Death of the Media Mogul: Digital Diaspora means …. less for everybody.

As podcasters and webcasters and such try to turn a buck they come up against fixed ad revenues.

Ad model is a problem

(Note several comments came in based on those two sentences before I finished this post)

The main point I’m trying to make here is that the internet has created a remarkably cheap and effective content distribution mechanism – a global soapbox for anybody who cares to make a point online.    The cost to publish online is now essentially zero for all but very  large scale online publishing efforts.    Although eventually the number of publishers will level off as everybody who wants to be online gets online and the dropping out folks balance the new arrivals, I think we are still early enough in that process that there’s a lot of new website and blogging action ahead of us.

This suggests that it may be increasingly hard to become a  *Media Mogul* even in fairly specific niches.      We’ve seen the rise of mini moguls like Arriana Huffington in the Political space,  Mike Arrington in Technology at TechCrunch, Jason Calacanis , and Nick Denton of the Gawker Yellow Journalism and Celebrity Blog Empire,  but I think the success of early blogs is more a transitional thing than a trend that’s going to stick.     Few blogs make much if any money and that’s not likely to change a lot although I suspect we’ll see lots of hard working good writers find comfortable niches of expertise managing to make a living providing online content – at least until the machines start to slice and dice and repackage online information so effectively nobody can tell if it’s organic or artificially intelligent organization.

Now, contrast this trend towards many publishers with the fact that online advertising total spending may actually decline in 2009, and more importantly can only grow so much.    Now, it’s true that the online spend is currently low enough that we may see online advertising grow enough to support the growth of online content for some time, but my guess is that content is growing many, many times faster than online advertising it needs to be profitably supported.   Luckily for users the content is not going to go away and will keep flowing online, but unluckily for online publishers they are going to have to produce more and more to make the same amount.   We’re already seeing this trend with sites like TechCrunch which often spin out dozens of articles daily.

As an online publisher myself I’m not really sure how to address this challenge.    Certainly I tend to favor keeping expenses under control and not making the mistakes we did earlier in the travel empire by spending too much to improve websites that were always under the gun of Google’s somewhat algorithmically arbitrary content policies.   Better I think to use small amounts of capital to seed a lot of project and then fund the winners and let the losers whither on the vine.     I’ve written a lot about this process which I think is somewhat analogous to biological evolution where smart businesses actually are usually working away from failure more than towards success.    I know a many successful business folks (and perhaps even *more* biz wannabes) would bristle at the notion that serendipity plays as much a role in success as careful, reasoned strategy but the more I see of success and of failure the less convinced I am that formulas play much of a role.    Sure it helps to work hard, have a general idea of what you want to do, etc, but like evolution I don’t think a whole lot of planning is the recipe for most success stories.  On the contrary you find engaging people engaged in things they enjoy and are very good at doing, and you find lucky breaks or circumstances that propelled thos particular people to fame.    Music and sports are a great example of this – for every thousand excellent singers or sportspeople there are only a handful of superstars, and the road to that stardom is often littered with personal tragedy as well as the failures of the other 999 folks who didn’t make it.    I think the reason we tend to think there are success “formulas” is that we examine success too much and failure … too little.

OK, I got too far afield  – must be the turkey talking.   Hmmmm …. where is that leftover stuffing anyway?

11 thoughts on “Death of the Media Mogul: Digital Diaspora means …. less for everybody.

  1. If the number of visitors to a site is high, I assume Google pays more though perhaps Google only pays according to site visitors who also click on the ads. If Google has some sort of ad-revenue cap then the site has to do the equivalent of putting out a tip jar to milk its loyal visitors or charge subscription fees of some sort. The only other revenue boosting technique I could think of would be non-Google ads that were finely targeted.

