Is Advertising Revenue Dead as a Blogging Income Stream?

Earlier in the week I observed a conversation between two Internet marketing bloggers on Twitter which grabbed my attention.

The topic of conversation? Monetizing blogs by selling advertising directly to advertisers.

Their conclusion on the topic? It’s a dead and obsolete method of making money.

It was a fascinating conversation to observe. They gave some solid-sounding reasons for their conclusions, including:

There’s been a decrease in the budgets that companies are putting into marketing (due to the economy).
There’s much more money to be made in selling your own products and services.
Advertising, by its very nature, sends people away from your blog, to advertisers’ sites.
Online banner ads don’t convert and just distract people from what you are on about.
Selling ads directly to advertisers takes too much time and administration.

As I watched the conversation unfold I found myself agreeing with some of these points, however I also wondered if they might also be writing off an income stream that need not be mutually exclusive to other forms of income.

In my own experience of making money online, advertising has always been a part of my income mix. In the early days, it made up 95% of that mix (too much, to my mind), but even today it remains an important element for me. (Advertising made up around 24% of my income in December if you include direct ad sales and ad network income.)

Let me explain the reasons why I think it’s worthwhile to keep advertising in your mix.

The economy: rebounding more strongly for online advertising?

In talking to a number of bloggers who rely heavily upon advertising revenue, I would agree with the assessment that in many niches there seems to have been a contraction in the amounts companies are spending on their advertising. However I do know of bloggers who have seen an increase in spending in some niches.

Also, as we see the economy improve, I suspect we’ll see money return to advertising budgets—particularly in the online space. Companies are realizing the potential of online media to reach target audiences and get conversions. I suspect we’ll see online advertising bounce back bigger than it was before the Global Financial Crisis.

Your own products and services

I completely agree that bloggers should be looking at ways of developing their own products and services. I’ve written about how I’ve done this myself on numerous occasions over the couple of years, however I do think it’s possible to do this in conjunction with running advertisements on your blog.

In my own experience of blogging—particularly on Digital Photography School—I’ve found there’s a limit to how many of your own product/s you can promote on your blog.

While we sometimes talk about the “ad blindness” of readers to the advertising we run, I suspect the same can be said about blindness to your own products. If all you ever do is promote your own products, readers can switch off from those messages. Mixing things up with other people’s messages (whether they’re advertising or affiliate promotions) can actually keep things fresh (to some point).

Get creative with what you offer advertisers

I also think there’s a variety of other creative ways to weave advertising into what you do as a blogger—without just slapping banner ads everywhere. For example, a couple of things we’ve experimented with offering advertisers on dPS include:

Sponsored competitions: here, an advertiser sponsors a competition on your blog. They provide a prize, you highlight their products, and you earn income for giving them that publicity
Newsletter advertising: one of the surprises to me in the last year is that we’ve found advertisers willing to pay more for ads in our newsletters than for banner ads
Sponsored content: by this I don’t mean that we sell space on our blog for companies to actually write their own content—or even for us to review their posts. Rather what we’re exploring with companies is to have them sponsor particular posts. For example, a company might sponsor a series of posts on a topic related to its industry. They’d have no influence on the actual content—they’d simply be mentioned in the intro to the post as the sponsor of that post.

The above options just scratch the surface of what can be offered to an advertiser—particularly as part of a bundle of sponsorship opportunities.

What I’ve found is that when an advertiser buys multiple points of presence on a blog, rather than just a CPM banner ad, they’re much more likely to get conversions, and renew as an ongoing advertiser.

Is advertising revenue still in your income mix?

I’d be interested to hear if ad revenue is a focus for you. Whether you’re using an ad network like AdSense, or you directly sell ads or sponsorships, do you focus upon it?