The questions hungry bloggers want to know: How do I make money from my blog, should I put ads on it, how much traffic to I need to make money?

The short answer is: you are asking the wrong questions.

First, pageviews aren’t the most relevant issue to selling ads.

If you are considering ads, the issue is does your topic lend itself to ads? Would a business want to advertise on your blog? Do your readers click on ads?

I have two sites that get decent traffic (not blogs). One gets 250K pageviews a month and I make about $1400/month on it (it’s about half-monetized to its potential right now I think).

My second site gets twice the pageviews. And I’ve never made more than a few dollars a month in clicks on it. Why? Different audience, different mindset.

The first site is a hobby site, it’s about how to make jewelry. The ads are for jewelry supplies and jewelry. Both of which my readers are interested in. And, when they are in “hobbyist” mode, they are also in “shopping” mode.

The second site is a free wallpaper site. It’s nice, high quality photos, but still…it’s free stuff. Hardly any relevant ads are available (when I tried that I had to keep screening out the ads for actual wallpaper). And nobody is in a shopping mood. They want their free wallpaper and that’s it. They aren’t browsing around looking for opportunities to spend money. They are looking for something pretty, they find it, and they close their browser.

And that’s fine. I have that site because I like purty pictures. I don’t expect it to make money (although I do explore various ideas now and then because money is always nice, and if I come up with a way to monetize it, I’ll let you know).

Your ability to sell ads on a blog depends more on what your content is and what kind of traffic that brings – not how much.

If your blog is about digital camera reviews – well gee, you’ve got a lot of ad options. If your blog is about postmodern gender dynamics, good luck. Maybe you can sell ads for textbooks for grad students. =)

A blog can be highly trafficked but fundamentally not ad-worthy from the perspective of ad buyers. And that’s your customer, if you are trying to sell ads.

Personally, I have 3 blogs, but I don’t plan to make money directly from them at all. I have a separate business, that pays my bills, and I blog for fun. I plan to write ebooks maybe at some point, try that out, I there is potential there if you market it well and it’s info people think they need. But monetize my blogs themselves? I think it would be pointless.

Second, ads may not be what you want to sell.

Most blogs, mine included, are better suited for being a vehicle to build awareness of your personal brand – which you can then use as a platform to sell products or services that you’ve developed. Not ads.

Ads will only work for a small percentage of blogs that are about real-world topics that are well researched and thoughtfully presented to be useful. Hobbies, product testing – those will work for ads. Anything that’s personal opinion and commentary is not going to be very lucrative unless you are well known enough that your opinion is taken as an endorsement. And it takes a lot of work to build up that kind of reputation.

Most of the time, ads dilute the personal brand that a blog is such a great vehicle for building.

If you are going to spend the kind of time/effort it takes to build that reputation, I think it makes more sense to develop your own information products as your primary business model. These kinds of products are an extension of your personal brand – it makes sense, they go together. Endorsements and partner deals (recommending each others info products) can be a supplement.

There is a lot more profit in this than selling ads. Ads are essentially selling other people’s products, which means you get just a small percentage of the revenue from the sale. It makes more sense to me to make your own products and sell those. You can make a heck of a lot more profit for less work, if you learn how to write good sales copy.

The bottom line: if you are asking the question “How can I make money from my blog?”, you need to back up.

The question to ask yourself is: “What business am I in – what is my business model?”. When you answer that, you can then ask “How could my blog help build that business?”.

In short, making money is about thinking in terms of business, and blogging is no different.

The good news is, business is a jolly fun game to learn and not so hard once you get the hang of it. =)

If you focus on strategies too early, your mind might rebel and say “I don’t want to do that. Too hard, too boring, too complicated” and then give up. Instead, I want to inspire you to have a creative and playful approach to your income by connecting you to an expanded view of money and business.

Below is a chart of two different mindsets about business and money. The first one is typical, but leads to working the rest of your life in the same way. The second is the mindset of people who build their business into an asset that makes them more and more money as they work less and less.