  2. FG – Google Adsense is the largest ad network, though as usual you are correct to note that blogs tend to prefer the targeted ads which will pay them better (I’m not clear if advertisers are better served by this approach but I’m leaning to think *no*. I think the ad networks have essentially added slick salesmanship to boost the perceived value of the ads without doing much to boost the real value)

    Google adsense remains the giant gorilla in the space, and for the most part they pay according to the *value* of the term – e.g. advertisers pay a lot for clicks on the terms “Mesothelioma” where they pay only about a nickel for clicks to terms like “Dogs”. The system isn’t entirely rational yet and many advertisers fail to understand that a click on “travel” is generally far less valuable than a click on “Pasadena Hotels”. Google, knowing this, places a floor on terms with valuable modifiers like “hotel” in the query string.

  3. I use adsense, and the pay-per-click value on content starting out averages at about $0.50 a click. Some a little less, some a little more. The problem with approaching specific sites or businesses for promoting them is that usually they offer you affilate status where you are only paid when something is bought from them using your affiliate link rather than being paid for sending them a visitor.

  4. Do people actually click on these google supplied ads? Targeted or not??
    I tend to avoid clicking on any ad and to avoid doing business with any firm that I know has ads.

  5. I know a many successful business folks (and perhaps even *more* biz wannabes) would bristle at the notion that serendipity plays as much a role in success as careful, reasoned strategy but the more I see of success and of failure the less convinced I am that formulas play much of a role.

    Well -stated. One big cyber-roulette table–that’s blogland. Though with a half-dozen ads or so, and a few well-placed nipple shots, a blogger might rake in a $20 every six months or so. In other words, don’t quit yr day job.

    Hairy Xmass and Nappy Lewd Year!

  6. Ah came off a bit rude, and overly cynical (I meant in general). A good blog is a good thing: and now there are like 80 million or so. Happy New year.

  7. So most blogs are “D-List” blogs? And it takes luck to make it to the “A-list” and even greater luck to stay on the A-list and be profitable?

    What aside from luck lets someone become or remain profitable? Merely being first to become dubbed as an “A-lister”? Most people driving to work in the morning listen to a news/traffic station on the car radio, but they select it simply because its already been programmed into one of the buttons. Its right there so it is viewed as good. Its content is not analyzed or rated; its content is conveniently available.

    So the next Social Network: BlogButtons dot com! You looking for a Blog? Go to BlogButtons and just press the category you want: you get a blog that is based on your past history at other sites, your friends tastes in blogs, your twitter stream and your book purchases at Amazon.

  8. “Don’t Quit Your Day Job” Horatiox that is the best single piece of advice for anybody hoping to make money online. It doesn’t mean folks should not try, but they should realize that the success stories are not typical.

    FG in very, very general terms you’d expect about a 0.5% to 2% clickthrough on a Google Adsense ad at a travel website. I’d say it is common for a fairly targeted website (e.g. Travel) to see in the neighborhood of $5 per thousand adsense ad blocks shown although results vary dramatically depending on the site, targeting, source of traffic, etc. Thus with 1000 people visiting a site per day you’d expect to make about $5 per day from Adsense. With a million people $5,000. These are really GENERAL ballpark numbers – things vary a lot day by day even at same ads/same page and Google does not share the percentage of the revenue they send to publishers though it’s commonly thought to be about 65%

  9. So then the only people making any money from blogs, aside from a few A-listers with massive click rates, are those scam-artists who place GoogleAds about “You Can Make A Grand A Day Writing Blogs”?

  10. The problem is that for every quality blog (like Duck’s) there are countless blogs featuring bad writing, celebrity hype, porn, flash, etc. Even in the political arena that seems to be the case. I contend that the DailyKOS school of liberal blog-scribbling should be held responsible for a great deal of bad political writing (and HuffPo in that school as well). KOS-Speak relies on Sally Fields-like hysteria, generalizations, street slang and gonzo-lite, endless ad hominems, other logical fallacies, ID politics. Sort of like a college-town saloon where the frat boys (and a few sorority mamas) spout off their theories and conjectures.

    Data-based writing and analysis are rare, whether in terms of economics, or energy issues: instead there are graphix of Lieberman in a tutu, Cheney eating corpses, etc., endless chitchat about the significance of the daily political faux-pas.

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