How To Make Your Blog Boom Regardless Of The Economy

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This is a guest post by Shane Lashley, who blogs at www.InnovativeEconomy.com. If you have any questions for Shane after reading this article (I know I did!), please leave comments addressed to him.

The same economic meltdown that has wiped out stock portfolios is already opening opportunities for savvy bloggers, both entrepreneurial and corporate, to generate new – and more – revenue. This is not an opportunity to exploit those hardest hit. Rather, it’s an opportunity for bloggers to become a part of the economic recovery, and to help others and themselves at the same time.

At the heart of the opportunity are the rights to innovations owned by individuals and companies alike. These rights are referred to as “IPR” (Intellectual Property Rights). Some familiar with Internet marketing may have been introduced to IPR through Private Label Rights or Resale Rights for content. But the universe of IPR is far more comprehensive and it is rapidly becoming very friendly to bloggers.

Intellectual Property (IP) consists of patents, copyrights, trademarks and trade secrets. IPR refers to the various rights attached to each form of IP, rights that can be transferred, shared, quantified and monetized. IPR exists across all industries in all free-market economies, and is the single largest source of value in many U.S. companies. Many other countries are experiencing strong growth in their development of IP and their reliance on IPR.

Bloggers are now in a great position to secure IPR that will generate revenue streams through tough economic times and continue to perform during the recovery. But in order to extract the value of IPR, there must be a market for the product it represents. That’s where blogs begin to add their value.

Traffic Is Value

Blogs with existing traffic or the ability to grow traffic are the new gold in a downward economy. Good blogs are focused on a single topic and tend to attract a definable psychographic or demographic. Though far from being a cure-all solution, traffic indicates the presence of an audience, who is also the target market of some company that just lost its bank financing or ability to raise private equity, and doesn’t know when or if either will return before the company runs out of time.

Many companies and individual innovators are losing the ability or the appetite to roll out products across a big market. They just don’t have the cash or stomach for the risk involved. They need to take smaller steps and attract paying customers along the way. They also want to find something that already works, even on a smaller scale.

The ability of a blog to connect its audience with meaningful innovations is a game-changing event for the blogger looking to make money from their blog. The blogger should not abandon its purpose, independence, or writing voice that connects with the audience. These are important pieces of why the blog is now a valuable resource for products and companies with products.

As an IP professional, I have closely examined the changing valuation power of bloggers. My conclusion: conventional forms of blog revenue can be dwarfed by IPR arrangements.

For example, two blogs of roughly equal readership and attention may differ by more than 50 times in their valuations due to the impact IPR can create.

How can this be? A number of factors can cause this huge valuation difference, but here are two foundational principles.

First, remember this rule: “Good IPR extends time. Time magnifies value.” Therefore, it is not necessary to generate seven figures of revenue in order to achieve a seven figure valuation. You will sell the IPR based on its valuation, so this rule is critical to your success.

IPR Examples

Let’s look at an example. A patent can provide as much as twenty years of legal protection. You acquire certain IPR after five years of patent life have already passed, perhaps with no money down, since it’s been sitting on the shelf of its former owner. Depending on the industry and nature of this innovation, you may only need to generate high five figures or low six figures in actual revenue in order to achieve a seven figure valuation for that IPR. Why? You own the rights to the remaining patent life (up to fifteen years).

Now let’s break our example down further, and compare physical and digital products. Physical products can retain their value longer than many digital content products, especially eBooks. You write a $27 eBook and sell 2,000 copies over the course of a year. At year end, the content of your eBook may be nearing obsolescence. Now you need to update your eBook or create a new one and start the product launch all over again.

You have IPR in the form of copyright, and copyrights do extend time. But in this case, the shelf-life (market life) is much shorter than its copyright life. You may find your eBook has already peaked in value. If it hasn’t yet, your selling price is likely a multiple of 1.0 to 1.5 last year’s sales, if you can get that much. At $27 multiplied by 2,000 that’s $54,000, which multiplied by 1.5 equals $81,000, but nearing obsolescence can drive your value down to less than $10,000.

Alternatively, you sell a patented product for $27 through your blog and you sell 2,000 units over the course of a year. Rather than approaching obsolescence, you are just getting started.

Again, five years of patent life had passed before you acquired it, and you’ve spent one year selling the product, so you have fourteen years of patent life remaining. Though most products sales rise after the first year, let’s say that your conservative forecasted plan is 2,000 units per year over the remaining fourteen years. $27 multiplied by 2,000 equals $54,000, which multiplied by 14 equals $756,000. But your value does not end there.

[NOTE: Valuation math is actually not this simplistic - it can be quite complex. But it is built on the principles outlined here and this example is fine for the purpose of teaching the basic concept of relative value.]

