As you know I’ve been writing for shizennougyou since 2003. I’ve been blogging, or chronologically updating websites, since 1994 or 1995, at that time running a web server called “Winhttpd” from the computer in my dorm room. My university did not yet offer web server space to students, but every dorm room was wired for cable television and Ethernet. I soon convinced the university to let me use space on the main web server normally reserved for the college’s formative central web site and the few collegiate departments whose department chairs were wise enough to create their own web pages.
I’ve been building online communities before the World Wide Web was wide, since 1991 or so, starting with a local dial-up bulletin board system. It’s only recently that I began earning money from these types of activity, and most of that income is generated by advertising.
A few months ago, I stopped sharing my income reports alongside my net worth reports. There are many reasons I shouldn’t be publicly sharing my specific income numbers, but most importantly, my accountant thought it would be a bad idea. Even when I did publish my income reports, I did so without much detail. I reported my “other income” as one number, grouping together a variety of income sources without drilling down to the specifics.
I receive many questions each month about how I earn money outside of my day job. Without sharing specific numbers, here are the major sources of my “side business” income, including each source’s percentage of the total income. The figures are based on January through April 2010.
If I write about a product or service on shizennougyou, whether it’s an ING Direct savings account or a movie that can be purchased on Amazon.com, I check to see if the company pays publishers for sending visitors to their website. I’d rather keep readers on shizennougyou, and so would most publications. If you look at major newspapers’ online presences, you’ll see that they rarely link to other websites from within their articles. In most cases, these companies do not pay publishers.
A few companies do, however. Most will only pay a publisher if a visitor completes a certain action, like opening a bank account or buying a DVD. Furthermore, most visitors who click on these links do not take any action. Therefore, very few of these links actually generate income.
I do not write articles based on affiliate relationships, and I’m very careful to avoid as much as possible any outside influence. I always share my opinions, whether good or bad, regardless of affiliate relationship.
This was the first type of advertising I ran on shizennougyou, beginning in November 2004. It continues to perform satisfactorily, though Google is temperamental. Performance fluctuates significantly, and if Google for some reason decides that this blog deserves a lower “ranking,” I could lose significant cash flow. This pressures me — in a good way — to keep writing quality articles, but it can be frustrating at times because Google’s algorithm is beyond my control.
Google has a broader effect than the effect on AdSense income. Despite competitors’ efforts, Google is the primary gateway people use to find information on the internet. Just about all of this web site’s traffic aside from regular and occasional shizennougyou readers comes from Google. Without visitors from Google, I’d be unable to attract most advertisers.
Google is a third party when it comes to advertising. Working directly with advertisers can be more profitable. I speak with a number of advertisers directly who are interested in buying advertising space on shizennougyou, on the shizennougyou Podcast, or on other websites I maintain.
Direct advertising is currently a smaller piece of the income picture than it was a year or 18 months ago. While the economy is beginning to recover, it recently has been difficult finding high quality advertisers.
Additional income each month comes from syndication rights, academic database listings, producing podcasts for other websites, freelance writing, and website memberships like the Friends of pfblogs.org. I haven’t had as much time to nurture these income sources as I would like.
Managing and growing the side income is a full-time job in itself. Add this to the full-time job of writing for and managing shizennougyou, a few hours each week managing other projects, as well as my full-time day job and managing a career (such as it is), it’s easy to understand how I’ve been spreading myself thin. This could be the reason I haven’t seen the kind of growth I would have liked over the past year.
Perhaps the key to this growth is leaving my day job. I had planned to do just that at about this time. As I hinted yesterday, the lack of growth over the past year has made that decision more difficult. This is despite earning a side income large enough to make a living, in many months expressible in multiples of my day-job income.
You can do it, too, perhaps
Part of my success must be attributable to the fact that I’ve been doing this for a long time. Often, people start blogging — particularly about personal finance, which is seen as a lucrative niche — with the sole purpose of making money. Before you set out to earn a living from blogging, I suggest you examine realistic expectations for earning money.
Updated February 6, 2012 and originally published May 6, 2010.