Blogonomics: The Cost-Benefit of Bloggers

Thanks very much to Tyler and Brad for the kind words; I hope to be here for a while yet. But Tyler also makes an interesting point about blogonomics:

Media, like new library books, are being hurt by the downturn and the slowing of advertising dollars. I fear that the non-independent blogosphere may be in for a bit of a financial bloodbath. So often the bloggers were an "investment in long-term name and image" rather than a profit center.

There's no doubt that ad dollars are going to be harder to come by in the coming quarters. Websites are getting better and more popular, but that also means inventory is rising faster than ad budgets. And with financial-services advertising providing the backbone of many websites, the consolidation and budget cuts in that industry will hit us content providers very hard.

It's also true that if you put a blogger on payroll, it's not going to be easy for a startup site to cover that payroll from selling ads against the blogger's pageviews alone -- especially now that bloggers make just as much money as regular journalists, and a good ad sales person costs much more still.

But if you are going to invest in your own editorial content, bloggers are often a very smart way to go. They're lean, since they need very little editing and often work from home. They build a reliable readership: in a world where loyal readers are defined as those who visit five times a month or more, blogs often get readers coming back more than once a day, especially if and when the comments streams get lively. And, yes, they're cheap, compared to any other original content. On a dollars-per-word or even on a dollars-per-pageview basis, it's hard for other forms of editorial content to compete with bloggers.

If you're a monthly magazine like, say, the Atlantic, and you want people to visit your website, you need something to draw them in. You can buy traffic, of course -- but unless those bought visitors come back, that's going to get very expensive very quickly. It's generally preferable to build something great instead, so that people want to visit regularly. And one relatively easy way of doing that is to hire some good bloggers. (When I say "relatively easy", I mean that it's easier than most of the alternatives, not that it's easy.)

On the other hand, there's no law which says that every major magazine has to have a hugely popular website if it is to be a success. Yes, you have to have some kind of web presence. But elaborate websites don't come cheap, and if you're in a cutting-back mode and websites aren't your core competency, then those websites -- bloggers and all -- can quite find themselves on the chopping block much more quickly than they ever anticipated.