A Transparent Look at How to Make Money Blogging

But First : A Business Basics Refresher

Before we get into the specifics of how to make money with your blog, let’s refresh our memories on the basics of how any business makes money. What are the fundamentals that apply in any industry?

Simply put, in order to make a profit, you have to bring in more revenue than expenses.

Put mathematically, it looks like this:

Revenues – Expenses = Profit

Revenues minus expenses = profit. Now, if the result of that equation is negative, then you’re losing money! Not a good thing!

Taken to the extreme, we can put it this way: we want to maximize revenues and minimize expenses in order to maximize profits. Make sense? Good.

Now, for some of you this may have seemed very elementary. But bear with me, as I thought this refresher to be essential to lay the ground work for where we are going next…

You see, in my mind, no discussion of how to make money (in any industry!) is complete without a discussion of both the revenue side of the equation and the expense side of the equation.

Without further ado, let’s jump into how to make money blogging…

4 Primary Ways Bloggers Generate Revenue

Let’s talk about the fun side of that equation – revenue! Because isn’t it more fun to count the dollars coming in the door than those going out the door?

In the case of blogging, there are four primary ways that bloggers can generate income for themselves. In this discussion, I’ll share with you the following:

(a) a general look at what each component entails,

(b) a transparent look at how much income each component generates for this specific blog, and

(c) some considerations when factoring in the role that each revenue stream may play in your blog.

1. Affiliate link commission

This is the most common and easiest way to start generating revenue from your blog. Affiliate marketing is defined as an arrangement in which an online retailer pays a commission to you for generating sales for them. In other words, when someone clicks on a link from your blog, you are eligible to make a small commission if they purchase something within a prescribed period of time.

How exactly does all that work? Well, in simple terms, when a blogger links to a product and you click on that link, that link is trackable. If you buy the product (or, sometimes, anything from that site), the blogger makes a commission.

From a blogger perspective, in order to be able to do this, you need to be part of an affiliate network such as rewardStyle, ShopStyle, Amazon Affiliates, and so on and so forth. This will allow you to create those trackable links and ultimately get paid.

Now, as for this blog, I have some surprising news for you: We generate very little income from affiliate commission. In fact, affiliate commission makes up less than ten percent of our income. Conversely, many of my friends in the industry make the vast majority of their income from affiliate commission!

If you’re wondering why that varies so much from blog to blog, here are some issues to consider. Affiliate marketing works best for blogs that are primarily shopping blogs. I would consider a “shopping blog” by some of these characteristics: always showing you the best deals on everyday basics, always on top of and sharing the best sales happening, and usually pushing products at a lower price point. Some people are really good at that! I’m not necessarily, nor is it my passion to do so.

Also, affiliate marketing works best for those who have huge audiences. We’re talking in the millions of followers or millions of page views. Think of blogs like Sincerely Jules or Something Navy.

A word of caution: Currently, there is significant concern in the blogging world regarding some upcoming Apple updates. This month, Apple is instituting some new policies and procedures in an effort to increase end-user privacy. And while we can all probably agree that end-user privacy is a good thing, this could make it more difficult to track third-party links, thus making it harder to earn affiliate income.

2. Sponsored content

Spoiler alert: this stream of revenue is one of my personal favorite ways to make money!

Sponsored content is essentially blog content that we produce in our voice and style that is underwritten by a brand partner. As I often explain it to outsiders, we craft marketing campaigns that (a) meet the brand’s objectives, and (b) resonate with our audience and (c) align with our aesthetic and mission.

For instance, two recent examples of sponsored content include 6 Keys to an Easy Dinner Party and 7 Tips to Create a Colorful Coffee Bar. The first was sponsored by Plated, while the second was sponsored by International Delight. In fact, we make over eighty percent of our income from sponsored content!

How do these campaigns come about? The vast majority of our campaigns come from brands reaching out to us. In some scenarios, if we have a specific story idea, we will reach out to brands. But that is much less common. When brands do reach out, we have to evaluate whether or not the opportunity is a good fit for us. And guess what? We say no a lot! As I mentioned above, the campaign has to work for us as a brand and for you as our community. We are committed to only endorsing brands we have tried and believe in. Authenticity is very important to us.

