New Model Journalism

Tracking the media-funding revolution

Archive for the ‘blogging’ tag

Guido Fawkes/Paul Staines – www.order-order.com

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Websites with strong newsbrands are making a lot more profit than any of the UK’s broadsheet newspapers. They are doing so by providing information that their audience must read, and selling advertising

  • My site averages 2 million hits a month
  • Our top blogger made £3,872 per month last year
  • I sell some stories to the newspapers – why give it away if you can get £20,000 off a tabloid

The question that I am always asked is, how do you make money?  It is a ridiculous question – it is the advertising on the site.  The key to that advertising is the site’s audience.  If you don’t have a big audience, and content that your audience feel that they have to read, then you are not going to make money.  You need both size and scale.

In September 2004, I launched.  Initially, I had about 600 hits a month, half of them me, hitting refresh.  But I had a break in September 2005, I had a good story. That got me coverage in the mainstream media, and traffic went up to about 30,000 hits a month.  Then, last year, I had the McBride Smeargate story, and traffic peaked at about 3.5 million hits a month. On average, now, I get about 2m hits a month.

My competitors are the mainstream political media.  I get quite a lot more hits than The New Statesman’s web site and a few more than The Spectator’s.

I have a financial interest in Messagespace.  It was set up by some of the big bloggers including those supporting the Tory and Labour parties and some involved in political betting.  We did not have enough traffic to make Google ads pay.  Google doesn’t sell premium space, they just fill space.  We sat around for weeks trying to set up a co-op.  But the problem with co-ops is, who is going to do all the dull work like setting up a VAT registration and so on?  So, with Alex Hilton who set up Labour Home, I set up the business.  Later, Alex decided that working with me was problematic because he is a Labour candidate, so I bought him out.

We set up a conventional advertising network.  We pay our bloggers, among whom are all the main political blogs in the country, save for those owned by Lord Ashcroft.  We approach people who have traffic and respect.  That means that our fixed-costs base is very low.  I only have to worry about a server and a pretty grotty office – so it is just a few thousand a month.  That serves 25 million ad spots.  There is a very small sales team who are nearly all alcoholics, are paid pretty much on commission only – although they do have to have some guaranteed drinking money.

To give you an idea of how much money our 40 bloggers make, here are last year’s figures (they are all up by about 30% this year).  Our top paid blogger earned £3,872 a month.  The top 10% of our bloggers made £2,861 a month (a rise of 64% on the previous year).  The middle 40% of bloggers made an average of £351 a month, and the remaining 50% had average earnings of £54 a month.

Advertisers value qualified leads (sales prospects about whom there is additional information).  The more you know about your readers, the happier your advertisers are.  If you can prove that people look at your blog before they make a purchase, your ad spots are worth a lot more.

Most of the bloggers have other jobs, it is only two or three who could do this full time. Most are talented hobbyists who would do it for free and are happy enough to get a few holidays and a new laptop out of it.  But, they give us bulk and, mean that we cover the whole political spectrum.  They also mean that we can guarantee that we cover what journalists read.  Our advertising is almost entirely political:  NGOs, campaigns and corporate social responsibility interests, for example.  We don’t get much brand advertising.  Even though my audience is not much different to The Spectator, The Spectator has that luxury feel and those advertisers maybe don’t feel so comfortable with my bawdy content.

Most of the bloggers don’t notice what they are getting, because they are only getting £50 a month.  I work bloody hard at what I do, though. Application is a key factor. I am working at 6.30am, and still working at 10.30pm.  No cabinet minister has ever called me, but junior people find me easier to contact.  I do snappy, diary stuff.  If you are a pissed-off intern, how do you take revenge?  Guido is easy.

I have often written 300 words before breakfast.  I try to be first – if not first, then fast, and if I am wrong, not for long. Punctuation and grammar is mangled, but it is on the site quickly.  People come to me because they know that if it is out there, I will have it.  I aggregate material performing a curatorial role.

I put up a lot of barriers to being sued. I drew on my experience from the financial sector and set up my publishing company in a tax haven in the West Indies.  My revenue stream goes to one company, the assets are held by a foreign company. I am a foreign citizen, my web site is hosted in the USA.  If you want to sue me, go ahead – but you won’t find it very easy.

