On Blogging and Economics

 

Does a business model exist for blogging?

In other words, can a blog attract enough traffic to make money?

Well, a short economic analysis follows (for those interested in internet marketing):

Judging from the latest Nielsen ratings, there are about 47,000,000 registered blogs. Now lets assume a new blog comes into existence. Let’s assume that this blog is totally undifferentiated. Then this blog would fall under the model of perfect competition which means that assuming the blog registers with existing search engines, then the probability that this blog would be seen by a user is that same as the subset of all other blogs that adhere to the search engine pattern that would make these blogs noticable. Considering the number of blogs then (so a subset can still be in the millions) this new blog would have a very, very low probability of being “hit”, and even it is “hit” a lower probability of repeat reads.

Now say that this blog begins to differentiate itself and also masters the use of SEO. Well chances are that there are other blogs (many many in number) that do the same thing so again this blog has a  very low probability of reads and a lower probability of repeat reads.

Now lets say that this blog is so innovative, that there are very few blogs that address the subject matter that this blog addresses.

Well, chances are that the semantics that this blog uses don’t fall under any used tags, and if the blog uses mainstream tags then the people hitting on the blog are probably looking for something else implying that there are few reads, and fewer rereads. Low traffic again.

So how can this blog draw traffic to itself? well, probably by using some sort of promotion tools (word of mouth, classical media mentions etc..) ie. the same sort of tools that traditional product marketing uses. Of coruse it still competing with other blogs but it now has an “awareness” advantage. Further if this blog uses some sort of incentives (soft of like commodity products do in order to get preferential sales) then perhaps this blog may increase its traffic probability away from the commodity, perfect competition model.

YOu may ask : “hold on, there are blogs that have a helluva alot of traffic?”.

Yes. alot of these blogs started when blogging was young and indeed have had many hits (they’ve been around for years) and address a certain audience that has made a habit of reading these blogs. These blogs are also of course dealing with subject matter that is particular to this audience.

Regardless, I don’t think that we have yet discovered a strong business model relating to a profitable blogging business (there are always exceptions).