You might have noticed a lot of recent complaints about what’s known as “page view journalism.”
Thanks to the way online advertising works, many online publishers push out tons of daily content, most of it filler. Or it’s overtly controversial — not on its merits — but for the sake of controversy (and page views).
Many attribute this approach to greed. I attribute it to a marginal revenue model.
Online advertising has grown by leaps and bounds since its collapse at the dot-com implosion. And yet it’s still not the best way to monetize content and run an online business in 2012.
1. You Need Lots of Traffic. Lots.
A general rule of thumb is that you’ll need a million monthly page views before online advertising will begin to pay off. You’ll need more in highly general niches (like celebrity), and less in highly specialized ones where advertisers will pay a premium to reach certain people (like mesothelioma).
Regardless, you need a lot of traffic. And that’s not easy to get, considering you’ve got serious competition for the topics where the traffic wants to go.
As we’ll see below, you can make a lot more money from a lot less traffic with a content marketing model that sells products or services. As an entrepreneur, you want to maximize profits while minimizing expended resources, which means advertising will be an illogical choice in most cases.
I’m sure someone will tell me in the comments that they’re making plenty of money from less traffic. In response, I’d ask you to define “plenty.”
I’d rather focus on making lots of money, rather than worrying about generating lots of traffic to make less. But that’s me.
2. Advertising is Less Profitable
So, after 6 years, Copyblogger is right at the million-page-view per month point. If we had an advertising model, we would have made about 20 times less revenue last year in comparison to the model we have, which is selling software and training.
And if we added advertising now, we’d be sending people away from our own products and services. Not gonna happen.
Even among truly high traffic sites, advertising rarely stays the primary profit center. Advertising revenue can cover expenses and turn a profit if you have a ton of traffic, but what next?
Take the tech blogging world. Sites like TechCrunch and Mashable get ridiculous amounts of traffic (well, TechCrunch used to). And they both got into the conference business as fast as they could, because that’s how you boost profits – by selling seats at an event, not with more eyeballs on pages.
Tom Foremski spells out the real peril of page view journalism in one paragraph:
The dirty little secret of journalism’s focus on page views is that the value of each page view is decreasing, because the value of online advertising is decreasing. This means it’s a strategy that will likely lead to failure. Media organizations need to adopt a multi-revenue business model, or what I call a Heinz 57 model.
The thing is, you can start your company by selling products, services, or events, and make more money without needing all that traffic. Even if you hit motherlode traffic, you’ll end up needing the Heinz 57 approach — so start thinking about it now.
3. People Don’t Love Advertising
I don’t know about you, but what I love about business is making stuff people love. When people are excited about the things you create and the service you provide, it’s a bigger rush than the money.
Take Apple, for example.
People love Apple products. They stand in line to spend hundreds or thousands of dollars on Apple stuff. They wait by the front door for the new iPad to arrive.
People don’t love advertising. At best, they tolerate it, and at worse, despise it.
When you have an advertising model, you’re not selling people something they love. You’re selling them to advertisers, which puts you in an adversarial position to the audience. Plus, you’re polluting the experience of consuming the content that attracted them to you in the first place.
Google is the greatest advertising engine ever devised, because it’s the new Yellow Pages on steroids. When in search mode, people are happy to see highly relevant advertising.
People still might not love it, but at least they don’t hate it. The problem is, you’re not Google.
Why not make stuff people love?