News brands are replacing newspapers. People in the media don’t seem to realise just how close newspapers are to being extinct.  If you go on the tube, people under 30 are not reading newspapers, even though the tube is littered with free newspapers.

There are some newsbrands that you probably don’t know about, but are very successful and are making a lot of money. Popbitch (popbitch.com) and Holy Moly (holymoly.com) are a celebrity websites;  Army Rumour Service (arrse.co.uk) is mainly user-generated content, but it is a profitable business.  Mumsnet.com is always in the news these days.  Housepricecrash.co.uk gets a lot of ads from companies offering services to people buying houses. They are more profitable, in aggregate, than all the quality press in Britain – because all the quality press loses money.

So, if you are doing journalism as a sacred calling, good luck to you.  If you are doing it to make money, then you need to think about audience and your advertising.

I have some alternative revenue streams.  I sell stories to the newspapers, I sell t-shirts.  I do get appearance fees.  My colleague Iain Dale makes a living from being on the News Review every night – I don’t think that my wife would stand for that.  Iain tells me that he makes over £100,000 a year from media appearances.

My selling stories might disturb some of my readers a bit.  When I can get £20,000 for a story – some kind of scandal, a politician with his pants down – I am not going to give it to my readers for free. I am going to try and play off the News of the World with the Mail on Sunday. I am in it to make money.  There have been a load of front-page stories that don’t have my name on them, but the cheque does.  I see that as a traditional agency function.

In some ways, it is better being a freelance.  Political editors know that I am going to try and play off papers against each other.  I sometimes wonder, if the story had come from a staffer, whether it would have been on page six.  Newspapers know what they are doing – but the thought that a rival is going to get a story drives them mad.

A lot of bloggers who don’t make very much money out of their blogs, do use their online presence to promote themselves. Iain Dale promotes himself as a media tart and he gets lots of consultancy.  He also runs a magazine and publishes books.  None of that would have happened without his blog.

A lot of people who work in tech, run industry-specific niche blogs that gets them lots of consultancy work. They can charge £1000 a day selling them the same stuff that they do on the blog for free.

I have achieved the Marxist ideal, I don’t just sell the products of my labour, I own the means of production.  No one can fire me.  I have job security.  And, according to what I read, I do a lot better than most journalists.

Guido Fawkes (Paul Staines) runs one of Britain’s most visited and influential political blogs with a reputation for breaking big political news stories and up-to-the-minute political gossip. He has also turned his blog into a big success commercially. Paul Staines was a founder of MessageSpace, the advertising network that represents some 40 political websites ranging from BorisJohnson.com to LabourList.

Written by Tim Dawson

March 26th, 2010 at 8:13 am

Conrad Quilty-Harper – www.engadget.com

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Engadget ‘owns the niche’ it occupies – it got there first and now up to 10 million unique visitors a month read around 50 new blog posts each day

  • Engadget’s unique selling point is live blogging at events like the Consumer Electronics Fair
  • Its writers are paid per post – some start on as little as $2 a post (which take 10 – 20 minutes to write), successful writers might earn $15 per post or $40,000 pa
  • The founders of the company – one of whom started the company writing 15 posts per day – all became millionaires when they sold out to AOL

The main thing that qualifies me to talk about making blogs pay is the time that I spent working for Weblogs Inc.  I worked for two-and-a-half years on Joystiq and Engadget.  Engadget is one of the biggest tech sites out there.  I also worked on Mahalo in San Diego.  Both were founded by Jason Carlacanis, a serial entrepreneur who made a million in the first dot com boom with the Silicon Alley Reporter.

Engadget is a gadget blog started in 2004, by Peter Rojas, Jason Carlacanis and Brian Alvey, doing the behind-the-scenes programming. Peter was the journalist and he made his name writing 15 blog posts a day from the Consumer Electronics Show.  At that time, the operation had no money and no office. When the company sold to AOL, all three made a million.

Today on Engadget, you can see 50 blog posts a day.  It attracts round 10 million unique visitors a month or 150 million page views a month.  That is around the same readership as the Daily Mirror’s site.  Engadget is now the official blog partner to Consumer Electronic Show.  And it was recognised as Adweek’s ‘blog of the decade’.

