It seems like everything is being adversely affected by the global financial crisis, from NATO, who says that the economic crisis may force it to scale back its efforts in Afghanistan (reported by Lara Jakes of the Associated Press on January 9, 2009), to the entire island nation of Iceland. In October of 2008, Iceland was declared “all but officially bankrupt”Ě by the International Herald Tribune, as Iceland shut down its stock market and seized control of its last independent bank.
Meanwhile, the icy grip of the havoc that began with the US mortgage crisis is being felt as far away as Thailand, whose tourist-dependent economy is feeling the pain of fewer westerners traveling to its immaculate, snow-white beaches and crystal clear waters. Yes, it seems that the financial crisis has certainly hit “Main Street”Ě – Main Street in New York (also known as “Wall Street”Ě), Main Street in London, Main Street in Iceland, and Main Street in Thailand.
Bloggers and the Financial Crisis
But what about Virtual Main Street? Are online advertisers and the deluge of bloggers they support feeling the crunch of the global financial crisis? Will the next thing to start shutting down, in the style of Merrill Lynch and Bear Stearns, be the plethora of internet blogs, with bloggers imitating the bankers, standing on the street with signs like “will blog for food”Ě? Will the doom and gloom extend to favorite blogs?
Don’t count on it.
In fact, expect the opposite. The more turmoil there is in the world, hey, the more there is to write about. Whereas turning to talking heads on news channels used to be the primary source of news during a crisis, it seems now that pundits have moved into the virtual arena.
Some of the most thorough coverage of how the global meltdown started, why it’s continuing, and what to expect in the future has been online by bloggers. Economists frustrated by what mainstream reporters were covering began to take matters into their own hands: economics professors, such as Mark Thoma at the University of Oregon, launched a now influential blog called Economist’s View.
As people turn to blogs for alternative sources of news, the blogs get more and more traffic rather than less and less. More traffic and more page views translates to a more valuable site for advertisers. A more valuable site for advertisers means advertisers paying a higher rate for ads on these blogs. And all of this means”¶ more money for the bloggers.
What Drives Blog Revenue?
Revenue from monetized blogs comes from the little advertisements run in their banners and along their margins. Every time someone clicks on an ad on the blog site, the blogger gets a little money – one click can vary in profitability greatly, from mere pennies to ten or fifteen dollars. The more popular a blog, the more profits. Very profitable blogs can provide the entire monthly income of a blogger, while some popular blogs at least help supplement the blogger’s income. Even less popular monetized blogs make a few dollars here and there during their lifespan.
But during this current economic crisis, aren’t businesses cutting back on their advertising budgets? Unlikely – at least, not in the online world. Why? Paying for ads online is still far less expensive than paying for other type of advertising – such as newspaper and magazine ads, television, and radio ads. This lowered expense of advertising online could lead to bloggers making MORE money during the financial crisis rather than less; as businesses look for ways to slash their budgets, online advertisements become a more affordable, more attractive way to market their products.
Online Advertising Predicted to Grow in 2009
Forecasters at ZenithOptimedia and at Barclays Capital (formerly Lehman Brothers) are predicting growth in spending on online advertising in 2009 – which is great news for current bloggers and those looking to break into the blogging market. Of course, they are predicting less spending on online ads compared to what they predicted before the economic crisis (Zenith lowered its prediction from 26% growth to 23% growth), but this still means more money is being poured into online advertising than ever before. All in all, US marketers are expected to spend nearly $25 billion in online advertising in 2009.
Taking all of this into account, it would seem that the economic future for serious bloggers looks pretty bullish in bear’s economy.