Ensight – Jeremy Wright

It’s been an interesting week of criticism of b5media. We’ve been criticized for everything from selling a site that we never sold (the blogger was confused), to buying a site at a discount and turning a profit almost instantly, to our entire industry failing, to now not paying our bloggers enough.

Personally I think this is great. While I don’t appreciate being criticized inaccurately, the latest post on paying bloggers is fantastic. The truth is that there’s no “perfect” way to pay bloggers. So anyone who’s thinking about a solution (and, yeah, I’m a firm believer in anyone who’s complaining about something having a solution as well (hint hint, poke poke David, heh)) is only helping us out

Do We Pay Our Bloggers Enough?

So, do we pay our bloggers enough?

The short answer is… No.

In fact, I don’t think we ever could. I believe our bloggers each deserve fantastic wages for what they do, even if they only work 2-4 hours per week. I believe that every day our bloggers work some serious kind of magic that I’ve never seen before, and that no sane company would be able to pay them what they’re worth.

So the question isn’t do we pay them enough compared to what I want to pay them, but do we pay them “enough” compared to what the industry would pay them.

Before I get into this, though, 3 points:

1. Most people like to point out people who make a lot of money as examples of the potential of “going it alone”. The truth is, that these people either know a whole lot about things like design, programming and web design / web hosting, or can pay people who do. This isn’t true for most bloggers.
2. It is always “possible” for someone to earn more. But with the current “standard” mix of adsense, Text Link Ads and BlogAds (or mix any other 3), most bloggers won’t earn more than 100-200$/month. And it’ll take them at least 6 months to get to that point.
3. The monetary value b5 brings is really only about half the picture. Not having to worry about design, programming, hosting, etc, is worth (in industry terms) about 250$/month (that’s what you’d pay an outside firm to manage the day-to-day of your websites, even if you had the money).

Do Others Pay Their Bloggers Enough?

In order to really figure out if our pay model is “enough” compared to the industry, we need to know what the industry pays:

1. Gawker pays 2-5K/month (with some bloggers earning upwards of 10K, though they do more than just “blog”): this is for full-time work, and often for 10+ posts/day. This works out to about 20$/hour and about 10-15$/post. (this was at last publication and may well have changed)
2. Weblogs, Inc pays somewhere between 500-1000$/month to most of their bloggers (some earn more, some less): this is for part-time work, in which they write 100-150 posts per month. This works out to about 5$/hour and 5$/post. (this was at last publication and may well have changed)
3. Most other smaller networks either pay per post (4-6$ being the norm) or revenue share (in which bloggers earn 100-150$/month/blog, averaging out to about 3-4$/post).

So the industry average is about 10-15$/post and 1-2 posts per hour. Give or take. Some will be higher, some will be lower.

The History of Our New Pay System

b5media started doing revenue share. Revenue share was great for two key reasons: 1) it motivated us to do an okay job selling, because more sales meant more money for us, 2) it meant a fairly equal relationship between b5 and our bloggers.

But, there were some problems with revshare. Most notably: 1) it often took some time for ad programs like Text Link Ads to start earning bloggers money, so they could go several months earning just 20-30$/month from AdSense (note: we didn’t take any of the first 100$ a blog earned, feeling it was kind of cheap to be splitting so little money) and 2) it was never clear until we actually put all the data in what any given blog would earn any given month (for us or the bloggers)

So we worked a lot internally on a new solution. We considered paying per post. The problem was that that’d cap bloggers earnings. It’d pay someone who wrote a crappy post the same as it’d pay someone who got on the front page of Digg, Slashdot and TechCrunch. And, while we believe all content is valuable, we also believe people should be rewarded when they do something that brings us extra revenue and visibility.

We also considered paying hourly. The problem was that that would reward people who typed slower disproportionately. We then went and tried to devise this big formula which tried to pay for “value”. Something like a certain amount for posts, a certain amount for comments left, a certain amount for incoming links, etc, etc, etc. It was all very convoluted. And while it ended up paying bloggers a decent amount for doing things that were important, it lacked 2 critical things: 1) clarity and 2) clear upside for when the blogger brought significant value to b5.