1. Keep earning money the way you know how. Don’t start any passive income project with the idea that it will make you rich overnight, or in the next year. It won’t. It’s a long term investment. Stay grounded.
2. Start a blog on a unique topic that you are passionate about. Why a blog and not another form of website? A blog is the easiest tool by far to create content on a regular basis without having any technical knowledge. Blogging also makes it much easier to get started in marketing your website by developing connections with the community of bloggers. Go to Wordpress.com and set up a blog there–it’s free and they have the best blogging platform (in my opinion). Get your own domain name rather than whatever.wordpress.com. It’s not required, but it’s cheap ($15) and you’ll be happy you did later, because you will be building PageRank and incoming links in Google that will be attached to your domain, not to a Wordpress subdomain. Wordpress doesn’t need your PageRank, keep it for yourself.
3. Commit to three things:
   1. Write a new post every day (or at least several times a week).
   2. Learn everything you can about blogging and passive income. Start at www.problogger.net. Consistently apply what you learn to your blog. Research affiliate marketing, e-commerce, copywriting, SEO, ebooks, and anything else that piques your interest.
   3. Develop your online presence. Comment on other blogs in your niche or related niche. Get a profile on Zaadz and connect to others with similar or complementary specialties.

If you do the above and sustain it for a year, you will have:

1. A blog with a decent readership.
2. Enough knowledge to start making some money with your traffic.
3. A good idea of where you want to go next.

If you decide after a year that you want to start an online store drop-shipping golf clubs instead, you will be starting with a much better knowledge of online marketing, and at least one site that gets traffic and has some PageRank which can provide a substantial boost to other projects you wish to start, especially if they are in a related field.

The best way to learn is to jump in. Whatever your passion is, there’s a successful niche in there for you. Go for it!

Hi Emma,
I ran across this [Genbucks] while going through Craigslist job listings & wondered if you would give me your take on it. Since your SECP presentation my situation has changed from employed to a mixture of job hunting & developing my own freelance/residual income models. In time I want to create a site or two along the lines of your beadage.net — & this thing is a very different animal! But how different really? Can you comment? Have you heard of this company before? They seem to have an element of a pyramid setup which makes me a bit uneasy (not to mention the content!)
Thank you,
Marsha

Great question!There are a million such “opportunities” on the web. Do a search for “turnkey website” or “drop shipping” and you will see this is a huge market segment. There are many websites that will offer, either for free or for a setup fee, to create a website for you that is based on a template and contains millions of products. They will expound on how many features their store has and how much *potential* money you could make. It all sounds good.

The problem is that you still need to market those products, and just having a website that anyone else can also have for free will not give you any sales.

Think about what they are offering: a website template (how many other “stores” have the exact same one?). A set of products (how many other “stores” are selling the exact same products for the exact same prices?). I put “store” in quotations because unlike a brick-and-mortar store, where you have to put some thought and planning into setting it up, stocking it, and where you locate it, you literally can set up an online store in about 10 minutes. What they are offering is a process they have automated so they can set it up instantly. And it really is amazing that we can now set up something with so much potential so quickly. but it’s still just potential.

The truth is that it’s possible that with dedication and a lot of marketing you could probably turn one of their template stores into a business. But chances are you won’t, because there’s no passion behind it. Do you really feel excited about selling anti-impotence pills or anti-acne cream? Are you going to put the time and energy into marketing it and growing the business? I doubt it.

All of that potential doesn’t turn into actual sales without a whole lot of effort. And that is the same effort you are going to have to put into any venture that will pay off. There really is no quick easy “get rich quick” scheme, and if someone offers you one, notice how much money they stand to make if you believe them. What is their income model?

The one thing that none of these “opportunities” can offer is the one thing that will make your products sell: uniqueness. They can’t tell you what your passion is that will attract customers. They can’t tell you what your unique knowledge is that will help you find a niche that is ready for you to offer your wisdom in the form of information or a product that solves a problem in a way that no one else has yet. They can’t give you innovation or creativity or knowledge of an industry or a sense of mission. And all of those things are what go into a business that is something you will be dedicated to, that will be marketable, that has a purpose in the world and will be successful and fulfilling.

But I hear that you want to get started on doing something in the direction of passive income. Here is my advice for anyone who is starting a passive income site from zero.

Sincerely,
Emma

I pay you $60. You work one hour for me.

Problems with this system:

• Your income is capped by the inescapable limit of the number of hours in a day.
• You have to keep working day after day, year after year.
• You get no return for each hour of work except the wage you have assigned yourself.
• You are basically a wage-slave to yourself.

This is what most self-employed creative service providers do. Until they burn out or get smart.

