Orders of magnitude


In 2005, on discovering the potential of online contextual advertising, I envisaged how we could change the rules of the game.  We could co-ordinate regional construction industry online publications for dozens of cities, and, with no need to either print or mail the publications, with appropriate advertising delivered in context.

With limited resources, and more gut-feel than brains, I set out to implement the vision.  The first part, registering domains for various cities, proved to be the easiest task.  The next part of the project, developing a network of websites which would combine generally relevant, yet locally useful, content, proved to be much more difficult.

In the end, after paying a few thousand dollars to offshore developers, I had a network of sites that didn?t have much functionality, visual appeal, or interest.  Worse, in part because my product really lacked quality, I couldn?t hope to attract meaningful advertising revenue and, without the revenue, I didn?t have the financial resources to continue with the initiative.

The Wikipedia order of magnitude chart

Orders of magnitude on Wikipedia

Fast forward six years, and much has changed, but much has remained the same.  While I dropped some of the city domains, I continue to renew others, though you won?t see anything on the sites, because I learned a painful lesson three years ago, when Google decided to stop serving ads and cancelled my ad-serving account.

I realized that I would not even think of restoring the sites until I have the resources to develop them.  Instead, I set out to improve our core publication sites, maintain my blog, and develop new online publications such as The Canadian Design and Construction Report.

With these projects succeeding quite well, a few weeks ago (and with the city site domains approaching their annual renewal point), I began thinking:  ?Is it time to resume the online initiative??  But I have one rather large problem to solve before moving forward . . .I project that the revenue streams for these online publications will be two orders of magnitude lower than the levels to which I?m accustomed to operate.

In other words, if we are successful in print with revenues of $10,000, I can expect, if I?m lucky, to make $100 a month from an online site.  Of course, if we have 100 city sites, the revenue would be $10,000 ? but how can I even hope to provide some degree of quality, original and relevant material, frequently updated, for this revenue level.

How do I come up with these numbers?  This blog is undeniably successful.  It takes me about 30 minutes to an hour a day to write, every day.  It attracts about 100 to 200 readers, and has solid search engine rankings.  But my direct advertising revenue, including paid links and Google contextual advertising, is about $150 a month.

Clearly, if I value my time at all, in itself the blog is earning me the grand sum of $10 an hour, hardly executive pay (I could do better working at a fast food restaurant.)  Of course, there are other reasons to work on the blog.  Relationships developed her have led to thousands of dollars in leads and business for our sales team, so my real income from this writing is quite a bit better.  But could I hope to replicate this quality over 50 or 100 distinctive domains?  Where could I find writers who would be willing to research topics, dig out stories, and write effectively every day, like clockwork?

I realize that some business problems defy solution.  Ideas might appeal emotionally and even seem to follow trends ? but if the numbers don?t add up, should we follow them?  Ironically, I should know what I?m doing; even Google staff thinks so, with my Top Contributor status on the Google help forums and Google?s decision to fly me to Mountain View in September for a summit.

In the end, however, the solution I sense will arise when I can resolve the challenge of the order of magnitude.  In the online space, everything on such a larger scale, that the numbers boggle the mind.  So maybe, ultimately, I will find a way to turn 1 in 100 into millions of dollars in revenue.  But that time may be some time in the future, indeed.

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