When is "creating your own blog" worth it financially?

When is “creating your own blog” worth it financially?

This is for those that are thinking about creating your own blog or already have a blog but not making any money from it. Use these cost-benefit analysis tools to explore when it is worthwhile to invest time and effort into blogging vs getting paid a fixed amount by the hour for something that does not involve blogging. It is purposefully limited to financial returns, omitting softer values that may very well make blogging worth it despite zero financial gain / severe financial losses / high short-term opportunity costs, including:

Improving your personal brand value (eg increasing the likelihood of search engine results on your name turns up something that looks professional)
Experiencing the joy of writing down your thoughts for the world to see
Improving as a writer/thinker
etc Caveat and disclaimer: This model is not a true-to-life depiction of your future financial blogging outcomes, but rather a simple educational model that is capable of sketching out possible financial blogging outcomes under specific conditions. It comes with no guarantees of any kind and the creators of the model can not be held responsible for any use or misuse of the model. With that said, let’s move on :)

Overall structure

As you traverse through the following sections, keep in mind this general assumed structure of the endeavor outlined below:

Phase 1 - Experience-gaining phase
Phase 2 - Active content creation phase
Phase 3 - “Passive” blog/newsletter maintenance phase In reality, there will be no clear-cut distinction between the phases, and you may find yourself giving up on the “passive income” ideal and instead keep working actively on the blog longer than planned.

Part 1: Estimating upfront knowledge/experience-investments

First, indicate how far you are along the path towards blogging at all today, eg. basic blogging proficiency. (If you are already up and running with a blog, no matter the size or its professionalism, leave the slider all the way to the left)

7 hours

How many hours of unpaid effort will it take to reach the relevant experience, skill levels and circumstances to be able to blog at all? Now, indicate how much work you need to do to be able to consider yourself an “experienced” blogger. Feel free to choose any definition of “experienced” that you prefer. The only assumption we make is that you won’t be able to reap any substantial financial benefits from the content you produced while “becoming experienced”. We basically assume that you start a new blog from scratch after becoming “experienced”, or at least revamp you existing blog in a significant way. (If you are already an “experienced” blogger, leave the slider all the way to the left)

130 hours

How many hours of unpaid effort work do you need to invest to be able to consider yourself an “experienced” blogger? Finally, indicate how much time you will dedicate to gaining the relevant experience:

I’ll spend on average 42 hours per month gaining experience before getting started “for real”

Hours invested each month to gain experience

Part 1 Summary

It will take you 137 hours spent over a period of 4 months until you are an “experienced blogger” and thus be able to efficiently create quality content for your blog.

Part 2: Estimating upfront investments into creating and marketing quality content

One of the attractive parts of creating your own blog is the prospect of producing content under a specific period of time and then passively reap the benefits of that work over a longer period of time. In this part, estimate the investments into producing content and partaking in activities intented to grow a large and lasting audience to a blog that you own. Once you are an experienced blogger, how much time do you plan/hope/estimate that each piece of published content takes you to produce, publish and market/forward it to relevant audiences?

5.7 hours per piece of content

Hours invested upfront in each piece of content (on average)

35 pieces of content

How many pieces of content do you plan to create?

Time spent on your blog per month

3 hours per month on average spent on content creation

Hours invested each month on content creation

Time spent on anything else than content creation (eg hosting, maintaining and tweaking your existing content, sending newsletters etc)

3 hours per month spent hosting, maintaining and tweaking your existing content

Hours invested each month to hosting, maintaining and tweaking your existing content, eg keeping the blog software online, replying to comments, making edits, etc.

Part 2 Summary

You will spend 6 hours per month over a period of 68 months (or 201 hours in total over a span of 5.7 years) on quality content creation, creating 0.5 pieces of content per month on average

Hours month-by-month spent on blog

Part 3: Visitors per month over time

Lifespan and traffic distribution over time for your content

The following values will depend heavily on the type of content you plan to create, eg if you are creating short term sensational content optimized for spreading through social media, or long term evergreen content that may be able to attract visitors for a long time via search engines and backlinks. You might also plan to keep a certain amount of created content for subscribers only / behind a paywall.

