What’s the perfect formula for blogger payouts?

Filed as News on February 27, 2007 12:03 am

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There’s been a long discussion for a week now on Wisdump on why Blog Networks Failed which branched out at 901am with the reasoning that blog networks don’t seem to be paying their bloggers enough. Jeremy Wright took it a bit personal, wrote “Do we pay our bloggers enough?“, and was a little frustrated that outsiders are always criticizing b5media without an inkling of suggestion for improvement or an alternative solution of some sort.

I’d like to break the ice and offer a possible solution from how I see it in the perspective of a network blogger.

Offer a better starting payout than the rest in the industry.

WIN, back in the early days under Jason Calacanis, were offering at least $500 salary per month for their new bloggers. Of course there was a quota of 120 posts a month or you get subtracted $4 per post under that total (please correct me here Jason if I’m wrong). Know More Media was paying $5 per post for new bloggers and $7.50 for veterans (blogging for them for over a 6 months?). They’re even paying $1 per legitimate comment the bloggers made on other blogs. Really nice incentive, IMO. The key here is the starting payout which will really motivate your bloggers.

b5media’s $1.50 per 1,000 pageviews may seem like a nice formula but with you will eventually learn that not all niche are searched equally. So, a nice title with just 3 pictures of the Oscars at a celebrity blog could get tens of thousands of pageviews but a great entry on another blog about rag dolls may barely break 100 pageviews. The rag doll blogger might as well join the celeb bloggers and earn more per post.

The solution here is to create equitable content/traffic benefits.

Traffic Bonus

To separate a good post from a great post and to motivate your network bloggers to write more compelling and creative content, offer traffic bonus. How about a flat $50 for every post that hits on Digg, Slashdot or Reddit’s frontpage and another $25 if you get linked from any of the Technorati Top 100 blogs like TechCrunch, Engadget, etc?

Seniority Bonus

Back when I was still working for Microsoft, we used to have seniority bonus. That is, for every year you stayed with the company, you get paid an additional month on top of your annual salary. In the blog network, this can be done on a quarterly basis instead of annually (as it’s too long IMO). So, if you stayed with the network for 3 months, you get your last week’s earnings doubled for that quarter month; you get your last 2 weeks earnings doubled on your 6th month; last 3 week’s earning doubled on your 9th month; and a whole month’s earnings doubled on your first year with the network. The longer you stay, the bigger the benefits you get. Very effective for blogger retention.

Performance Bonus

If you follow the route of the base pay, make sure you get your blogger’s attention every time they turn a year more on your network. With a year-end performance assessment, you check and consult with each blogger how they fared so far and factor that as a percentage in increasing their base pay. Let’s call it profitability bonus — if at the end of the year, their blog exceeded the expected revenues, they get a cut (between 1% – 5%) of the total profit for each respective blog.

Travel & Training

Are you sending your bloggers to trainings, seminars, workshops or conferences? Do the travel bloggers get travel benefits? Are your SEO bloggers given the opportunity to go to SES? Do you conduct internal webinars regularly? Are newcomers given a manual or guidebook in effective blogging? How about a book subsidy for your literary bloggers? Do you provide them with tools, resources and research materials to make their blogging routine more effective? I have heard of blog networks that have dedicated people working for all the blogs’ link building, social media optimization, and other seo stuff as well as providing research materials for the bloggers. Now that’s professional support.

Schwag Bags

This is a non-monetary benefit but will be considered by your bloggers as a bonus being part of your network. Give them free network-branded t-shirts, caps, mugs, bags, jackets, even hi-tech headphones with mics for those who might be interested to include a podcast in their blogs. They’ll be more proud to be part of the network and you get free offline blog marketing for it too.

So, what’s the perfect formula?

I couldn’t say, really. Each blogger will look at it differently. The closest, I believe you can come up with is to mix a whole bunch of them. All the points I mentioned above are part of the salary package. So, a base pay plus traffic benefits, plus performance benefits, plus coverage, plus others will more or less hit the sweet spot for a nice blogger payout.

Remember that running a blog network is just like running a regular business or company and your employees will always look beyond the monetary benefits. It’s not always about the money but their total working experience in your network.

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  1. By HART (1-800-HART) posted on February 27, 2007 at 5:38 am
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    A lot of constructive tips in here Abe .. !!

  2. By Martin Neumann posted on February 27, 2007 at 7:55 am
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    Kudos on providing some decent food for thought here, Abe – rather that just the negativity going around on the issue.

