Maybe that statement is an exaggeration but the point is that too many blogs are depending on AdSense as their major source of revenue. And I’d say that the major motivation that’s keeping a lot of blogs alive is the fact that they can make some money off AdSense.

While many small-time bloggers can make some extra cash through AdSense on their sites, don’t fall into the trap of relying solely on one source of revenue. This is especially true if you’re planning to quit your day job and think that you can survive on AdSense alone.

image credit: blmurch (Flickr)

The importance of diversification

Imagine that you wake up one day and Google bans your AdSense account. Will that kill 80% of your revenues? 95%?

That’s what happened to Incredimail, a public listed company (NASDAQ:MAIL) that saw its stock fall 30% today after they announced that Google has banned them from AdSense.

According to Maxim Group analyst, Matthew Weiss:

“This announcement is a big blow for IncrediMail as we believe that approximately 85 percent of the company’s advertising revenues are attributable to its AdSense relationship”

According to an article in the MotleyFool:

“Through the first nine months of 2007, revenues soared 94% to $13.3 million. The company is taking advantage of its popular email applications to launch Instant Messaging and social networking.”

If 85% of the revenues are from AdSense, that would amount to about $11 million dollars for the first nine months of 2007.

Use your earnings to invest for the future

While you are getting some decent checks from Google, set aside a part of it to invest in your continuing education and also for growing your revenue streams. Maybe you can plan to acquire some other websites. Or use some of your profits to hire writers and invest in building up new sites.

Or you can invest it off-line in traditional stuff like the stock market, CDs, forex, or pick your favorite investment vehicle.

Think of it this way. Look at what happened to Polaroid. They should have seen the trends occurring in the photography business with the advent of digital photography. Instead they were relying too much on their instant cameras which use film and look at where they are today.

When you think of photography who do you think of? Kodak? Polaroid? Hardly. I think the winners are Nikon and Canon.

So be sure to keep up with what’s happening in the industry.

Once again, I see that so many blogs are following the same layout as some A-list bloggers, you know, having the 125×125 ad blocks on the right hand sidebar. It’s like lemmings.

The supply and demand for these ads will eventually adjust their prices. However, there will always be suckers who are willing to pay more than the market price for them. While some popular blogs can charge hundreds of dollars per month for these ad spots, the advertisers will soon come to their senses if they are really measuring the results of putting up those ads.

Ad buying tips

If you’re considering buying an ad spot, be sure to set it up in such a way that you can measure the results. For example, you can use Google analytics and look at the referrals coming from the site that you’ve placed your ad on. You can look at the traffic coming from that referral and compare it to your average visitor in terms of time spent on your site, pages viewed, etc. Don’t just advertise blindly.

Another way is to set up a specific landing page and link it to the ad. Place an opt-in box and measure the conversion rate from the traffic you are getting. In some cases, it may be worth it. If you’re paying $30 per month for a spot, that means about $1 per day. If you’re getting 20 visitors per day, you’re paying 5 cents per visitor. Let’s say 1 out of 20 visitors opt-in, that means your acquisition cost per subscriber is $1. This isn’t too bad compared to putting up an AdWords ad.

Who says that Google won’t penalize sites selling 125×125 ad spots next? It would be in their interest to squash the competition for advertisers who would otherwise be advertising on AdWords.

It’s almost like the heady days of banner advertising in the first dot com boom. Everyone was into selling banner ads on their sites until the whole thing came apart. Some of the Web 2.0 properties may face the same fate. You can’t base your business model on AdSense alone.

Technorati Tags: Google AdSense, Incredimail, getting banned from AdSense, revenue streams, diversification, banner ads, 125×125 ads, lemmings

Popularity: 53% [?]

Here’s an article from the Christian Science Monitor that talks about bloggers who are making money from their blogs. It’s from Feb. 2007 but the principles still apply today.

Bloggers Can Make Money But Most Keep Day Jobs

Here’s a quote from Darren that I like:

Several highly successful bloggers also caution that there’s no free lunch. “I worked anything from eight- to 16-hour days over the last three or four years just trying to do this,” says Mr. Rowse. “And a lot of people don’t see that.”

Technorati Tags: problogging, make money blogging

Popularity: 52% [?]

Danny Choo is a blogger who has nearly 10 million pageviews and 56,610 unique visitors PER DAY in Oct. 07 (see his Oct stats here). What draws visitors to the blog is content and DannyChoo.com has tons of it, some of which are user-generated. The blog is primarily drawing anime fans and folks who came through the various stormtrooper videos posted on YouTube. (Hint, hint - that’s a good way to draw traffic to your blog if you have something funny that you can post on YouTube)

Yeah… videos like this one:

Revenue generation is through AdSense where he uses a revenue sharing model. Affiliate sales also generate revenues for the site.

So what are the earnings for DannyChoo.com?

Here are some quotes from the site:

“Google Adsense is actually the lowest generating form of income for me.”