At the Consumer Electronics Show in 2005, there was just Peter Rojas.  The next year he had a small team, and the year after that, 25 writers.  Now, they have their own trailer.

I was with the company from 2005.  I wrote over 2,000 posts or a quarter of a million words. I did features, interviews, reviews, the lot, including live blogging, photos, videos.  Whatever covered gadgets the best, Engadget did. I covered the iPhone launch.  My first experience of San Francisco was sitting outside the Apple Store for 8 hours to buy one of the first phones, and reviewing it the same day.

Engadget ‘owns the niche’ it occupies.  The site achieved this by finding an area that was not being reported.  There was nothing about gadgets in 2004, except magazines that were full of scantily clad women.  Engadget put the gadgets at the centre.  They found a good niche, got there first, and they used a load of familiar web techniques. For example, they use descriptive titles, all the posts have lots of great links, and they use keywords to link back to previous posts.

Being first with news is far more important that spelling and punctuation. It is important because if you are first Google will rank you top.  Being first to post about the iPhone was probably worth more than $1m to Engadget.

The company also organises reader meet-ups.  They would get sponsorship, but essentially do the event for free.

Weblogs Inc started with $500,000 start-up money which Jason got from Mark Cuban, a billionaire friend of his.  But they never really had to use that money.  They started on a shoestring with no office and did everything possible to save money – relying on instant messaging rather than phones, for example.

Also, they didn’t pay their writers very much – although what they paid was proportionate with what the company was making.  I started on $6 a post, and each post would take me 10 or 20 minutes.  Generally I could make about $20 an hour.  By the time that I finished, I was on $15 a post and I had a tentative offer of a job.  Had I taken the job, it would have paid approximately $40,000 a year.  When I started, I was earning $500 a month, I finished earning $2,000 a month.  As the company grew more successful, it paid more.

At the Consumer Electronics Show, we would finish working at 2am, and start again at 6am the next day.  I was pretty dead at the end of a week working like that, but that is the kind of drive that the company had.  It was insanely good fun.  At that time there was not that much advertising, so the company could not pay much – it had to keep its costs down.

There are a lot of writers who started on £$2 a post – the perception was that it was worthwhile to get on board with something that was growing so fast.

Right now, AOL is hiring a lot of journalists – maybe 500 – just working for Weblogs.  They want to recruit 5,000.

The Weblogs business model works because the company never went into debt.  All their sites, like tmz.com, gawker.com and boingboing.net are very low cost. It also dovetails well with Google Adsense.  It is unlikely that a more local site would work so well with Adsense because there is just not the scale of traffic. Engadget’s traffic grew by 30% each year during its early years.

Its content is searchable and the ads are next to content.  Weblogs used Adsense, sponsorships of gift guides, banner ads and so on – none of which were unique.

Everyone who wrote for Engadget was already an enthusiast for its niche. I started off reading and site and loving it, then I found out about the editors, then I found a way to join them.  Nearly all the people who worked for them started off as readers – there was a really strong community.

Weblogs also had very high ethical standards – basically they plagiarised the New York Times code of conduct.  As a result, the company does not accept freebies, or free flights.  There were no junkets. Everything that they test has to be paid for by the company.

Live blogging is Engadget’s unique selling point.  It works because the mainstream media was doing nothing in that area.  Their readers were obsessively checking and rechecking updates on stories as they happened.  That level of interest is worth a lot of money.

Engadget is never going to go through a paywall.  Everything is free.

I joined the NUJ before I moved on to Mahalo.  After AOL bought Weblogs, the company decided to focus more on traffic, but they would not give staff benefits.  That is where I thought the NUJ could help.

Conrad Quilty-Harper is a contributor to themediablog.co.uk  Previously he worked as a contributing editor at Weblogs Inc (an AOL Company). Most recently he was associate producer on the web show Mahalo Daily. He blogs at spalpeen.co.uk and his Twitter handle is @Coneee. He is also studying for an Investigative Journalism MA at City University.

Written by Tim Dawson

March 26th, 2010 at 8:11 am