And you probably knew that blog networks, like all businesses, thrive or perish according to their ability to respond to changes in the economies in which they operate.
But what you maybe didn’t know is the extent to which the current economic struggles of Canada and the U.S. are affecting the blog networks you visit on a daily basis – Gawker, b5media, Federated Media, Splashpress (which owns this blog) and Weblogs, Inc., to name a few.
The Online Advertising Roller Coaster
Blog networks typically depend on the same business model as mainstream content networks like The New York Times – attract visitors to interesting content and sell advertising space near (or even in) the content. Their main expense is author payment; their main challenge is to get traffic that converts into ad dollars.
When AOL bought Weblogs, Inc. in October 2005 for a reported $25 million USD, the world suddenly took notice of the money-making potential that blog networks held.
With competition among blogs for ad revenue growing stiffer every day, it’s no wonder that blog networks are feeling the strain like everybody else.
“I have seen advertisers tighten up. When it comes to the choice between the fuel budget and the advertising budget, the fuel is going to come first,” says Gayla McCord, channel editor for b5media’s lifestyle blogs and a veteran affiliate marketer.
Case Study: the b5media Blog Network
Consider the b5media network, which boasts hundreds of blogs covering dozens of niche topics.
I spoke with b5media president and CEO Jeremy Wright about the company’s current challenges and how it is responding to the changing economic landscape.
One major challenge is paying bloggers fairly while keeping operating costs as low as possible. “Our biggest priority is to take care of our bloggers, but we also have to be a business and sometimes those two things collide,” says Wright.
b5media is currently re-evaluating its blogger pay structure as part of a regular annual review. The company uses analytics by Omniture to help it evaluate the success of each blog and calculate author payments.
Adapt or Starve
The key lesson for blog networks and solo blogs alike in this time of possible recession may be this: Develop quick reflexes or perish. As McCord says, “In every good business, there comes a time when pruning is necessary.”
What do you think? How can blog networks and professional bloggers succeed in a struggling economy?