So we came up with the new system. The post I linked to before says it’s “100$ + 1.50$/1000 pageviews”. That’s not quite accurate, but it’s close enough for argument’s sake. Assuming someone does their minimum post level (24 posts/month), and that their blog does about 50K pages/month (close to the average across the network), that would give the “average” blogger…

175$/month. Which works out to 7.30$/post, about 15$/hour and a CPM of about 3.50$.

All of these are fairly close to the industry average. Now, a chunk of our bloggers would tell you they don’t earn this, which is the problem with averages. Quite a few earn more. Quite a few earn 150-250$, but they post a lot more so the per-post and per-hour rates are lower (but, their blogs grow faster as well, which is kind of the point of this system: reward people for the value they bring to the network).

Do we pay our bloggers enough? Hell no. But we pay them within the range of industry average (at the higher end of it, even). And, to be clear, this payment system is in beta. Every 3 months we review the rates, and if an increase is appropriate we put it in place. Oh, and while it might not seem perfect, we got 130 bloggers to agree to it. And getting 130 bloggers to agree to anything is a pretty good sign that calling it’s neither unfair nor truly unbalanced.

Could it use tweaking? Of course. Should our bloggers earn more? Damn straight. But trust me, it’ll be us and our bloggers who are complaining about it long before anyone outside is.

Could You Earn More On Your Own?

Now, the flip side of all of this is what David alluded to, and what quite a few others keep saying: sure, being paid by b5 is alright, but you could earn more on your own.

Which is kind of like saying “yeah, your Prius gets great gas mileage, but if I could only hit the miles per gallon my car said when I purchased it I’d do even better”. Theory’s great. Practice is entirely different.

About half of the blogging world earns less than 100$/month on AdSense.

The harsh reality is that it takes 4-6 months for a blogger who is truly trying (ie: working a few hours a day) to get to “coffee money” (ie: 3$/day, ie: 100$/month). It’s not that it’s impossible. It’s that even with all of the fantastic information out there, it still requires traffic, visibility, design, hosting, platform tweaks, reading and emailing other blogs, etc. Before you even write, it’s not unusual for a blogger to spend 20+ hours/month on menial things.

During that 4-6 months that a blogger is building their earnings, a blogger will earn about 250-300$ (just using a standard averages curve). During the same 6 month period, if we use the figures David supplied above, a b5 blogger will earn about 500-700$. A difference of, let’s just say 350$ for argument’s sake.

It would then take our young blogger about 3 months to recoup that 350$. At which point their b5 blog would have earned them another 500$.

Really, running standard average curve-based math, it would take the average blogger 1 year to beat out the average b5 pay. In that time, they would have worked 100-200 hours on the things b5 provides for free. But even factoring that in, the average blogger will earn more than the average b5 blogger in 14-16 months.

Some will earn more. But then we have bloggers who are earing 3-5K/month after a year. Some will earn less. But then we have bloggers who only earn 140-150$/month and won’t ever earn more than 200-250$/month because their blogs are so niche. But, then, those bloggers probably wouldn’t earn more than that on their own. If you can find a blogger who’s working full-time who writes 24 posts per week and works less (and has always worked less) than 5 hours per week on their blog including posting I’d be very, very impressed.

Conclusion

So what’s the point of all of this? There isn’t one.

1. People who work their butts off at blogging will earn more than people who don’t.
2. People who know programming, design, hosting and advertising will earn more than people who don’t.
3. People who really try and grow their traffic through every means imaginable will get more traffic than people who don’t.

Anything else is conjecture. Will someone earn more in 2 years than our bloggers do on our pay scale right now? Sure. But if we increase that pay scale by 50-75%? How about if we increase the base pay to 250$? Maybe.

The truth of the matter is this: lots of people who out there know a lot about making money online. But if we created an ad unit where we guaranteed other bloggers 1$CPM, you can bet we’d have tens of thousands of bloggers all over it in a few months. And that’s effectively what we do for our bloggers.

Could we pay them more? Yeah. Do we wish we were paying them more? No doubt. But as a first step in a 1-month old pay system?

It’s not a bad start.

Have A Better Way?

As always, while we’ve put a lot of time and effort into this… And while our bloggers have put a lot of time and effort into this, we’re more than happy to hear other ideas for ways to pay bloggers that are fair, simple (anyone can look at their stats and know what they earned *that day*) and doesn’t make b5 lose money.

Have a problem? Propose a solution