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Reader Beware! Four Ways in Which Bloggers Make Money

Here are four ways in which bloggers can make money. As readers, it is important to be aware and also beware of the methods adopted before we take a website/blogger or blog article seriously. The fact that the distinction between news and opinion is practically non-existent and most articles from media houses are not very different from blog posts make the need to understand money making tactics all the more important.

Some news:

1 If you have ordered GameChanger (my second book), you will receive in in the next few days. It will be available at Amazon probably by tomorrow as hardcopy and kindle.

2 You Can Be Rich Too With Goal Based Investing is now 30% OFF at Amazon (hardcover ₹ 278) and at Flipkart . The Kindle edition(you can use the free app to read it). is available for only ₹90.74.  The Google Play Store edition (read on PC/Tab/mobile) is also available for the same price. Grab them before the offer ends!

If you can look past the irony that this post is written by a blogger, but from the perspective of a reader, we can get started.  Please note that I am not against making money from a blog. In fact, a blog (with good content) is indispensable for a business today.

1 Income from Expertise

This is one of the cleanest sources of income. Unfortunately, expertise is a necessary requirement and that is a rare quality among bloggers.

Say I blog about physics, explaining all sorts of phenomena. A content creation agency contacts me to write material for a course that they are developing. The blog has led to a source of income. The income itself is from the author and not the blog.

If book sales can count as income (not for much!), then freefincal resulting in two book is an example of this.

I call this clean because not everyone gets this opportunity and If I am not good, the income will dry up eventually.

Many bloggers gradually make part of their website as paid content as their authority and following grow.

This is the reason a business should have a good blog. It will draw in customers and help build "trust" online - this is crucial for online visibility (not blog traffic but for branding).

What readers should know: Although expertise (or lack thereof) will be exposed sooner or later, we will live in an age of cut & paste. So before we become enticed by a blogger, we can check if random sections from the article are lifted from elsewhere. Google is pretty good for this. Even if a blogger has original content, his/her expertise could be bookish. This is a chance that we have to take.

2 Income from Advertisements

For a site which has good enough traffic, ads can be served based on a user's browsing history (ahem!) from an agency like Google Adsense, WordPress Adwords etc.  Alternatively, advertisers can approach the blogger to buy ad-space on a weekly or monthly basis.

There are two kinds of bloggers:

Type 1: those who offer the content what people want (eg. top, 10, best 25 hot stocks)

Type 2:  those who write about what people should be reading (eg. how to choose a stock).

Easy to guess which blogger gets the most traffic.

Google is well-written search algorithm with the artificial intelligence of a 5th or 6th standard student (a great feat, but it is still only as good as the user who punches in search terms if they even bother).

What readers should know: Ad income can be intoxicating. So a type 1 blogger could churn out more such content doing keyword research to get more traffic - more ad views + clicks ---> more income.  And of course, type 2 bloggers can be tempted to change strategy.

A long post with multiple uses of a keyword phrase is enough to get Google's attention (it can only discern quality like a child). Google tracks how long a user stays on an article before they hit the back button. So longer the article, longer and harder it is to realize that it is total crap. In the meanwhile, the ad income grows.

The point is that ad income can (and does) force bloggers to write content that drives more ad income.

Note about freefincal ad income:   This is not something that I am proud of. But it offsets my server hosting and plugin charges. More importantly, it serves as a buffer against losses from the DIY investor meets (you will be surprised!). It also allows me to subsidize the fee a bit.

Can I afford to pay for all these expenses from my pocket? Yes, I hope you would understand if I say 'no' to that. Rest assured, I do not pay myself a dividend from such income and I hope I do not write content targetted at more ad income.

3 Affiliate Income

From the reader's perspective, this is one of the crappiest ways to earn an income (merely my opinion of course). Affiliate income refers to commissions paid to a website for nudging readers to buy a third-party product.

It is amusing how many bloggers justify the use of affiliate links (often by hiding them and even not mentioning that there are commissions involved) by claiming that their "review" is unbiased. They need an education on what "affiliate" means.

Why is it crappy from the readers perspective? Because posts with affiliate links represent a form of gaming the system (Google). It is not illegal from the blogger's point of view, but when I search for a product, practically all of the top 10 or top 15 links are from affiliate blog posts.

Take the example of an email delivery system (from my end). It took me four years of searching to land on a plugin called mailster (previously mymail). For a one-time fee of USD 49, I could send emails to any number of subscribers.

