The Web 2.0 Economic Conundrum
Regulars here know that I am a huge proponent for the little guy. Hence, the name of my blog. I want to see everyone who's publishing a blog to try to make money achieve their wildest dreams (and ours). However, there's a dirty little secret we should discuss …
Context & Ripple Effects
Two days before this post, Business 2.0 ran Blogging for Dollars, profiling the handful of publishers actually earning real money from their sites — the visible peak of the curve. Steve Rubel, whose Micro Persuasion brand is built on championing small publishers, follows up by flagging what he calls a dirty little secret: for every blogger in that feature, thousands more publishing into the same ad market are finding the math doesn't work.
The post also lands a year after Read/Write Web observed that Web 2.0 naysaying had reached an all-time high, so Rubel — normally the optimist's camp — conceding an economic problem gives the skeptic argument a convert from inside the pro-blogger camp.
First-order effects
- Aspiring blogger-entrepreneurs lose their most prominent advocate's unconditional cheerleading: Micro Persuasion's audience now hears that wanting everyone to monetize and everyone monetizing are different things.
Second-order effects
- Ad networks and agencies selling blog-based campaigns to marketers face a harder pitch if even friendly voices concede most independent sites can't sustain a business on ad revenue alone.
Third-order effects
- If attention and ad dollars keep concentrating at the top of the publishing curve while the number of sites keeps expanding, independent blogging drifts from a viable livelihood toward either hobby or consolidation under networks that aggregate the long tail.
The trend: Publishing economics are repricing the long tail: as content supply explodes faster than ad budgets grow, revenue concentrates among a few winners and small independent sites struggle to clear the bar.