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October 15, 2004

Micropayments and Blogging

Posted in: Advertising, Adsense

When I was in my first year of high school I met a guy who would change my life - ok he didn’t really change it, but he taught me a lesson which I still use today in my pro-blogging. He taught me that if you aim small you can actually make it big! Indulge me if you will as I reminisce about my friend Trent.

My most vivid memory of Trent is in an Aussie Fish and Chip shop. For some reason our class was out on a field trip on this particular day and our teacher had taken us to a Fish and Chip shop to get some lunch. We’d all been told to bring a $2 - $3 dollars to get our lunch but as usual Trent hadn’t brought any money.

Trent wasn’t the most organized person in the world and I suspect money wasn’t flowing at home and so he’d developed this wonderful skill to get by when he needed money in such situations as this.

He waited until everyone else in the class had ordered and paid for their fish and chips and then he proceeded to move around my class mates asking if they could spare a few cents. He did it in a funny/clownish kind of way and made most of us laugh in the process. Most people gave him a few cents, no one gave him more than 20 - but when he’d finished his rounds of classmates and fellow customers and the time came to order Trent proceeded to the counter and placed an order that made the rest of us look like we were just having snacks. He’d collected $3.50 - more than enough for lunch - and probably a snack on the way home after school.

None of Trent’s classmates really minded about his good fortune - after all it hadn’t really cost us much - but when added all together our spare change was significant in Trent’s eyes. Trent was ahead of his times - a forerunner in the Micro-Payments industry.

The theory is simple - get enough people to give you a small payment and you’ll earn a significant income.

My mum is a regularly user of the phrase - ‘If I had a dollar for every time I’d heard that….’ Again - my mum is onto something with such a thought. Imagine that you had a dollar, or even 1 cent, for every person that viewed a page on your blog!? Do the sums

1 cent x 1000 page impressions = $10

5 cents x 1000 page impressions = $50

10 cents x 1000 page impressions =$100

You get the idea…. Nice theory isn’t it. But how does one earn 1c, or 5c or even, dare we dream it, $1 from someone looking at a page on their website? This is the million dollar (or maybe 1 cent) question that bloggers have been pondering for quite some time now.

Indirect Payments - by far the easiest way to earn a few cents at a time from your blog is not to charge your reader directly but to find another indirect income stream. This is what most of enternetusers case studies in this blog are doing by running advertising or affiliate programs from their blogs. The Adsense program is perhaps the most widely used such system. Whilst payments per click can earn quite a bit if you pick the right keywords and can compete with the many other competing for traffic on such words, most keywords on this system pay 2-20 cents per click. Doesn’t sound much - but if you can generate thousands of clicks per day you suddenly discover the power of micro payments. Of course such an approach brings with it many challenges which I address in my Adsense for Bloggers series.

Other indirect payment systems include using impression based ads like Fastclick (they pay a small % of a cent for each impression), Affiliate programs like Amazon (they pay you 2-7% of what ever your readers buy after clicking through from your site) or Clickbank (which offers thousands of affiliate programs that pay out at a variety of rates).

Direct Payments - Whilst indirect micro payment systems are becoming quite common and increasingly easy to use direct payments from blog readers continue to be a real challenge. Many approaches have been tried in getting readers to part with a few cents or dollars for the privilege of reading website content - but few have been successful to this point. Challenges being face by those wanting to explore direct micro payments include:

- finding readers willing to part with money for something that they can often get elsewhere for free

- finding a system that will allow a quick, easy and secure way of readers paying small amounts of money (it needs to be very quick and easy - web readers have notoriously short attention spans and will not tolerate a system of payment that includes many forms, clicks etc.)

- a cheap, easy and integrated system for bloggers that manages micropayments without costing them too much (this would probably need to be a plug-in for a blogging system that is integrated within the structure of a blog).

Having said this it may be possible to generate income from readers from your blog if some of the following factors are in play:

- You have very high readership. Some of the bigger bloggers going around will occasionally run an appeal for readers to donate money to them in order to keep their blogs running. Andrew Sullivan is one blogger who has reportedly earned a significant amount in this way. Only a small percentage of readers would be likely to respond to such a request and so a readership of considerable size (and demographics) would be needed to make it work well.

- Your blog provides exceptional quality of content. If your readers cannot live without your writing you might be in a position to charge them for the privilege of reading it. Some bloggers have a dedicated, loyal and obsessed readership who might be more than willing to pay a few dollars a year to read their writing.

- Your blog provides highly targeted and/or exclusive content. Similarly to high quality content - some readers will be willing to pay for information that they cannot get anywhere else for free on a particular topic. This would probably only work on a highly targeted topics containing specialist expertise. It would not work on topics such as the many gadget blogs going around which provide readily available information that can be found in any one of up to 10 or 20 sites within ours of new products being released.

- You have a premium content/privledges option on your blog. I’ve seen a number of bloggers taking this approach. They have a free content section and a pay per view/premium content section for members or subscribers. Such readers might also get other features like posting rights, special access to your as a blogger, ability to get links to their own sites etc.

I invite your thoughts, ideas and experiences on Micro Payments on blogs in the comments section below. What methods have you tried? What challenges do you see in this approach?

Related Micropayments in Blogging Articles:

- Micropayments - Natalie Solent

- The Case Against Micropayments - Clay Shirky

- Thinking about Micropayments and the Blogging Economy - Peter Davidson

- First Fame, Then Fortune: An Alternative Look at Micropayments Potential for Social and Economic Change

- Fame vs Fortune: Micropayments and Free Content - Clay Shirky

- The Case for Micropayments - Jakob Nielsen (1998)

- Paid Content - Three New Studies - vin Crosbie


Return to: Micropayments and Blogging


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