Update: After you’re done with this please check out Jason’s excellent part deux
I haven’t allowed myself the luxury of sitting down to write a decent post in me for some time, so this feels good.
Especially because it’s one of those ‘James comes out on top at the end’ posts, which is always nice to share – and it’s also a topic very close to my heart- making WordPress MU work in terms of revenue, and specifically, where Edublogs is concerned (although I’ll also make fairly frequent reference to WordPress.com too).
Now, to start off I should note that Edublogs (a WordPress MU site for education) was started off not as a business but to meet the practical purposes of providing blogs to academics via a simpler approach than individual WordPress installs. It also wasn’t started off buy a business-person, it was started off by a lecturer in education design (me) without even the merest whiff of funding and on a $7 p/month hosting plan.
Now, almost 4 years later, it’s one of the largest blog hosting sites on the web, employs multiple staff, runs on hosting that costs upwards of AU$10k per month and, most importantly, is a sustainable (and growing) business.
How did we do this?
Well, by mucho trial and error, I can tell you – there’s almost not a single revenue model we haven’t tried – and some have worked, some have worked (a bit) and some have been abject failures – here they are, in reverse order of success – with our experience tied in to each.
I have a personal objection to donations, and I think contemplated it once and quickly put it away – I mean, why should anyone donate to you as opposed to , say, Oxfam – and if they did, what would they be getting out of it (as opposed to, say, sponsoring a child)? It sucks, you’ll hardly get any, and it’s basically begging.
Works for Wikipedia because they are one of the largest websites in the world and provide something of intrinsic value that a lot of people use all the time – won’t work for you. Sorry.
Our first semi-successful model, we wanted to cover our burgeoning hosting costs so we reached out and a small independent ed tech company in the UK gave us $3000 for a years worth of advertising and to integrate with their site for users… I reckon they got a good deal :)
The key to this one is that it isn’t advertising – it’s finding a partner who’ll enjoy a mutually beneficial relationship with you, and as such is a great way to build your site and exposure, but perhaps not the greatest way to try and make a lot of money unless you’re starting from a position of some serious strength (and how many of us start like that eh?)
Another one of the semi-successful models. But, as an online editor at theage.com.au I found out the secret to advertising – are you ready?
… drum roll …
Be a big, established, successful media company – or, at the very least, be a magazine that’s being started by one or an experience big media exec with a few mil backing. Or be Darren Rowse :) Or, really really clever while at the same time being wordpress.com (read on for that bit).
Other than that advertising for the rest of us is at best semi-rewarding and at worst hardly even coffee money.
But that’s not to say that there aren’t great ways of doing it.
For example, we started showing ads using the brilliant adapted Who Sees Ads for WPMU plugin – which essentially allows you to place ads across themes and then determine, with site-wide rules, how they are displayed.
This is how WordPress.com show ads, and it’s utterly brilliant, with only one drawback. You need to be absolutely huge for it to work, for example, Edublogs does just over a million uniques a month and that *simply isn’t enough* – by my calculations you’d need at least 3-5 million before you started covering your hosting costs, 10 million before you start drawing a nice wage and 20 to be a viable company – and also have some sway with your Adsense eCPM and custom ad units (using this method alone). Luckily for wp.com they have 266 million and it’s far from their sole revenue source… nice work guys :)
And, while we no longer use this approach (I’ll get on to how we much more effectively use advertising at the end), it’s also a great way to display all sorts of other things across your network – but that’s by the by, let’s keep on thinking about the MONEY!
Selling Something Else
Yep, it’s quite simple, you offer a great, free, maybe even advertising free, site in the hope to shift some other product… for example, pets goods (for pet blogs).
And this can really really work! For Edublogs we’ve been selling for the last 2 years Edublogs Campus – basically a hosted standalone version of Edublogs for individual schools and it’s done really well. Had we been selling school IT resources, textbooks or something else – I think that might have worked well too.