Streamlined Service Packages

I pay you $60. You work 30 minutes, because you have created a system that allows you to implement $60 worth of work in 30 minutes. I am happy (I got my $60 value).

How to do it:

1. Figure out a particular type of client that has a particular set of needs.
2. Create (or find) a tool or system that you can implement for each of this type of customer that will meet or exceed most of those needs.
3. Customize it for each customer (add value).
4. Charge a flat fee for each project, rather than an hourly rate. (Price on value rather than on the number of hours you work).
5. Each time you do a project with your system, use it as an opportunity to refine it and add value, so you can charge more next time.

Examples:

1. For Red Acorn Design, I created a website back-end for small e-commerce sites. I customize the front-end for each one, and I drop in the new design each time.
2. If you don’t want to create your ow, you can sometimes re-brand other peoples. Search for “white label software” or “rebranded software” on Google.

Product + Automated Delivery

I pay you $30 for an ebook you wrote. You worked for a month to write it and get it up on your website. But you work 0 minutes for each sale, because the payment and delivery is set up automatically. Furthermore you can sell a potentially infinite number to a potentially infinite audience. You focus your time on marketing and drinking martinis.

How to do it:

1. Turn some of your creative capital into a packaged product that you can sell.
2. Automate the delivery of this product to reduce overhead.

Examples:

• Ebooks are a popular idea right now because they involve very little overhead to produce or distribute. (They still require marketing of course).
• Photography: selling your photos through a stock photo site and getting a royalty every time an image sells.
• Write a book, or make a CD and get royalties from each sale.
• Write term papers and sell them on the internet (no kidding! I made a few hundred dollars selling some papers I wrote in college through Academon).
• Set up a regular product store but automate fulfillment through drop shipping or similar solutions. Amazon offers order fulfillment services now—they will stock and ship your products for you.

Recurring Income Model

I pay you $10 a month to provide an ongoing service. You work 10 minutes the first month setting up my account. I ask you a short question once every 6 months or so that takes you 2 minutes to answer. Over time, you build up a client base of around 500 customers also paying you $10 every month. You make $5000 a month and spend 2 hours a day setting up accounts and answering questions. Eventually you hire a monkey to do that so you can nap more.

How to do it:

1. Find a product or service people have to buy every month or year. Try to find ones with minimum recurring work to go with it. For instance, most of my web hosting customers, once they are set up, have few questions. However, I do have to support them in an ongoing capacity and make sure the servers don’t crash.
2. Outsource or hire people to do the recurring work (like support), making sure it is cost-effective.
3. Create automated systems for billing, etc.

Examples:

• A classic example of this is rental income: buy a property, charge rent, and hire a property management company to deal with the tenants. You have to make sure the rent covers the cost of that for it to be generating income. If not, it could still be a good way to build capital (equity). Read Rich Dad, Poor Dad for more on this.
• Create a popular website and sell advertising on a monthly or yearly basis. (As well as using Google AdSense of course.)
• Resell a service that is related to your normal offerings. That’s how I started with web hosting: reselling it to my web design customers. Many online services offer this option. They sell you the service wholesale and you resell it to your customers at a higher price and pocket the markup. Search for “reseller” or “white-label” services. For instance if you offered a newsletter writing or development service, you could resell a system that lets people send out the email newsletters.

Affiliate Programs

I click on a link on your website to a product you recommend, and I buy it. You earn $5 from the sale. You did no work at all. Furthermore, you have a popular site so that happens about once a day so you make $150 each month for that link.

How to do it:

1. Figure out what products you can promote to your customers that offer a commission.
2. Put links to these products or services on your website (with your recommendation).

Examples:

• I link to/recommend the following things on my web design website:
  • Merchant account (for e-commerce) and PayPal
  • Shopping cart software
  • Stock photo sites
• I have a hobby site about beading where I link to a beading magazine, several bead stores, and many bead books and beading supplies from Amazon.

Workshops

I pay you $60 to attend a 4-hour workshop. Forty people attend. You make $2400. You have worked 4 hours giving it, 6 hours preparing it, and 8 hours promoting it, which averages out to $133/hour. Although that’s not much more than your hourly rate, you are happy because your promotion efforts also promoted your website, where you resell services and recommend affiliate products. You also used some of your workshop notes as part of your new ebook, and the rest as keyword-rich content for your website, attracting more search engine traffic.

While this isn’t passive income directly, it can help your passive income efforts if you leverage everything you create.