Friday, July 11, 2008

20% of total revenue going to the top 1% of blogs

Top Blogs accounting for significant amount of Web Advertising?

A new study being published by the University of Texas and Chitika says that the top 50,000 blogs may have generated around $500 million in aggregate 2006 revenue.

I would say only around the top 20,000 blogs make good money.

How much is good money? Well, at least $1000 per month.

Micheal Arrington says:"An interesting conclusion is that blog revenue may defy the “80/20 rule”, with even more revenue going to top blogs than usual, with 20% of total revenue going to the top 1% of blogs.

as internet advertising is estimated to be $25 billion mark for 2006, it looks like blogs are accounting for around 2-3% of the entire amount spent on internet advertising. Web sites must be taking the remaining. In which case are blogging platforms successful ventures?

Estimation method:

Using Chitika revenue numbers from 2006 and assuming that bloggers will, on average,
diversify across. 3 revenue sources, and assuming that they will typically try out other sources that will generate similar revenue streams, it is safe to estimate that the total estimated revenue for their blog will be at least 3 times the revenue attained through Chitika.

· With the sample data set, (BlogID, Rank, 2006 Revenue) standard statistical predictive modeling techniques (in this case, the specific regression model used was a variant of the Pareto model) were used to estimate the advertising revenue earned by blogs across all ranks.

Vijay Mookerjee, Ph.D, and Milind Dawande, Ph.D
University of Texas, Dallas, TX.

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