How Do Bloggers Make Money? What Every Non-blogger Should Know
Since writing an article about how to make money blogging, I've realized that a lot of my readers and friends have no idea that bloggers make money. Interestingly, most bloggers assume that readers already know how they make money. That same realization was the motivation for an article called "Can You Trust Personal Finance Bloggers?"
Today I'm going to give you some industry tips so you, as a consumer, know how bloggers make their money. (See also: 101 Tax Deductions for Bloggers and Freelancers)
1. Bloggers make money by recommending or reviewing products.
If a blogger tells you about a product (that has a referral payment) and you use that link to buy the product, the blogger gets paid.
For example, if a blogger suggests you try Joe's Hair Tonic and you click on the link to Joe's Hair Tonic and then buy Joe's Hair Tonic, that blogger probably just made an affiliate sale. They may have received a set dollar amount or a percentage of your purchase.
How do you know if a link is an affiliate link?
Here is a detailed article that can show you, but here are a few quick rules.
- The link may have the blog address + /a short word/ + the name of the product. For example, on my website, most affiliate links are www.moneyhelpforchristians.com/go/productname.
- The link is long and has a lot of numbers or letters. For example, it might be www.adores59989893bso4.
- The blogger might have a statement at the bottom of the post that says something like "this post has affiliate links."
Why is this important to you as a consumer?
Products that have affiliate programs get more publicity. That is true of my blog, and it is probably true of other blogs. For example, I'm a fan of Charles Schwabs' fee-free ETF's, but I've never posted an article about it. I've also noticed that when blogs write about investing, they tend to link to brokers who offer them an affiliate payment — not companies like Charles Schwab.
I don't think most bloggers are out to scam readers, but since blogging is a lot of work, we do like to get compensated for our effort.
You need to know the motive — why is this person recommending this product?
I have a post that compares two mail programs: Mailchimp and Aweber. In that post, I've had readers insinuate that I prefer Aweber because it offers me a better affiliate payment. While that is not true, there is no way to defend that accusation. It does show that some consumers do not think they can trust the opinion of a blogger who puts affiliate links in his or her blog posts.
To remove any question of motives, some bloggers (like ViperChill) don't even put affiliate links where they could.
Can you trust a blogger's recommendation?
Many times you can only really know the motive of a blogger after you get to know his or her character and nature. Just know that most bloggers are not out to scam readers, but their links may or may not be influenced by their ability to make money with that link.
A blog that I enjoy following let me know that American Airlines was offering 75,000 bonus miles for signing up for a credit card. I was glad this blogger pointed it out, and I was happy to sign up for the the product through his link because I figured he should get paid for letting me know about it.
2. Bloggers make money selling text links.
If you go to a blog homepage, you might see a list of links to things like pay day loans, cash advances, or other such companies. Those links are usually put there because someone paid the blogger to put it there, not because they are really suggesting those products. Also, in articles, companies might pay the blogger to put a link to their site. However, you, the reader, have no way to know if the blogger put those links there because he endorses the product or because she got paid. Sorry.
3. Bloggers make money selling ads.
Adsense is one of the most popular ad networks, and for many bloggers, it is their biggest source of income. Adsense ads are easy to distinguish because they are labeled directly on the ad box "Ads by Google."
If someone clicks on one of those ads, the blogger gets paid. How much? There is no way anyone knows until after the click happens, and you (the reader) will never know. You should know that the blogger has almost no control over what links are included (though a blogger can manually exclude certain ads). Thus, the appearance of Google ads should not be seen as a blogger's endorsement of that product. That ad space has been sold without direct control of the content.
Some blogs also sell ad space much like a magazine where payments are made each time the ad is shown or ads are displayed for a monthly rate.
4. Bloggers make money selling their own products.
This one is pretty clear cut. When I write and sell an eBook, I make money from your purchase, but I bet you already knew that.
However, other bloggers can also recommend books written by fellow bloggers and receive an affiliate payment. As a standard, people are paid between 33%-50% to suggest books and products written by other bloggers.
Do you trust bloggers who get paid to refer products? What do you do to check to see if a recommendation is legit?