Money, Ethics and Blogging. Pick Two?
A few months ago, I moved all my Thailand-related blog posts to a new website: Thailand Starter Kit. Since creating that website, I received a number of commercial inquiries from people looking to buy exposure on it. Main reason is the website’s prominence in search engines. My article on health insurance in Thailand alone receives close to 3,000 visitors from Google every month, resulting in between 50 and 100 requests for additional information by e-mail.
Insurance companies pay commissions to brokers. What few people realize though is that those commissions are recurring: For every year you stay with a health insurance, the broker who referred you receives another year of commissions. These commissions tend to range from 10% to 18% of your premium. In other words, up to nearly one fifth of your yearly insurance payment goes to your broker. That’s a lot of money. It explains why it’s hard to find unbiased advice on the topic: There simply is too much of an incentive to accept some form of compensation. And once someone pays you that kind of money, it’s hard to stay unbiased.
A large number of content creators nowadays accept sponsoring. Many of them do the ethical (and sometimes legally required) thing of disclosing it – in line with disclosure requirements of ethical blogging standards. A prominent and extreme example is Pat Flynn, who established a reputation through this very disclosure in the form of detailed monthly earning reports. However, I do ask myself if someone, disclosure or not, who gets paid $49,500 per month by one of their sponsors can really provide an unbiased opinion of that sponsor – disclosure or not.
It’s not that bloggers can’t make money in other ways: Selling books, asking for donations and selling advertising all provide sources of income. The problem is that they pale in comparison to what bloggers can make with endorsements. If your page gets 50,000 page views per month, that might transfer to $500 from advertising in the form of banners ads. If you endorse a service provider and have targeted traffic, the same traffic can make you closer to $12,500. That’s a strong incentive to do something that in most countries isn’t illegal.
Of course, there are many examples of people avoiding the dilemma by working the numbers in different ways.
Increasing page views to the point where traditional display advertising works is a common strategy. One way to accomplish this is to write about celebrities, crime and other emotionally charged content. That kind of content works amazingly well to attract traffic from social media. It’s also a lot cheaper to churn out than actionable advice. It might not be as useful, but it generates page views and that what determines ad revenue. An excellent example of this return-on-investment focused content creation in a different medium is Reality TV: The logical result of pitting price of content creation versus revenue potential.
Increasing revenue per visitor to the point where you don’t need advertising is another path open to specialized websites. Using content to generate leads for higher priced services powered a lot of websites in recent years. The huge majority of blog readers don’t spend a dime, but the ones that do can end up shelling out up to $10,000 and more on additional, ‘value added’ services. In a best case scenario, that’s a busines-to-business transaction that benefits everyone. In a worst case scenario, it works like a free-to-play mobile game: For every 1,000 players that pay nothing, there’s an addict – usually referred to as ‘whale’ – that spends thousands. In my experience, whale hunting is rarely ethical.
Increasing the quality of content to create a brand and attract other brands is a third option. While reality TV dominates afternoon programming, at prime time it’s higher production values that hold sway over viewers. Online you see outlets like The New Yorker or The Atlantic create the kind of high quality content that stands out to the point where it secures them market share. Another example of brand-building is the German Stiftung Warentest. The foundation has been doing product reviews since 1964 and is primarily financed through the sale of magazines in which they publish their findings. In order to maintain their unbiased stance, the foundation doesn’t accept advertising of any kind. The problem is that creating that kind of content takes a lot of resources and deep pockets: Stiftung Warentest required funding by the German government to get off the ground in the first place. Even online, where the barriers are lower, the same principles apply.
Many who blog for a living don’t have the deep pockets, extensive patience or ample resources required to go down these routes though. The temptation is to compromise. Personally, I found compromise to be a slippery slope. It’s difficult to turn back once you head down that road. If you think it’s hard to get by without generating significant income, my experience is that it’s even harder to give up income you’re already banking (even if you are now in a position where you can afford it).
Is that even a problem though? Isn’t that applying journalistic standards to an industry that has every right to be biased? Shouldn’t the law be the determining factor rather than some ill-defined, subjective moral codex? If it’s okay for soccer stars to pretend they’re driving compact cars and drinking sugar lemonade all day long, why shouldn’t bloggers be allowed to endorse a certain travel insurance?
I don’t presume to create rules for others. This is not about establishing an industry standard. For me, it is about trying to adhere to the guidelines I aspire to follow myself. Of course, I could just keep money and blogging two separate areas of my life and avoid any moral dilemma. Or would that reinforce the idea that you can only have two out of three when it comes to blogging, ethics and money? If I were to set out to combine all three, how would that look? What options are there to monetize content within that self-defined framework?
The above mentioned lead generation through content marketing – where free content is used to acquire paying users – doesn’t necessarily have to take the form of a whale hunt. It can genuinely leverage expertise to provide factional, actionable advice while at the same time raising awareness for a legitimate business model. Seth Godin would describe it as permission marketing. The challenge remains in not just capitalizing on brand and trust, but to use gained expertise to create a genuinely helpful service that could operate as a standalone offer apart from the content created.
A softer way to monetize content is to rely on voluntary contributions. Focusing on the support of true fans is something I have seen working for smaller publishers with a loyal following. Content creators use services like Patreon to finance their endeavors. How much of it is loyalty (fans paying to support the creator) and how much is commerce (fans paying to get access to exclusive contributor-only content) I do not know. Maybe it doesn’t even matter. I’ve seen a local podcast Poet in Bangkok use this very model to finance part of their production. It’s a model I think could be interesting to explore more.
What are your thoughts on this? Take the example of Thailand Starter Kit. Would you like to see more free content at the price of advertising? Would you rather have new articles created on a donation or subscription basis? Is there a product or service you would like to see offered to finance the site? Or is it better to leave money completely out of the picture – at the price of seeing less new content being published? I’d love to hear your thoughts on this in the comments of this article or by e-mail.