Revealed: My online community revenue breakdown

by Martin Reed on 24 January 2008 in Articles

Making money from a website

I listen to the readers of this blog – an online community will always struggle to succeed if the community developer fails to listen to its members. I consider a blog just as much of an online community as a forum or a social network – all are based around interaction and dialogue sharing.

Readers of Community Spark often ask me to associate the theory I am writing about with examples. Recently, I have been trying hard to ensure that all of my articles include examples wherever possible. Most notably, I have started to document the process of building a brand new online community from scratch.

Today I want to remind you all of the importance of diversifying your revenue streams. To do this, I will be sharing the revenue breakdown of Just Chat – my main online community – with you as an example.

Why you need to ensure your income streams are diversified

You should always be planning for the future. You should always be planning for the expected, and you should always be planning for the unexpected. Sure, you may be enjoying fantastic success right now, but what would happen if something changed overnight?

Let’s say you rely on Google AdSense for the majority of your revenue – what would happen if your earnings suddenly plummeted, or you were removed from the program? Would you be able to continue if your main source of funds disappeared overnight? The more diversified your income is, the more secure it is – make sure you always have more than one source of revenue, and that each revenue source doesn’t account for more than a third of your overall income.

My revenue breakdown for 2007

Online community revenue breakdown

As you can see from the pie chart above, Just Chat has a number of revenue streams, and the three largest do not account for much more than a third of overall revenue. This ensures that should one of these sources of income disappear, the site will still be financially viable whilst I implement a replacement for the lost income.

Breakdown information

I’ll briefly explain the breakdown shown above:

EasyDate – This is a private affiliate program; online communities are often a good match for dating sites. If you are running an online community and aren’t advertising dating sites, you may be missing out on some great revenue. EasyDate offer three websites for you to partner with – from general dating, to casual dating to adult dating. They offer the following standard payouts:

£2.50 for every female lead
£1.50 for every male lead
50% sales commission

If you send them decent traffic, EasyDate are open to discussing higher commission structures. I would highly recommend giving them a try – if you do, let me know how you get on!

Google AdSense – Not much to say here; the program either works for you, or it doesn’t. They key is to try them out and experiment with your ad placements and appearance – the smallest changes can yield great revenue increases.

Advertising.com – These are the guys that serve the 728×90 banner ads on Just Chat. They utilise proprietary, automated-optimisation technology along with behavioural targeting to ensure they deliver the maximum revenue possible for publishers. I have had a relationship with Advertising.com for more than four years and can highly recommend them.

Others – These include the following:

Reserved Chat Names – I offer Just Chat users the option to password protect their choice of chat name. As Just Chat allows users to chat without registering, there is no password protection of chat names by default. As you can see, very little revenue is generated from offering this facility – I simply offer the option so regular users can protect their names should they wish.

43Plc – These guys serve the Just Chat quizzes. They don’t earn me a great deal of revenue in comparison to my larger revenue sources, but my visitors love the quizzes so I see it more as a way of adding value to my site rather than solely making money.

Just Go Media – I am currently generating revenue with Yahoo! search through Just Go Media. The system works in a similar way to AdSense, except you get to choose specific the keywords that you think will be the most effective on your site.

TradeDoubler – A huge affiliate marketing network that offers a huge number of potential merchants for you to promote. The statistics offered by this network are fantastic, and really help you to optimise your campaigns. I have since moved away from TradeDoubler to focus on my private affiliate scheme with EasyDate – they are however, part of my contingency plan to fall back on should I need them!

Paid on Results – Another affiliate marketing network, Paid on Results doesn’t offer the same number of merchants as TradeDoubler but one area where they excel is in their customer support – they focus on building a relationship with you as a publisher, and will always be willing to work with you to achieve the best results possible. They are definitely worth giving a try. Again, I have moved away from Paid on Results to focus on my private affiliate scheme with EasyDate – they are however, also part of my contingency plan to fall back on should I need them!

Conclusion

Whew! That was quite the blog post, eh? I hope you found it interesting to read about Just Chat’s revenue sources and were perhaps surprised to see the actual number of revenue streams. I cannot stress enough the importance of diversity in this area – if you want secure revenue streams, you need diverse revenue streams. Make this one of your goals for 2008.

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{ 18 comments }

Sue @ TameBay January 24, 2008 at 12:45 pm

I see it more as a way of adding value to my site rather than solely making money.

This is key for me when thinking about advertising on the internet. Advertising is content just like any other part of your site, and should be targetted and useful to your visitors. It should *add* to your site, not detract, annoy or just be ignored by your users.

