Blogging for Fun - and Profit?

Interesting article in the WSJ today about the benefits of blogging:

The best studies we can find say we are a nation of over 20 million bloggers, with 1.7 million profiting from the work ,and 452,000 of those using blogging as their primary source of income. That's almost 2 million Americans getting paid by the word, the post, or the click -- whether on their site or someone else's.

It takes about 100,000 unique visitors a month to generate an income of $75,000 a year. Bloggers can get $75 to $200 for a good post, and some even serve as "spokesbloggers" -- paid by advertisers to blog about products. As a job with zero commuting, blogging could be one of the most environmentally friendly jobs around -- but it can also be quite profitable. For sites at the top, the returns can be substantial. At some point the value of the Huffington Post will no doubt pass the value of the Washington Post.

The barriers to entry couldn't be lower. Most bloggers for hire pay $80 to get started, do it for about 35 months, and make a few hundred dollars. But a subgroup of these bloggers are the true professionals who work at corporations, serve as highly paid blogging consultants or write for sites with substantial traffic.

Pros who work for companies are typically paid $45,000 to $90,000 a year for their blogging. One percent make over $200,000. And they report long hours -- 50 to 60 hours a week.

eConsultancy is a bit sniffy about the analysis:

The first glaring problem: he uses a hodgepodge of sources to come up with his argument. He assumes there are 20m bloggers (based on data from eMarketer), assumes 1.7m of them profit from their blogging (based on information promoted by BlogWorldExpo) and assumes that 2% of the bloggers out there can earn a 'living' from their blogs (based on Technorati's State of the Blogosphere Report).

But the biggest problem here is not just the hodgepodge of data. It's that the basis for many of his claims is Technorati's State of the Blogosphere Report, which was sent to a random sample of Technorati users and which was based on less than 1,300 self-completed responses.

Assuming that 2% of the approximately 20m people who are estimated to have 'blogged' at some point in the US equates to 452,000 professional bloggers simply because 2% of the 1,300 bloggers who responded to Technorati's survey can reportedly earn a living blogging is the definition of fuzzy math.

All very proper and correct, but a tad unfair - if all analyses that melded different samples to get a high level picture of "markets that hardly exist for products only recently invented" was barred then the only available analysis would be prohibitively expensive, too late to be useful, and without the results necessarily being much different anyway (oh wait, e-Consultancy is a market research company.... ) One of the first things anybody who deals with the maths of emerging markets learns is to be able to make rough estimates within reasonable bounds from sketchy data, and then look at what you have to believe for it to be valid and test for the sensitivities. Rather, take this as a first stake in the ground and then compare it with more data as it emerges.

(Update - lots of other blogs have clamped on criticizing the numbers, some of whom are not above playing fast and loose themselves at times . To them I'd say put up or shut up - if you feel the numbers are drastically wrong, lets see the counter evidence.)

The big picture here, irrespective of the precise numbers, is that we are seeing a shift in how text media is produced and emerging evidence that the new model can pay its way. This has some major ramifications on some assumptions we make about what we are reading - not all are good news. The WSJ again:

Almost no blogging is by subscription; rather, it owes it economic model to on-line advertising. Bloggers make money if their consumers click the ads on their sites. Some sites even pay writers by the click, which is of course a system that promotes sensationalism, or doing whatever it takes to get noticed.

The United Kingdom has just had a major scandal in which an official at 10 Downing Street had planned to leak to a friendly blogger all sorts of lurid stories about the Conservatives, complete with descriptions of secret sex tapes. But all of it was to be made up, and the friendly blogger who was going to post it all thought it was an "absolutely brilliant" idea.

I always observed that the poll that often got the most coverage was the one that was different from the others, regardless of whether it was right, or whether the pollster had any track record. This is true with opinions, too: those on the extreme right or left, or those that are the most titillating, seem to drive the most traffic through their sites. The center doesn't seem to have either the edge or the passion to grab the same kind of traffic.

In other words, you will need to be far more wary of what you read in blogs, as they are far more likely to be "Advertorial" than "Editorial", Opinion rather than fact led, and extreme rather than centre-ist.

Its easy for 'Netheads to dismiss this downside diatribe as the mad meanderings of Olde Media hacks under pressure, but unfortunately, and uncomfortably, its largely and demonstrably far more true than the Blogosphere adherents are wont to admit. As with all new, high growth areas it is still somewhat "Wild West".

The interesting thing will be to see if this Wild West, like most previous ones, is eventually tamed, how, when, and by whom. The unfortunate thing for Mainstream media is that it will probably not be in time to prevent its large scale reduction in size.