How to Create Financial Stability From Your Blog
In April, Amazon announced that it was slashing commissions in its affiliate program, Amazon Associates. In some of its largest product categories, the reduction was as high as 80%. Commissions were dropped from 5% to 1% in groceries, 4.5% to 1% in personal care, and 8% to 3% in furniture.
Thousands of blogs that relied on Amazon Associates for most of their revenue were wiped out overnight. To the ones that survived, it was a grim reminder of the importance of diversification.
If you’re like most bloggers, you’ve probably built your business on one or two major revenue streams. That might have been fine when you were starting out. But once you’ve become a bit more established, you should seriously consider diversifying your sources of income.
You especially need to diversify if:
- Most of your revenue is dependent on one or two partnerships
- Your largest partnership is more than 10% of total revenue
- Your monthly revenue fluctuates significantly
- You want to grow your total revenue, and you’ve hit a ceiling with your current income streams
Given the countless options out there, adding a new revenue source can seem like a daunting task. It’s important to keep things simple, and not fall prey to shiny object syndrome.
Fundamentally, most revenue sources fall under one of three categories:
1. Packaged Expertise
The fact that you’re writing a blog means you have some expertise in your subject, and a loyal audience that respects that expertise. So why not package it up and sell it?
You can sell expertise in two ways.
The first is to offer consulting services. While you offer a lot of useful content on your blog, not everyone is a do-it-yourselfer. Many of your readers will prefer having someone hold their hand through the learning process, and will gladly pay you for the privilege. For instance, instead of just writing articles about personal finance, offer a personalized coaching service where you guide clients to their ideal financial lives.
Alternatively, if you prefer something more hands-off, consider creating an information product. This can be a one-off purchase like an eBook, or a recurring subscription like a membership site. While info products require more work upfront, once launched, they can become a consistent source of passive income. And because you don’t have to service clients personally, info products are a lot more scalable.
The most compelling benefit of selling expertise is that you directly control the revenue source. This makes your income independent of the whims of an external partner.
On the other hand, full control also means full responsibility. You’ll have to conceive, design and execute on the product or service yourself, which can take a lot of time and effort. For these reasons, selling expertise is actually the most challenging type of revenue stream to develop.
2. Ad Space
Selling ad space is another time-tested way to generate blog revenue.
There are two main ways to sell ads. The first is via ad networks. Google Adsense is the most well-known, and provides both topic-targeted and re-targeted ads for any subject area you can think of. Another major player is Media.net, which delivers targeted ads via Yahoo! and Bing search.
The main advantage of using ad networks is their plug-and-play nature. You simply have to sign up, add a snippet of code to your site, and start earning revenue. However, networks leave you dependent on one or two big advertisers, who may change their payout structure or ban sites they don’t approve of at any time.
That’s why most sites will also want to sell ad space directly to advertisers. These are typically priced on a traffic-based or monthly sponsorship model, and will help you diversify your ad income. On the other hand, it’s not as easy to set up as an ad network partnership. You’ll have to do lots of direct outreach and build your ad base one sponsor at a time.
3. Affiliate Marketing
Affiliate marketing is a safe way to quickly diversify your blog income and create long-term earning potential for your site.
Unlike selling ads, affiliate marketing does not present a tradeoff between simplicity and diversification. Like ad networks, affiliate networks are often plug-and-play. They also offer many useful features, like real-time metrics that allow you to rapidly iterate and optimize your marketing.
And like direct ad sales, affiliate networks do not limit you to a partnership with one company. Instead, they give you exposure to a wide variety of partners, making it easy to diversify efficiently. This is especially helpful for expanding revenues beyond a single industry, which improves financial stability in uncertain times.
Also, compared to both ad sales and packaged expertise, affiliate marketing offers a wider variety of payment models, such as:
- Cost per lead (CPL), where affiliates are paid per qualified lead that fills in a contact form or completes an application
- Cost per acquisition (CPA), where affiliates are paid per successful sale or signup
- Revenue share, based on end product value
Flexible payment models allow affiliates to diversify by marketing strategy as well as partner. For instance, a blog with low traffic is unlikely to generate significant revenue from direct ad sales. But if the blog is highly trusted by its audience, it might be able to persuade more of them to sign up for a partner’s offer. For a blog like that, a CPA affiliate deal is likely to be much more lucrative than a traffic-based direct ad.
Fintel Connect is an affiliate network that specializes in the North American financial industry. If you’d like to learn more about the different financial verticals we work with, and our available affiliate programs, contact us here.