The bigboy advertising agency Universal McCann published a very interesting article in its July PDF newsletter which you can find linked right here. Entitled "Welcome to the Free World", it argues that the internet (and other offshoots such as mobile phone content) is now expected to be free to access by users.
Another place to go and see the thinking behind this issue is the 'Market Movers' blog of Felix Salmon, who runs whole series of posts on what he calls 'blogonomics'. For example this post last week hit a nerve with me, as Salmon wrote that some members of the professional finance advisory community are disparaging of financial blogs, advise people to read them with great caution and (to quote some pro-adviser named Weiner), "...many investment bloggers are just in it to inflate their egos or simply for the money--using search engine optimization to attract web surfers and earn revenue when surfers click on advertisements on their blogs."
The ego inflation critique is separate matter, but good for Salmon that he hits straight back at the revenue stuff'n'nonsense by saying "I defy Ms Weiner to find me a single investment blogger who makes anything more than pocket money from advertising revenue. Yes, CFAs can and do make a living by giving out investment advice. But bloggers? Not so much."
Quite true. The reason this hit a nerve with me is that it comes at a time when I've been thinking what I really want to do with this blog. At the risk of repetition, it started as a joke and has snowballed into a major part of my day. There are many, varied questions that have arisen from this but the basic one is "Can I monetize this blog sufficiently to make it into a living?", because it's now taking up a fair portion of my waking hours and, as Salmon points out, this blog only makes pocket money right now via the Google Adsense units and the couple of paying advertisers on site.
The fact is that I can't give up my "normal" job to run this blog or financial website that might evolve from it right now; the revenues are just too small. I do run Google Adsense adverts on site that pay tiny sums if anyone clicks on them, and those with RSS feed or on the e-mailing list will have noticed by now that Google Adsense is now being piped through the feeds system. And I do have two up-front paying advertisers on site (Seinest and Fortuna, both well worth the visit plug plug). Also there's the BullionVault and the free magazine subs affiliations, but the money from them-to-me for sponsoring their sites has been all but non-existent; they're there because I believe they offer value to readers, that's all.
But overall I suppose the blog has earned me around $200 per month, which may even be above the pocket money figure Salmon had in mind but is nobody's idea of financial freedom, that's for sure. It pays the internet connection and the electricity bill, and it keeps me in coffee while I sit here, I suppose. As it happens, I could have been earning more on this blog by now if I'd wanted, but as well as not going within a nautical mile of the hundreds of web-based Ponzi schemes available to publishers, I've also refused ads from two companies because I didn't think they were very good investments (a couple of junior miners, to be precise. And before you ask I'm not telling you which ones). But basically where I'm at is:
- I like doing this blog. Beats real work, that's for sure. But even though the readership numbers are rising, it just doesn't pay. It's been fun up to now, but I can see right now that as it keeps growing it will impede even further on my 'real' working life and crimp household income if I don't do something about it. My fear is that I see at some indeterminate future moment that IncaKola just won't be "worth it" any more and it will have to fold.
- The (for example) 180 page UBS reports on the copper sector that wonks like me read are not for everyone and the MTV generation coming through now just doesn't have the necessary attention span for fundamental research. Have you seen a teenager reading a book that isn't Harry Potter recently?
- With the McCann report showing that 73% of people prefer to keep things free on the internet and only 13% of people willing to pay for website content, this next generation of investors coming through right now are making their 'Free World' tastes clear. The obvious answer to this (as McCann points out) is advertising sponsorship.
- This combo points me towards blogs being the future of investment advice. People don't want dusty-dry reports and economics treatises. They'll want good info in an easy to read package, and if it comes with a splash of entertainment and even a laugh or two, then so much the better.
- Some people are uncomfortable with the idea of blogging for money. I'm not one of them. Now that I know what kind of time and effort goes into putting a blog together that (without false modesty) attracts a growing audience, I think it's fine for the blogger to earn income from said efforts.
I know there are some pretty smart financial brains that read this blog. Anyone got an idea?