exactly what it sounds like: a brand compensates a blogger to include their product in a post.  Sponsored content allows the blogger to produce authentic, quality content that readers enjoy while a brand happens to benefit from it through increased visibility and sales.  This is another scenario where it’s (hopefully) a win-win-win.

Most of the time, a sponsored post doesn’t mean a brand tells the blogger “hey, write about how great my product is and tell your readers they should totally buy it”.  Most advertisers have wizened up to the fact that those types of hard sells are ineffective and off-putting.  Instead, sponsored content usually weaves a product or brand into a post that fits natural way within the blogger’s usual tone and content.  The goal is that the content is still interesting and valuable to the reader, not just a copy-and-paste advertisement.

For example, I loved seeing photos of Emily’s guest house makeover on Cupcakes and Cashmere.  A mattress company happened to sponsor the post.  Even though Emily had some nice things to say about their mattress, she incorporated it naturally and not forcefully.  Here’s another example of a sponsored post, this time on the fashion blog Extra Petite.  She wears Ann Taylor all the time, so it makes perfect sense that she’d agree to promote their latest collection.

Most bloggers are choosy about the sponsorships they accept and turn away more offers than they accept.  Usually, bloggers look for sponsorships where they have a personal connection or experience with the brand.  Or, if the brand or product is new to the blogger, they are excited by the idea, believe their readers will be interested, and envision a way it can be naturally woven into their blog’s message.

Bloggers strive to only promote products they truly believe are a good fit.  Not only does it feel more natural and honest, readers are smart and can usually tell when a blogger is doing something just for the money (especially if it becomes a pattern).

Now, even with the absolute best and purest intentions, sponsored posts don’t always turn out beautifully.  Sometimes an idea for a post just doesn’t end up how the blogger expects.  I’ve seen a fitness blogger write about frozen pizza and a wellness blogger promote toilet paper.  Since I’ve started blogging myself, I’ve gained a new appreciation for what goes into the balancing act of sponsored posts, so I can forgive the occasional not-so-awesome post.  For bloggers who rely solely on their blog income to make a living, that adds another layer of pressure to the whole situation that I can imagine would be very challenging.

I’m still learning and experimenting with making sponsorships work for my content model.  As a result, sponsored content only makes up 0-20% of my income in any given month.

4 | Products and services

Selling products or services is one of the most interesting ways of earning money as a blogger, since there are so many different ways different bloggers approach it.  The Cupcakes and Cashmere blog is quickly turning into an empire with a collection of clothing and home goods.  Many food bloggers write cookbooks, like Juli Bauer of PaleOMG, who has published 3.  Mary Orton of Memorandum launched a fashion app.  Many other bloggers offer services within their personal realm of expertise, such as virtual personal training or graphic design.

Since bloggers have already proven themselves as experts, transitioning to selling a product or service often comes naturally.

This category isn’t one I personally utilize right now, but who knows what the future may hold.

Lastly…

I hope this perspective helps provide some clarity on the inner workings of the blogging world.  If you have any questions about blogging and money, or blogging in general, I’ll do my best to answer them!