Then I need a service to actually deliver emails. I finally landed on Sparkpost that offers a generous 50K emails free per month.  If you search for such products, you will get affiliate posts about MailChimp, Aweber etc. These are expensive services.

My point is that Google searches for such services are dominated by affiliate link posts. From the reader/users perspective (especially that of a newbie) it is hard to spot inexpensive and even free services which get the same job done. This is my problem with affiliate income.

You might dismiss this as a childish peeve, but I am convinced that affiliation is unethical. For the record, I did try it with an Amazon book link, but could not stomach it.

A gentle reminder at this point that this post is for readers and not bloggers.

From the blogger's point of view, they are getting paid for the "research" that they have put in. Yes fair enough. But from the reader's point of view, it is important to realize that bloggers research not only product but also several affiliate schemes. It is human nature to promote the product which pays more.

This is why I would stay away from all blogs that generate affiliate income.

Source: Petr Sebja

Income from Content Collaboration

This the "latest" marketing strategy. An agency that for works for a "brand" asks a blogger to write a post about an event or service in exchange for a fee. This can include social media promotion as well.  often the bloggers write as if they were "invited/chosen" to such events while they would have signed up to receive such offers from blogging portals. Some posts come with a "sponsored post" byline and some don't!

Any blogger who values their readers will not engage in such nonsense. No amount of money can replace a reader's trust. It is so hard to gain and so easy to lose it.

Caveat Lector

___________________

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8 thoughts on “Reader Beware! Four Ways in Which Bloggers Make Money

  1. Deepesh Raghaw

    Hi Pattu,

    Great post!!!

    We have a difference of opinion.
    Do not see anything wrong in trying to monetize the blog.
    And no need to be apologetic about it.
    At least for somebody like me for whom blog is the business. I have only remote presence and get all my clients from the blog or referrals. I am fee-only planner. No commissions. A little passive side income is not bad in my opinion.

    However, I agree readers should be the topmost priority. Whatever you do, readers' interests should not be compromised..

    Even I do not like the post topics such as " Best Mutual funds to invest in 2017". Clearly, it is like
    playing to the gallery and trying to game the system.

    At the same time, I do not mind a sponsored generic post from a fund house but will not carry a post on shabby product from an insurance company. However, do not see anything wrong in carrying a post on term insurance from an insurer. That I don't get such options is another matter altogether. 🙂

    I believe blanket judgement may not be right way to go about it.

    Reply
    1. freefincal

      It is easy for a blogger to justify any form of Income but trust is a matter of perception and not fact. The intentions of the blogger matter little.

      Reply
  2. Karan Batra

    I dont think that people who rely on Affiliate Income go a long way as sooner or later, the users realise that the blogger is sometimes mis-selling the product.

    A lot of bloggers rely on Advertisement Income as it helps me recover their expenses and I dont think that there is anything wrong with it till the time the content is good and ads are not spoiling the user experience.

    However, in my opinion - the best way to monetise a blog is through own products/ services.

    Reply
    1. freefincal

      I completely agree with both your comments. I have no problem with ad income. Just that it depends on search traffic and that can be manipulated easily.

      Reply
  3. Karan Batra

    And I 100% agree with your example of mailchimp, aweber etc.

    There are certainly cheaper alternatives available but everyone seems to be talking about these expensive ones only as they pay huge affiliate commissions.

    Its always better to check from multiple sources and if possible try all these online product recommendations yourself.

    Reply
  4. MJ

    Thanks for your candid writing.
    You wrote,"Rest assured, I do not pay myself a dividend from such income and I hope I do not write content targeted at more ad income."
    I believed this and admire you for this.
    I have a potentially intrusive question: With so much time and effort being spent on spreading financial literacy, when do you teach at the IIT? How do you find time for family? And possibly you have some social and social media life (other than that related to finance) as well.

    Please understand, that my question basically is related to your time management skills...

    You teach financial management to your readers, but I am equally keen to know about your time management skills- there's a great deal of potential learning there!

    Reply
    1. freefincal

      ha ha, I always say that only people with lot of money and/or no time need managing. I have enough time. So no need to manage it. I multi-task by doing one thing at a time. I teach when I have to and blog when I have to. Being an academic, my timing is flexible so family is not an issue (I think!). Thank you.

      Reply

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