“On a good day I get about 50 USD and make enough from it to pay for all my monthly bills (hosting, telephone, electric, gas yada yada), my monthly mags and a few figures.”

“The most I have ever made through all my affiliate programs is just over 1000 USD per day last December (06) - my next goal is to keep it a steady 1000 by Q4 of this year - nearly there. ”

Since these data are a bit dated (from around April 07 or thereabouts), going by the reported affliate+AdSense earnings, I’m guessing that the site is now making around $40,000 - $50,000 per month.

Danny used to work for companies like Amazon and Microsoft before deciding to venture out on his own. He is using the earnings from his blog to fund his company rather than taking money from VCs. You should definitely check out his site and learn from his success.

Technorati Tags: Danny Choo, blog earnings

Popularity: 80% [?]

Robert Scoble writes that ugly websites such as the one owned by Markus Frind makes more money in what he claims is the anti-marketing design. Actually, the design is much better than many websites I’ve come across. Maybe Robert’s standards are pretty high. Markus’ site which is an online dating site reportedly gets tens of millions of pageviews everyday. That translates to over $10,000 in AdSense revenue each day.

Okay, here’s my question. It’s not the AdSense revenue that boggles me. What’s intriguing is how in the world does he get that level of traffic? Tens of millions of pageviews everyday will get you 10 grand in AdSense per day. Assuming it’s 10 million pageviews per day, that’s $1 per 1000 pageview. $1 CPM is nothing to write home about…

But then $10,000 a day equals $300,000 a month!

Technorati Tags: AdSense

Popularity: 25% [?]

I read this article in Fortune about Jon Gales whose blog MobileTracker.net earns more than $5,000 per month from Google AdSense. This from a kid who is 19 and still in college. The site has been in existence for about a year and a half and gets over 200,000 visitors per month. That’s pretty good stats.

I checked the blog just now and noticed that Adsense ads has been replaced with Chitika mini malls. However, if you look at the archives, you’ll still see the AdSense ads. Take note of the color scheme for the ads. The title and text match the color of the post title and body and the URL is just a lighter shade of blue. The layout integrates the ads to make them look like part of the posts. This is a common strategy for AdSense publishers, i.e. making ads blend into the rest of the page content.

Check out his other blogs: Carbwire, GoogleRumors.

Carbwire is PR6 and has 1,210 backlinks in Google. Mobiletracker is also PR6 and has 1,790 backlinks in Google.

Also, the list of media mentions for MobileTracker and Carbwire is impressive.

Popularity: 22% [?]

If you are using Blogger to host your blog, you can now easily integrate AdSense into your blog without changing the HTML code in the template file. Interestingly, this was announced at Google Buzz under the heading “Get Rich Quick(er)”. I guess it’s get rich quicker for both the blogger as well as Google. What a great idea to increase Google’s revenue. Someone at the company probably realized how many blogs out there are not showing AdSense ads and decided to add this new feature. My only concern is that as AdSense proliferates on all the blogs, people will tune out those ads and revenues will go way down. We’ll have to see if my prediction holds true.

Popularity: 14% [?]

Ever wonder what others are making with Adsense?

If you have a minute, please fill out this short survey. I’ll share the results here once I get some data.

Click here to take survey

Popularity: 14% [?]

Make life simpler for adding Adsense to your blog.

See how it works here.

The guy who developed this plugin is Wayne Walrath (thanks Wayne!) of Acme Technologies and you can download it from here.

The plugin is easy to install. After you download the zip file, unzip it into a folder and then ftp a php file to your wp-content/plugin folder. Then go to your WP blog and under “Options”, you’ll see a link for ‘Adsense’.

Click on that link to set up your Adsense block. Now wherever you want to insert Adsense, just include a little block of text. Very cool.

Popularity: 29% [?]

If you want to get a sense (no pun intended) of what others are earning with their websites from Adsense, check out Admoolah. This site allows you to search based on the categories of websites, traffic, PR, etc. You can also contribute by submitting your monthly Adsense earnings to the database.

When I checked, the highest earning site listed was one in the “computers” category with 300,000 monthly visitors. For the month of April, it earned $16,445 from Adsense. There were 4 other sites reporting monthly earnings over $10,000. That’s a good goal to work for.

Set an amount that you would like to make with Adsense per month and write it down. Then divide it by 30 (on average) and that’s what you have to make per day. Then start optimizing your blog and post more entries. The more traffic you have the more you can earn. Once you have a decent number of readers, you can test different ad placements, ad formats, colors, etc.

Tweak and test until you reach your daily goal. Then increase your monthly goal and break it down into a new daily goal. If you keep your focus, you will reach your earnings goal.

Popularity: 13% [?]

This entry posted by Jason Calacanis reports that Weblogs, Inc. has broken the $2,000 per day barrier recently. It took them about 7 months to go from $0 to $1,000 per day but just 6 weeks to go from $1,000 to $2,000 per day. Quite an achievement. But then, they also have 75+ bloggers and 10 full-time staff.

Popularity: 13% [?]