  3. By wyzemoro posted on February 27, 2007 at 8:36 am
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    nice points abe…. this for sure will revolutionize the blog industry. professional blogger will be more inspired and determined to post creative writeup. more checks and schwag stuffs makes authors happy then they will be more creative in their posts.

  4. By Rexted posted on February 27, 2007 at 8:44 am
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    A very informative post. Now I think I have to look for a Blog network, Where I can fit :)

  5. By Jeremy Wright posted on February 27, 2007 at 3:15 pm
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    Hah, yesterday was a day where I was definitely being defensive. I hope I’m past that today ;-) This response’ll be a long one. Not because I’m defensive, but because I want to express my philosophy on pay and get some feedback on it :)

    Right now, our pay structure is base pay (which increases every review period, which is every 3 months) + traffic bonus (which is currently set at 1.50$CPM, though we’ve said we’d review this in 3 months with a view of increasing it every 3-6 months both across the network and in higher earning areas) + performance bonuses.

    I’m not really a big believer in paying people to get onto Digg or large blogs. Mainly because they’ll see that 25-50$ increase just from the traffic bonus we give them.

    In addition, we provide our bloggers with free hosting, deep discounts on schwag (we’re playing around with ways to get bloggers free schwag on anniversaries or something as well), we support their personal projects or charity drives, we’re about to give bonuses for bringing on advertisers and a half-dozen other things. We also have a “community budget” of 500-1000$/month which is dedicated to contests, birthday/baby/anniversary presents, magazine subscriptions and the like.

    But, I’ll be the first to admit it isn’t perfect. But it’s a good first step. Before we brought in the new pay structure, our average pay to all our bloggers and CE’s was about 25K/month. With the new system, that’s more than doubled.

    Sure, it can get better. And it will. But first we need to get revenue up. As b5′s overall revenue grows, so will our payouts to bloggers.

    All we’ve ever said about the new pay system is that it’s a good first step.

    I’d like to think your post is agreeing with that, Abe, as well as emphasizing that sometimes “soft benefits” are just as important as an extra couple of dollars in pay. If that’s the thrust of your post, I completely and totally agree :-D

  6. By Jeremy Wright posted on February 27, 2007 at 3:26 pm
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    Oops, should also say that we have 2 full-time people dedicated just to investing back into our bloggers. Shai on Community Services, and Darren on Training. Both have only started full-time in the last couple of weeks (Darren starts March 1st, actually).

    It’s their goal to develop an incredibly comprehensive set of benefits and resources that help bloggers get motivated, learn, have fun and stretch their wings beyond blogging :)

  7. By Abe Olandres posted on February 27, 2007 at 8:39 pm
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    Jeremy,

    Yes, what I am driving at is that the total value of being part of a blog network cannot always or simply be measured by the amount of money you pay bloggers on a per post or per hour basis. Otherwise, you’d see network bloggers jump from one network to another, whoever is paying better.

    The overall value is sometimes more in tuned with how the bloggers see their efforts, dedication and loyalty are being rewarded even with such trivial stuff like a free baseball cap. So, try a blind and completely anonymous survey and see how they all feel about your compensation package. :)

    On a side note, it is good to hear that Darren will be going on in a fulltime basis. His talents should have been tapped a long time ago. Imagine how huge/great b5media would have been had he used his creativity with each and every one of the 170 blogs in your network and duplicate the staggering success he did with his new DPS blog.

  8. By Shai Coggins posted on February 28, 2007 at 9:19 am
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    Interesting post, Abe.

    As Jeremy pointed out, the “b5media’s $1.50 per 1,000 pageviews” isn’t actually the right formula. In our recent pay schedule, we do have a sliding scale of payments that actually addressed a lot of your suggestions. So, yeah, we DO think [a lot] about how to compensate our bloggers in the best possible way. :-)

    We now have a flat monthly fee that gives enough incentive for new bloggers to come on board and at the same time, rewards those who stay with us.

    We now have a traffic bonus scheme.

    And, while we don’t pay for a lot of travel (yet?!) for our bloggers, Darren’s taking on the role as the main man for a blogger’s Training and Development.

    Schwag bags – we’re definitely working on them, as J said. :-) I’ve just recently joined b5 on a full time capacity to develop our Community and to help deliver a fuller “salary package”. While b5 bloggers are not employees (they’re hired as Independent Contractors), we definitely value them a great big deal and we want to give them as many benefits as we can possibly give them (without letting b5 go bankrupt, as no one will benefit from that scenario – except maybe those who DO want to say and to prove that “blog networks are failures” ;-)).

  9. By Jeremy Wright posted on February 28, 2007 at 6:42 pm
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    As a note, Shai wrote a great post responding to you Abe :)

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