Lee January 24, 2008 at 4:27 pm

A good friend has being having issues with Justgomedia and has been fighting over payouts from before Christmas. It seems that a number of blog / forum posts seem to show the same situation continouslly resurfacing with a “banned” email just before people get to the payment thresh hold

Commodity January 25, 2008 at 3:04 am

Agree on diversification. The days are gone when you can survive on just adsense.

Online Furniture Store January 25, 2008 at 9:38 am

It is good to know that adsense does not rule the roost anymore and that there are so many other options for monetising now. Thanks for a comprehensive and informative post.

Melissa Odom January 25, 2008 at 3:52 pm

Why are people willing to pay for personal websites but not social networking sites? Social networking sites are a form of personals plus some, aren’t they? Any thoughts on subscriptions?

Thanks for the post! I have been searching for multiple ways to create revenue – I am not looking to get rich, just enough to quit my day job so I focus on the site full-time in addition to paying for the site.

TigerTom January 28, 2008 at 11:33 am

Standard, but good advice. Adsense is a nice shiny cosy trap. You need to have other irons in the fire, if you get booted. You can also end up making sites just for it; they might be hard to monetise outside Adsense.

Thanks for the links to the other aff. networks; useful.

Martin Reed - Blog Author January 28, 2008 at 11:49 am

Sue – I think a lot of people fail to consider that advertising can actually add value to your site, as long as it is targeted and relevant to your visitors.

Lee – That’s unfortunate. I can’t comment on that case as I don’t know enough about it. I will say though, that I have had no payment problems (so far) with JustGoMedia.

Commodity – I agree. Although it is possible to survive solely using AdSense (and many people live quite comfortably from AdSense revenue alone), you need to be prepared for what would happen if that revenue stream suddenly came to an end.

Reena – There are an uncountable number of ways to monetise your site; I could search every day for a year and find a new potential revenue stream every time.

Melissa – I have thought about introducing paid subscriptions for the epals section of my site, however I am unsure as to how it would affect the overall membership rate. When you think about the big players (MySpace, Facebook etc), they all offer their services free of charge.

I think the best option would be to keep offering free accounts but introduce a ‘premium’ subscription based membership option, offering more features and allowances.

TigerTom – I like your comment about AdSense being a nice, shiny, cosy trap! I am glad you enjoyed the article.

Nicole Price January 31, 2008 at 5:23 am

This was a very good post. It is important to know the best, tried and tested means of monetizing a site. And I guess the idea of diversifying your sources of income and investing your earnings cannot be stressed upon enough.

Eva White February 1, 2008 at 4:40 am

I agree totally that income diversification is very important. It is always better for the future.

Martin Reed - Blog Author February 1, 2008 at 11:45 pm

Nicole – I am glad you found the article interesting. It really is important to have a range of revenue streams. Undiversified revenue is unsecure revenue.

Eva – I’m glad you agree! How many revenue streams do you have on your site?

Online Trading February 2, 2008 at 12:23 am

Diversified revenue streams are important to the long term health of any business, be it online or off. One should never put all of their eggs in one basket.

Weight Loss Wand February 3, 2008 at 5:29 pm

This is good sense the adsense is the good alternative as far as monetary term is concern,as far as future is concern diversification in the income is quite necessary

John Deere Lawn Tractors February 5, 2008 at 6:42 pm

Hi Martin, thanks for posting this. I am new to the game and am 100% reliant on Adsense right now. Some of the affiliates you mentioned wouldn’t fit into my niches right now, but I will keep them in mind, as I’m sure I could fit them in as my blog topics expand. Thanks again, cheers!

Martin Reed - Blog Author February 5, 2008 at 7:23 pm

Online Trading – I agree; it’s easy to forget that online revenue generation should carry the same principles as offline money making.

Weight – There is nothing wrong with AdSense; I would simply warn people against relying on any single source of revenue.

John – I am glad you found the article useful!

Roth IRA Forums March 8, 2008 at 12:30 pm

Hmm..I rely too much on one source of income. Thanks for this post.

Right now, Affiliate Marketing works well, but I’m experimenting with direct advertising as well as CPM networks.

Hopefully I can diversify by the end of this month.

Portable Dog Crates March 14, 2008 at 2:52 pm

Diversifying your income streams is very important in most business models and not just on the internet. Good post though.

Martin Reed - Blog Author March 15, 2008 at 6:55 pm

Roth – I think you should make diversifying your income stream a priority. You never want to rely on one source of income – you are only setting yourself up for a fall. Good luck, and let me know how you get on!

Portable – You are exactly right. Unfortunately many people forget that offline business principles apply online, too!

Smiley August 8, 2008 at 2:42 pm

I’ve been trying to sign up to Advertising.com but lost my temper after 30 minutes of trying to find the bloody signup button.. can’t find one anywhere! It’s like they don’t want publishers.