Furthermore, it’s important not to overwhelm readers with sponsored content. I recently heard James Nord of Fohr equate it to a TV show and commercials. If you were to sit down to watch a 30 minute TV show, would you want it to be filled with 15 minutes of commercials? No! The same concept applies to blog reading. Audiences have to understand that some sponsored content is imperative to keep the lights on, so to speak. But on the other hand, we as content generators must always have a healthy mix of organic and sponsored content. I’d say that mix needs to be at least 80 percent organic content and no more than 20 percent sponsored content.

What kind of blogger is eligible for sponsored content opportunities? Well, there’s more to it than just follower count! First, build a portfolio of high quality authentic work. Know who you are, what your niche is, what you do well, and so on and so forth. Then, when you start to get inquiries from brands, be ready! You need to be professional in how you communicate with brands. You need to craft beautiful, high-quality work product and submit it in a timely manner. You need to follow-up after the campaign with results of your work.

Side note: Converters vs. Brand Builders

Did you notice a contrast in how I described the ideal bloggers for affiliate link income versus those who do well with sponsored content? That divide can best be summed up by this must-read article: Bloggers: Converters or Brand-Builders?

Some bloggers are known to be converters. They can simply take a selfie wearing a certain sweatshirt, post about it, and it sells out almost immediately. Others, however, are more aspirational in nature and help build brand awareness by crafting beautifully photographed, well thought out content.

Neither is right or wrong, nor better or worse. They are just different. 

The point is that you as a blogger need to know where your strengths lie – and work accordingly! As the article points out, rarely do bloggers do both successfully.

Okay, since I’ve gotten long-winded on the first two, I’ll make the next two brief…

3. Advertisements

Advertisements are just as they sound — good ol’ traditional advertisements strategically placed throughout your blog or website. These are usually catered to your audience demographics. We work with the AdThrive network. They have been an absolutely wonderful partner to us.

4. Products and services

Finally, some bloggers venture into selling products and / or services. Those products can be digital or physical. For instance, Studio DIY has a shop filled with very on-brand products.

You might recall that last year when we rebranded and relaunched, we opened an online store! And we did fairly well, particularly with our coffee table book of Houston’s most colorful walls. But to be totally transparent, I didn’t have a clear strategy for carrying the store forward after the buzz of launching our new brand and website. We are rectifying that, and we hope to have some exciting news to share before the holiday season.

So, now I’ll pose a question to you: what sort of products or services would you be interested in purchasing from us?

Expenses

Remember when we talked earlier about the profit equation? You only make a profit when revenue is more than expenses!

Now, for some, blogging can be a relatively inexpensive business. However, for me, I have a substantial amount of built-in overhead. This might seem counter to the advice I gave above about minimizing expenses. However, there is always an exception to the rule, right? Sure, we want to minimize expenses. But, on the flip side… If you believe in yourself, it is wise to invest in your business. Especially if you are trying to build a business for the long-haul, I can’t emphasize enough the importance of investing in people, infrastructure, technology, and so on and so forth.

In the spirit of transparency, here are a couple of my biggest expenses each month: payroll and producing content. In terms of payroll, I’ve built a sizable team (the best in the business in my opinion); that means that I have to generate a substantial amount of revenue just to meet payroll each month!

As for producing content, there’s a cost associated with producing all the beautiful content you see around here. The most obvious expense is purchasing fashion-related items (clothing, accessories, etc), but it goes much deeper than that. For instance, when we produce a mural guide or travel guide, I usually underwrite all those expenses myself! From flights to hotels to cars to meals and every other incidental expense. Another example: for all those styled shoots we do (like the Plated dinner party campaign) there are expenses that come along with that too — the props we use, the talent whom we contract to help us with creative aspects like the florals, the balloons, the calligraphy, and so on and so forth.

And that’s only the tip of the iceberg. I also have non-recurring expenses like the cost to develop the branding and website you see here. Needless to say, you can quickly gain an appreciation for what it takes to run a blog. Clearly, we have to generate a certain amount of revenue each month in order to continue bringing you all this colorful content!

Bottom Line

If you are a blogger, I challenge you to take a cold, hard look at your revenue streams and your expenses. Are you making a profit? If not, what can you do to change that?

I’ll end with a brutally blunt business bottom line:

Passion does not automatically equal profit.

Definitely, it is more possible than ever to make a career out of a creative competency. But you also must know and apply some business basics to take that endeavor from side gig to full-fledged business.

So, follow these guidelines in order to mindfully build your business. Don’t forget: maximize profits and minimize expenses. That’s the name of the profit game!

As always, if you have any business questions, please feel free to reach out to me. I love helping fellow business women!