Increasing Value in a Declining Ad Market

While there may not be any consensus on whether we’ve seen the worst of this economic recession or not, industry analysts and pundits are in agreement on one thing, the ad market will see a sharp downturn in 2009 and especially in the first two quarters. For someone who makes their living from their blog, finding out that their main source of income may be cut in half can be an overwhelming realization. To help you keep your sanity around the economic downturn and the spending cuts in the ad market, this guide will help you understand and increase value even as your revenues decrease.

Alternative sources of revenue

While advertising tends to be the main source of income for many online publishers, consider alternative sources to make up for lost revenue. Give some thought to services ancillary to blogging on your own site, such as web design and development, search engine optimization, blog consulting (blogger training, management, and editing), and contributing to other blogs. These are all skills that on a rudimentary level can be acquired online, absolutely free of cost (with the exception of your time), and will not just add value to your blog (as you improve the design and seo) but can make you additional income (from design, optimization, and consulting services – as you apply lessons you’ve learned from your blog to those of others).

In addition to service-based revenue, you can also make up for lost income by adopting additional revenue models such as donations (work better than you would think, especially for a loyal audience that understands your predicament), products (e-books and affiliates), and remember even if you don’t offer services yourself, you can always charge for lead generation.

Time to invest in yourself

While the declining market may decrease your monthly revenues from advertising, it doesn’t mean that it will decrease the value of your blog. Revenue model evaluation is only one of the many factors you should consider. The others are:

  1. What is your level of profitability (total revenue minus total cost)? Evaluate your total costs and determine whether there is any room for reducing costs. What better time to increase your profitability than when your revenue stream is decreasing?
  2. How are your search engine rankings? Take an inventory of your site and research your niche (vertical). Figure out what your ideal keywords are and determine the competitiveness of each. Look at your analytics and see what you’re already ranked for and how you can improve those rankings by improving your internal optimization.
  3. What is your uniqueness factor? It is especially difficult to survive in a highly competitive vertical as the underdog. Ask yourself, how competitive the industry is, who the competitors are, what their size is relative to you, and what their main focus is. Once you’ve figured that out, think about how you can differentiate yourself from these competitors. Why compete with them when you can co-exist in the vertical by carving out a specialized niche for yourself? Work towards differentiating yourself from the competition and providing a unique experience for your readership.
  4. How good is your demographics targeting? One of the easiest (and free) things you can do to increase the value (and stickiness, and loyalty, and page views per visitor) of your site is studying demographics information. Getting this information is a hands-off task. Just install a script from Crowd Science, configure your user survey, and collect more information about your visitors than you’ll know what to do with. Because people subscribe to your blog and visit it, you know that they’re interested in the subject matter, but what more should you know about them and how will that help you? Once you have this demographics information, you’ll know the age range of your visitors (and their maturity level), the gender split (so you know how sensitive you should be and how to distribute your content), their household income (which can help with subscriptions and monetization), and you’ll know what their preferences and habits are when they’re not visiting your website (so you can tweak the website to get them to stay longer).
  5. How good are your conversions levels? Look at your overall traffic per day and per month, then look at the average traffic per post you write. What percentage of your visitors are one-time readers (and referral traffic) and what percentage are subscribers via email or rss? Out of those, what percentage are clicking on ads, downloading your e-book, sharing a post with their friends, or leaving a comment? Use heatmaps and clicktracking software to monitor how your readers interaction with your website and optimize your calls to action accordingly. As for engagement (sharing or commenting) educate the audience about the benefits of interacting and make the process rewarding.

These are just a few ways to invest back into yourself and increase the ‘value’ of your venture even if gross revenue is declining. All of these will help you with any potential sale in the future because they increase present value of future earnings (and future income), but will also help you increase your profit margins (and income) even if gross revenues are declining.

  1. Companies and people that do these things have always done well!

    You can have billions of hits a day but conversions are what really matter, traffic isn’t nearly as important if you’re not succeeding elsewhere.

  2. Good article….

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