According to a recent case study by the University of Texas and Chitika, the top 50,000 blogs on the Internet generated $500 million in ad revenue last year. That sounds all well and good but I think the methodology to come up with the $500 million number is questionable.
Chitika took their 12,000 publishers, found their Technorati ranking and how much they made from Chitika in 2006. Then they made the assumption that the blogs will run three revenue sources and came up with a revenue number.
Using Chitika revenue numbers from 2006 and assuming that bloggers will, on average, diversify across. 3 revenue sources, and assuming that they will typically try out other sources that will generate similar revenue streams, it is safe to estimate that the total estimated revenue for their blog will be at least 3 times the revenue attained through Chitika. With the sample data set, (BlogID, Rank, 2006 Revenue) standard statistical predictive modeling techniques (in this case, the specific regression model used was a variant of the Pareto model) were used to estimate the advertising revenue earned by blogs across all ranks.
When the all the numbers were crunched, the case study came up with this summary of findings.
Ad revenue in a blog is more sensitive to the rank of the blog than what one would expect in a typical Zipf Law 80/20 curve situation. One reason for this may be the social value of advertising in a blog. If online advertising is like advertising in a mall, advertising in the blogosphere is like advertising in a country club.
I never advertised in a country club before. How does that work?
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Us small time bloggers make chump change while these big-timers are racking in the cash. Good post !
Many of these 50K blogs don’t do any serious cash, either. Keep in mind that there are literally tens of millions of us out there.
DevDad
Just putting things in perspective, $500M would account for roughly 3% of total 2006 ad revenue.
Where did the other 97% go?
Won’t be long before the Government starts inventing new ways to tax online income.
I think they are doing just fine with this already.
DevDad
Haha! Yeah they don’t need anymore encouragement here!
If you ever decide to advertise in a country club let us know how that goes for you. I have an idea for the case study. ASK THE BLOGGERS HOW MUCH THEY MADE! Maybe that makes too much sense?
I think they mean the luxury dollar is more freely spent in the country club then in a mall. Or in other words the dollar is longer in the elites Country Club then in the commoners mall.
So the blogoshpere is where the elite meet and greet?
I can’t say that I think the numbers are even remotely accurate, but the percentages probably are. Wish I was in that top 15%
I agree that the numbers are probably off by at least $100M. It is still amazing that bloggers are generating hundreds of millions of dollars in revenue, no matter how “elite” the ones they are referencing are.
DevDad
I put no faith in those numbers. For one thing they don’t clearly define what a “blogger” is. Just because you are on technorati or us wordpress does not make you a blogger.
That would amount to what $10k per blogger on average in the top 50k blogs? That doesn’t really seem like all that much when you consider John makes that in a month.
Was just thinking the same thing myself, that puts me well inside the top 15% of earners, something else for the CV.
Plus, I’m willing to bet there are product blogs that were not counted but make quite a bit as well.
I think the numbers are higher according to all the other lists out there on highest paid bloggers and the amount of bloggers that are out there.
That $500 million total is about as accurate as carbon dating. How could anybody possibly be able to come up with an accurate number for 50,000 blogs when there is no way to know how much each blog made?
$500,000,000 divided by 50,000 top blogs only come up to an average of $10,000 in ad revenue for each blog. That has to be way off with all these high paid bloggers online.
It’s off, but take the time to think about how many blogs 50,000 actually is. I would imagine #50K on the list makes
I got cut off…
It’s off, but take the time to think about how many blogs 50,000 actually is. I would imagine #50K on the list makes less than $500 per month.
DevDad
I’m never going to get this comment right.
Less than $500 per YEAR. Finally!
DevDad
John you earn more than 12-15 times than average.
That’s because John’s 12-15 times more evil than average!
nice post
seriously, John, can’t you put an end to these types of comments? This is just ridiculous.
wow, blogging is somewhat like a pyramid scheme whereby only the bigshots make the big bucks. Everyone has an equal shot to be a bigtime, so cannot complain.
Not true. In blogging, you can get ahead of those who used to be “bigshots”. That isn’t going to ever happen with a pyramid scheme. It happens in all aspects of business, and holds true into our industry.
DevDad
yep excellent point.Please read my post on my blog.its about quiting your day job (9-5) vs. starting an online business. It emphasizes that your online business has to be a good fit otherwise its a waste of time. You are very right about overtaking the bigshots. Guaranteed if you write better content than john your blog will blow-up/take off and you would begin to cash in, however not many of us are that good. I look foward to seeing your comment for my post 2 my blog. I am about to check out your blog right now!
You do realize that in a pyramid scheme everyone DOESN’T have an equal shot to be bigtime so the two aren’t at all alike.
Thats a lot of blogs…then ones at the lower end of that 50k are probably only pulling $50 a month
My guess would be that they consider the blogosphere related to a country club in that it’s somewhat a restricted market; not restricted in that only certain people can join, but restricted as in the number of the audience. Face it, the average web surfer doesn’t spend much, if any at all, time on blogs.
I think this is rapidly changing. While many are not active in the blog community, there are literally millions of people who read blogs, click advertisements, and pass along information, who are not actively promoting their own blogs, sites, etc.
DevDad
Envy those who earn a lot, I am trying my best step by step though
I agree that these stats are definitely questionable. Either way, bloggins is definitely proving to be profitable!
So I use Chitika but do not have a product blog. I am making 100 dollars a month with them for this example.
According to their theory I would be making $300 dollars a month total. But it is not a product blog.
I am making 2,000 dollar in sponsorships, 1,200 dollars in yahoo/google, and another 1,000 in affiliate revenue on top of the 100 dollars in chitika money that pays a bar tab and is tucked away in the worst earning position because it is a what the heck proposition.
This is why the study is a waste. I am bringing home 4,300 dollars and they think I am doing $300 because I do not fit the template.
Sorry folks, but unless your blog is a product blog, Chitika pretty much sucks as an earner. They miss a huge part of the market in this study because they think every blog is a nail and they are the hammer.
Tom
PS all numbers were hypothetical.
So,
if you make $16.667/mo you’re top 1%
$ 8.333/mo you’re top 5%
$ 6.667/mo you’re top 10%
$ 5.000/mo you’re top 15%
That makes John between Top 1% and 5%, if we could spread this stats over the entire blogsphere.
For me those are realistic numbers on successful blogging.
I thought the price $50 million!?
I actually took class with one of the author before. Fun to read, blog go academic..
[...] on John Chow’s blog I found a report from Chitika(pdf ) that states that the top fifty-thousand blogs brought in five [...]
So on what position is this blog?
[...] Top 50K Blogs Made 0 Million in Ad Revenue | John Chow dot Com According to a recent case study by the University of Texas and Chitika, the top 50,000 blogs on the Internet generated $500 million in ad revenue last year. (tags: blogs revenue) [...]
Thats a lot of money to be made but I guess its possible.
This should inspire us.. to get our piece of the pie..
How do we know whether we’re in the top 50K?
Does ranked #1 by Google on certain keyword makes the cut?
My guess is it’s not. Cause Internet Marketing Blog ranked #1 also not much $$$. Or some problem with the blog? Uncle Chow, big brothers/sisters here, mind to correct my mistakes? Help to educate the future generation. You will understand what i mean when u visit me
$500 million Woooooo
oooooW .
This is similar to figuring out the forbes riches people in the world. Not accurate but interesting nonethess.