Amount of published pieces of content over time

40%

Percentage of content that will be published (as opposed to subscriber-only / paid content)

Amount of live/relevant published pieces of content over time

31 months (average content lifespan)

Average amount of months that the piece of content will be relevant to its audience

Traffic over time

828 average of visitors each month per piece of published content during its lifespan

Total/accumulated amount of visitors that has ever visited your blog

Part 4: Sizing potential returns on investment

Now, play around with the sliders below each potential business model to reflect your assumptions and specific circumstances

Monetization strategy 1 - Ad/affiliate revenue

Place ads and affiliate links at select places and reap the benefits

50%

Percentage of published content that will include ad/affiliate links

11.28€

Average net income per 1000 monthly visitors exposed to content with ad/affiliate revenue during the lifetime of the blog

Monetization strategy 2 - Build up a niche mailing list and offer exclusive content to your subscribers

60%

Percentage of published content that will include an opportunity to sign up for your mailing list

Average amount of visitors that subscribe to your mailing list per 1000 visitors

58 months (average mailing list subscriber lifespan)

Average amount of months that the mailing list subscriber will stay subscribed Amount of mailing list subscribers over time

Amount of mailing list revenue month by month

1.17€ average profit per subscriber and month

Average profit per mailing list subscriber per month during the lifetime of the blog

Part 5: What is the opportunity cost for spending time on blogging?

Above, you have stated that you will spend 42 hours per month during the “gaining experience”-phase, 6 hours per month during active content creation phase and 3 hours per month during a more “passive” maintenance phase. From where do you get/take this time? Note: “As part of paid work” means any time for which you get adequately paid by the hour to blog in some way or another. This could be as a freelancer, as part of a salaried occupation, employed as a blogger etc.

As part of paid workInstead of paid workLess sleep / free time

Phase 1 time sources (42 hours per month for 4 months)

0 hours per month on average spent on your blog as part of paid work
21 hours per month on average spent on your blog that would/could otherwise be spent on work (trading time for money)
21 hours per month on average spent on blog that would otherwise be spent on sleep / free time

Phase 2 time sources (6 hours per month for 68 months)

0 hours per month on average spent on your blog as part of paid work
3 hours per month on average spent on your blog that would/could otherwise be spent on work (trading time for money)
3 hours per month on average spent on blog that would otherwise be spent on sleep / free time

Phase 3 time sources (3 hours per month ongoing)

0 hours per month on average spent on your blog as part of paid work
1 hours per month on average spent on your blog that would/could otherwise be spent on work (trading time for money)
2 hours per month on average spent on blog that would otherwise be spent on sleep / free time

Opportunity costs per month (not including loss of sleep / free time)

84€ forfeited income per hour for time spent on own blog instead of paid work

Income per hour doing that you no longer can earn due to partial time spent on blogging.

End results: Comparing the potential return on investment to other options

Recap of your blogging endeavour: It will take you 137 hours spent over a period of 4 months until you are an “experienced blogger” and thus be able to efficiently create quality content for your blog. You will spend 6 hours per month over a period of 68 months (or 201 hours in total over a span of 5.7 years) on quality content creation, creating 0.5 pieces of content per month on average After the active content creation phase, you will spend 3 hours per month in keeping the blog / newsletter running. After 140 months (15.8 years), your blog will stop being profitable and you will have accumulated revenue of 79 146 € after spending 783 hours in total, resulting in an average income of 60 € per hour. 3% of the revenue will have come from ad/affiliate revenue and 97% from mailing list monetization. Gaining experience, creating and running the blog took away 386 hours from paid work which would have been compensated with 84 € per hour. This represents forfeited revenue of 32 447 € in total (on top of the 397 hours of less sleep/free time). In the end, creating the blog thus resulted in 46 699 € more revenue compared to not creating the blog.

Revenue (green), Opportunity costs (red) and Profit/Loss (blue) month by month

Aggregated: Total Revenue (green), Opportunity costs (red) and Profit/Loss (blue) over time

Final words

Now when you see the recap and possible future results, how does it feel? Is this a reasonable result? How well have you looked into the assumptions of revenue, conversion rates, churn etc? Remember that this is a model that allows for forecasting of ridiculous scenarios and it pays to talk to industry experts and understand what metrics they achieve, and adjust the inputs to this model to what you believe that you will be able to achieve. Also remember the dimension of risk/luck which will affect real world results dramatically.