Sure, you have to take into account that you are going to be selling to a particular crowd – but you can also turn them into affiliate sellers for you, and use their technical skills to your advantage (they are most likely gonna be pretty techie broadcasters) – in fact you can even get them to send out email invites (via imported web mail address books – anyone say ‘Twitter’…) to sell whatever it is that you are offering.
So this one get a thumbs up from me.
We’re almost there, because this can be an extremely successful revenue stream in its own right.
However, it’s got to be used wisely, and the most important thing to remember is that people won’t pay for stuff they don’t want or need – so, don’t go offering them the icing when you could be offering them the cake (if that makes any sense).
Let’s take wordpress.com for example – now they were really keen on early adopters and so the CSS editing upgrade made perfect sense early on (I have no idea how successful these were by the way), but they also have some excellent and very clever tricks up their sleeves – for example – you may have a gazillion GB already as upload space but you can’t upload anything beyond a large picture to it unless you purchase the extra space upgrade… clever, being able to upload podcasts, videos and alike is definitely the cake.
And now let’s take Edublogs, we offered a whole stack of cool extra features, twitter integration, more plugins, extra storage, respect, cool badges and more… we simply set it up using our simple custom Upgrades (with PayPal integration) plugin…. it worked brilliantly… and it so failed it wasn’t funny.
You see we already allowed people to upload what they wanted. And already gave them heaps of cool plugins. And they could do all sorts of cool stuff regardless. Hardly anyone signed up, and those that did – I suspect – did mostly out of the kindness of their hearts.
But, all was not lost, because this whole cake thing occurred to me and I got myself thinking about a great game I used to play back in the day called Hattrick…
Now, Hattrick is a football management game, and its free, but you can sign up to be a Supporter and OMG it’s cakelicious (ok, will stop the cake stuff now).
You get to see the faces of your players, extra tactical tools, a star next to your name (means a big deal in a site which is also a social networking setup as much as anything else) and all sorts of other great stuff. The game itself is completely free to play, but I understand that a goodly % of users sign up to be a supporter after a bit (or gift it to each other) – and, as there are almost a million players, and being a Supporter isn’t that cheap (something like $50 annually), they do pretty well!!!
So, moving onto WPMU, let’s forget the ‘upgrades’ bit of things - let’s make it much simpler; free users get x / Supporters (or whatever you want to call it) get y.
And lets say x = ads on their site / no access to plugins / no acccess to other extra features / reduced storage space etc.
And lets say y = no ads / masses of plugins / other great features / 5GB space / nice badge etc. etc.
Well, that’s what we’ve done. And it works. A lot.
And even better – you can do it too, we’ve released the Supporter plugin over at WPMU DEV Premium (so you get priority support / upgrades and general goodness as well).
Put simply, you can use this plugin to create your own Typepad, or Squarespace or a premium blogging platform that allows users to do (and receive) so much more than they would for a free blog – or from a free blogging site like blogger or wp.com.
Hook it into Supporter only personal support, add extra features to your site that are supporter only, set them up with free classifieds, generally give them some serious loving… either way, your business model just started looking a great deal healthier!
Or, go one step beyond what we do and just restrict absolutely critical ingredients, like ‘Write Post’ to Supporter only – that way you can give new users 14 days free, and then shut them down until they pay (just like Typepad). The best thing is they get to log in and see the entire site and backend, but not use it until they’ve paid.
Did I mention we’ve included a special plugin with the supporter pack that does just that for you :)
And did I mention it’s all based on PayPal subscriptions not single payments – unless you want it to be… now I don’t need to explain why that’s better do I?
And that’s where we’re at now, and I’m sure things’ll change again in the future, but I gotta say I’m pretty happy with the present. And, at the present, revenues are is where it is at.
Have I messed any revenue approaches you have tried? Do you completely agree or disagree with any of the above? Let me know in the comments :)
[BTW this post has (much to my delight :) also been translated into Spanish!]