What Economics Taught me about Blogging
June 11th, 2017 | blogs–
My main job is an economics teacher. One of my more successful blogs is an Economics Blog. It’s probably more successful because it’s a niche I find easy to write about.
Having a training in Economics gives you a certain perspective, this is few ideas related to blogging.
Opportunity Cost means that when ever we do something there is a cost of losing out on an alternative that we could have done instead. In simple terms – The next best alternative foregone. The biggest challenge for a blogger is managing his limited time in the most effective way. If we have 2 hours per day, we have to make sure we don’t waste these hours. For example, we could spend 2 hours reading and commenting on other people’s blog. This has a certain benefit; however, the opportunity cost is that we haven’t written anything for our own blog. Generally, I feel it is more important to write for your own blog, rather than comment on others. If I do spend time reading RSS feeds, I limit the time because I’m aware of the opportunity cost. There are many things which will help your blog; however, you have to choose to do the MOST useful things first; only then can you do the less important tasks.see What to do with 10 hours for your blog
Economies of Scale.
My first attempts at blogging were hard work. I would spend alot of time learning about html, css and discovering what works. For all that effort you get little in the way of traffic, links and income. However, the more time you spend blogging, the more efficient you become. After several months of blogging, I can now use the skills I have learned for several blogs. Many blogs share the same template and similar traffic strategies. The point is that to succeed in blogging you have to make a really determined effort. If your blogging is half hearted, you will never really succeed. The more you blog the more successful you become. The really big blogs don’t have to spend anytime advertising their blog, readers do that for them automatically. If you feel your early efforts are not getting much return – persevere. Your efforts will begin to give an increasing return.
Supply and Demand.
Does the internet need another blog “How to make money online”?
If you want to make money from a blog, choose a topic where demand from advertisers is high, but supply is limited. For example, a blog about funny quotes, gets very little pay per click. – Why? advertisers don’t want to pay much and there is a huge supply of blogs about funny videos and quotes. However, if you blog on mortgages, supply is less and demand is higher. Of course, I should stress that you must have an interest / knowledge in the topics you choose, otherwise it is a waste of time. Also, if you are really motivated to blog about “funny quotes” you can make it successful, purely by making the site high traffic. However, it is always worth bearing in mind:
- is there demand for this niche?
- How much competition is there?
- Can I offer something unique?
Perfect Competition vs Monopoly
Blogging is a very competitive market. It is close to the model of perfect competition: anybody can enter, costs are low and information is freely available. A very competitive market means it is difficult to make much profit. To succeed you need to develop brand loyalty. It means your blog needs to develop brand differentiation. This is what will attract a loyal readership; the core of a successful blog. In a way you can then gain monopoly power; when you are firmly established in a niche, it becomes difficult for others to push you off high google rankings.
An economist is always concerned with efficiency. Basically this means getting the best return from limited resources (in this case the limited resource is time). Look to keep learning time saving devices, which increase productivity. Make sure you don’t waste time in surfing the internet. Have a clear strategy and focus. Look at these 13 tips for increasing productivity.
Profit Maximisation vs Increasing Market Share.
The standard model of economics assumes firms wish to maximise profits. A blogger can maximise his short run profits by optimising his site with many different ads. However, there is a better long term strategy: first aim to increase market share, focus on increasing your readership base. Don’t worry about short term income. Ads may put off readers in the short term. If you get a loyal readership, high traffic and high number of links, then start thinking about adding more ads.
Collusion is working with others to maximise profits. In the real world collusion is illegal (it involves firms agreeing to set higher prices) In the blogging world collusion is not the right word; it is really mutually beneficial cooperation. By helping other blogs (linking to them) you can easily help yourself.
Game Theory and The prisoners dilemna
Remember in the early days of the internet and reciprocol linking was all the rage? It was assumed linking was good, as long as the other person linked back. Thus, whether to link to others was dependent upon whether they would link back or not. This is a very simple model of game theory. The optimum is if the other person links to you but you don’t link back. The next best is reciprocal links. The worst is you linking to others and the other blog doesn’t link back.
However, this attitude to linking is wrong. If you are linking to the right sites (i.e. ones which are good and relevant) an external link is helpful even if you don’t get a link back. Thus there is only a positive effect of linking to others, you don’t have to worry about whether they link back.