I just picked up this ...

"It's also about a profound lack of relevance in many cases. As far as I'm concerned, I'm willing to peruse text-based ads as long as they are relevant to the content in some clear way and also clearly separated from the editorial content"

Question: Should the content be 'cleary' seperated from Ad's ?? I trust the above statement – but from an SEO , Revenue, CMS prospective. I am finding that many a time ADs and content need to be "wellmeshedtogether".. is my thinking wrong ??

An interesting topic, and one I am forced to think about a lot this year, trying to take the blog full time. OK, prepare for a personal rant :D There seems to be a simple equasion for traditional blog ads – with traditional I mean ads that are not necessarily the blogger's pick of "must buy" stuff, but more or less just related stuff:

1. the more the ad is integrated in the content, the more it pays
2. the more the ad is integrated in the content, the more it annoys
ergo
3. the more the ad annoys, the more it pays
ergo
4. bloggers who want to make more money must annoy their visitors
ergo
5. bloggers who annoy their visitors lose their readers
6. bloggers without readers lose their advertisers
ergo
7. bloggers who want to make money from blogging are doomed :D

There is another equasion. I'm only half-serious with these by showing only the extremes, but the unrealistic extremes do highlight some of the existing conflicts!
- the more relevant a service is to the blog, the more likely it will be blogged about
- the more relevant an ad is to the blog, the more it serves the readership
- the more an ad serves the readership, the better for the advertiser
ergo
- good ads will also be blogged about, sooner or later

And possibly, this leads to the conclusion: "an ideal ad might as well be a paid blog post" ... and we can add that paid blog posts are totally evil if undeclared, or if clearly marked, at least kind of annoying.

What I'm doing at the moment is to try strike a balance between ad visibility and unobtrusiveness.
I want the ads to be visible – I want to deliver value to the advertiser, I'd actually feel bad if it wouldn't work out at all – but I also want to clearly distinguish the ads from content. I also want to make ads be relevant so they add value, if possible, though this is not a must-have feature.

There are other options to escape the dilemma, like with what advertising network The Deck (with Andy Baio of Waxy.org) did by only accepting ads that the blogger approves of, i.e. that the blogger tested & liked; it's almost like an editorial choice, a "must buy" suggestion from the blogger. This makes ads more relevant to the audience, but it also somewhat blurs the lines between content and ads – the ad becomes an editorial choice. That being said I respect The Deck, and I think they have some of the coolest ads around.

Another solution is to get rid of ads but switch to donations. If ever I have donations, I will do them for the past and not for future posts. In other words, I'd ask you to donate what you believe the last 3 months of blogging were worth to you. Whatever you pay is fair to you by definition, because you evaluated the price. The opposite is to ask for a year advance pay which I'd never do; Jason Kottke did this and he soon had to realize it felt like having "1000 bosses". I mean I'd feel guilty even going to vacation or drinking a beer with money partly donated for the blog. But if you only donate for the past, then you can exactly measure how often I didn't blog, and then you can adjust payment.

I really wonder what blog payment systems are the wave of the future. At the moment, FM does a great job of organizing ad campaigns, and soon I'll see if it's enough to make it for this year. But it turns out to be a constant battle and nothing like a securely, regular paid job. I don't yet know if I'll be able to make it this year, as I've "burned" around 85% of my savings with full-time blogging, in other words the costs of living are higher than the returns from this blog. (Admittedly, costs of living in Stuttgart, Germany, are rather high – if I'm able to relocate to a different country in the future, it's much better.) Of course, I don't accept all ads just to make it, or else the blog spirit may be destroyed. That said, some of the FM campaigns running and announced sound very good – it's a matter of time vs money now, or something like that:)

Good Rant..!! :)_

1) You have articulated the blog, ad, payment issues pretty well. This seems to be the dilemma of all bloggers (i.e. full time bloggers). If paid blog's were to be like ad's then the Marqi business model has taught us --it does not work. One cannot pay bloggers to create posts on your product.

2) As for as Ad's are concerned, I feel that it has to be relevant to the content. Now I'll digress to the point of asking "what is relevance" ? how can this be defined and to what data do we have with psychographic's to peg the 'relevancy' factor down

3) FM/Waxy /B5media networks all seem to be having a model that permits a blogger to make $$$. However, I dont think that its enough money to sustain the blogger in terms of a salary and also the infrastrcture in case one has their own servers etc. So this is still a big gap in terms of professional bloggers and Revenue models.

4) I also agree that Paypal button for PAST posts seem to be an idea worth looking into. Will this mean that the "wisdom of crowds" and the "dollar bucket" will have commanalities which will help one to build ROI on blog's ? I had this same discussion on Charlene Li too.

I think this is a good topic. Its well worth the time and effort in terms of future proofing the sceanarios and like you say its matter of time vs matter of money :)_

Philipp, you've been doing some really cool things – one day one of them is going to take off big time. Maybe tomorrow, maybe in ten years :-(

A very close analogy to blogging is free local newspapers that make their money from advertisements. The rich ones are the ones that target their editorial content to bring in precisely the readers that the advertisers want. The travel feature is there to bring in the travel advertisers, the motoring pages are only there because they will bring in the motoring advertisers, and so on.

A journalist on one of these newspapers who writes purely for his own pleasure will not help the newspaper to draw in much advertising.

That doesn't help someone like you who writes good stuff with integrity. You have loyal readers, good content and a vibrant community, but your site is not commercially-focused. It's not cut-throat, it's not exploitative. It lives in the hope that the commercial world will reward good and great people. But it doesn't always work out that way.

The topic ("how to make money whilst retaining your integrity") is important to me, because I'm now at a point where I can launch myself full-time into some kind of internet business. And my available savings will last one or two years. And the United Kingdom is also a country with a very high cost of living.

But if I can find a way to keep my integrity whilst at least covering my costs, I'm ready to do it.

Volume is the secret. Sites like slashdot are profitable, but look at their formula:

1. Highlight interesting stuff that other people wrote, so that they get lots of readers, and let people talk about it (because people like to do that)

2. Run lots of somewhat-intrusive ads

3. Keep their work to an absolute minimum (don't systematically read all the comments, for example)

4. Profit!

Works for them, anyway.

Yep, covering the costs is important if one wants to blog full-time (I love blogging, so the main aim is not to make profits but to continue blogging), and only full-time blogging allows for the best quality (including such daily jobs as removing spam).