RSS readership correlation with Blog Revenue

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Curt from Penny Jobs left an interesting comment on a recent post about increasing my passive income to $300 p/month. His comment related to my target of growing my blogging (passive) income to $50 p/month by year end and was:

Here is a calculation for blogging income. JD of the ‘Get Rich Slowly’ blog posted in Nov that he has $5k income with 35000 RSS readers. Therefore, each reader is worth, 5k/35000 = $0.14 per month. If you have 65 readers, your income should be about .14×65= $9.10/month. If your goals is $50/month, then you need 357 readers.

My response was “…I think RSS readers is not necessarily an accurate figure to measure reader worth (though I am not an SEO expert). In fact I think as I have limited in-post advertising most of my RSS readers are not really big revenue generators. Most of my ad revenue comes from site visitors clicking on AdSense and affiliate marketing programs… ”.

Gather Little by Little (GLBL), a prominent personal finance blogger, happened to have a recent post on passing the 1500 RSS reader mark (congratulations) and I posed this question to him as a comment against the post. His response to me was:

Revenue is purely based on your traffic, not on RSS. RSS readers click on affiliate links, Search Engine visitors click on AdSense and ads, and text links are based on your page rank. I think it’s really hard to base income on RSS, a much better perspective is on traffic (i.e. page views per month).If I took just my ad revenue (minus affiliates and text links) my RSS would be .59 per reader or about $884/month. But I run 2 CPM ads where I get paid by impression. JD might be closer if you look at just AdSense, but .14c seems real low at least compared to what I am seeing. As for your target income, keep it up for a few months and you’ll far surpass $50.00/month. Andy, I don’t advertise my revenue, but for May I’ll be right at $XXXX (affiliates, text, links, and ads). [Editor – For confidentiality I am not putting it in the exact amount, but it is over $1000]

I think I am more in line with GLBL’s line of reasoning, though Curt’s RSS readers to blog correlation does have merit (my RSS readers to revenue ratio is about 0.15c) and I will be tracking it for my blog and publish an update over the next few months. What are your thoughts and if you manage a blog, have you seen this correlation/ratio to hold true?

Now to some of the finance related carnivals and festivals I participated in during the week. As usual kudos to all the host for taking the time to review and list all the great money related articles submitted from around the blogosphere.

Canadian Dream: Free at 45 hosted Carnival of Personal Finance #154 which included my post on Why Online High Yield Saving Accounts are Poor Investments

Funny About Money hosted And the Beat Goes On: 127th Festival of Frugality in which my article on Tipping Philosophies was published.

PiggyBankBlues hosted the 61st Carnival of Money Stories that featured my article on Embrace Fear for Financial Freedom.

You may have noticed that even though this is a personal finance focused blog, I do occasionally like to talk about the blogging part of things based on my experiences to date. This covers actually managing/running this blog, other good blogs I find along the way and the various festivals and carnivals I participate in. If you like to see more on my blogging experiences, check out the “Blogging” category. Your feedback is always appreciated.

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