Let’s look at the second rule: “Online success contributes to off-line value.” The patent is not only for your direct sales or online presence. It includes off-line rights too. If you have international protection it could also apply to multiple countries. Your $756,000 is perhaps just part of your value. It is not unrealistic or uncommon for a patented product like the one in this example to achieve a value of $4 million or more, once all factors are taken into account. Compare the digital product’s best case value of $81,000 to the patented product’s middle-of-the-road value of $4 million. Which one would you rather own?

Does that mean you should not use Private Label Rights or write eBooks for your portfolio? No, it does not mean that at all! Think of your portfolio as a team. Each team member has a unique role that contributes to the overall success of the portfolio especially if they help you discuss your other products. Private Label Rights and eBooks can be valuable members of your team.

Now you may be asking, who would buy your IPR for $4 million? Companies and individuals buy investments that work. Even with just modest sales like those presented here, you are making it easier for a company to justify purchasing your IPR. Why? You are proving that the product works and the market wants it.

Most companies would rather pay a seven figure price tag to acquire an opportunity with a promising track record that they can scale up to a higher level of sales, than risk wasting time and money experimenting. A price tag of $4 million can be a great deal for that company and a homerun for you.

What Does This Mean For Bloggers?

I have only dealt with a patent example here. A strong portfolio includes all forms of IPR, and the portfolio impact drives up the value of your blog.

For our last example, let’s assume you build a portfolio of just five IPR-based products that you monetize through your blog.

As a blog owner, you have many options. You can decide to retain ownership of all the IPR and the blog and just put your life on cruise control while you collect the money. You may decide you want to sell off one of the IPR assets and make a major purchase, using your IPR to do it debt-free. Finally, you may decide to sell everything – the blog, the IPR and all that goes with it. The point is you get to decide what works for you.

Innovation will play a powerful role in the recovery of our global economy. Bloggers everywhere can now achieve greater financial results than many people thought possible. The skills and resources required to build your own IPR portfolio are within the grasp of most anyone. It is a great time to be a blogger!

Shane Lashley

For more on this subject, see The Coming Economic Boom For Bloggers

About Yaro Starak

Yaro Starak is the author of the Blog Profits Blueprint, a report you can download instantly to learn how to make $10,000 a month, from only blogging 2 hours per day. You can find Yaro on Facebook, Twitter and .

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34 Comments

  • Jon

    Good article… more people should learn how to monetize their blog apart from just sticking Adsense to it… the focus has to be on building the traffic first though as that is the leading indicator of not just popularity (influence) but how much financial opportunity your blog has.

    I do wonder what the shelflife of all this blogging really is though at the end of the day as we are just one search engine update from either boom or bust traffic wise.

    Jon
    http://2xStocks.com
    Doubling my money, one stock at a time!

  • So what Shane is essentially saying in order to make ‘real’ money, one has to develop products to sell through their web sites?

    If this is the case- then I totally agree! With the current recession affecting so many people, people are going to be looking for information to make their life easier and better. I’m not saying bloggers should prey on these people but if you are a blogger with expertise in a certain area (like finances) which is important to a wide range of people, then you stand to make some money. To do this, all you would need to do is put together some information manuals which you sell at an affordable price through your site.

    Wesley
    The Geek Entrepreneur

  • I think blogging will be growing significantly in the coming years.

    About the economy. Any company that does not provide value will die off anyway. Only those that give more in value than they take in cash will survive.

  • This is a new idea for me and I’m struggling for a moment to make it practical. What are some examples of IPR based products? I think this is simpler than I’m making it out to be, but I haven’t quite grasped yet.

    Awaiting some light,

    Jonathan

    • Jonathan – just to be clear, when I say, “IPR-based products,” I’m referring to something covered by a patent-pending, an issued patent, a copyright, a trademark or a trade secret. These are the four main types of intellectual property.

      The idea is that you have some contractual right to the IP in whatever form it exists. Your contractual right may come from being the inventor, or it could come from a variety of other relationships you might have with the inventor or company who holds the full list of rights IPR can convey to an owner.

  • The problem is that more and more people aren’t respecting Intellectual Property Rights. And the holder of the rights couldn’t spend alot money to stop those illegal manufacturers, because of financial issues.

    • Charles,

      You raise a good point. Fortunately, the options for the IPR holder to enforce their rights without becoming overly distracted or spending out of pocket cash have greatly improved in recent years. For example, many law firms will now go after IPR infringers on your behalf without charging you any money up front. They share in what they recover.

      Another example is the Customs agency, such as US Customs. They can stop shipments from coming into the US for you by seizing them before they enter the country.

      Turning these problems over to a third-party is a great way for a blogger/IPR owner to stay focused and keep the stress down while building superior value.

  • I like the idea of making a lot of money, but the whole thing sounded too abstract for me. Shane, do you have any case study to present? Yaro, I think it’s the case of a podcast interview or a second guest post here ;-)

    And, by the way, I went to YourProductMade.com and the waiting list form presented a problem. I’m using Firefox 3.05 and Windows Vista.

    Cheers, D.

    • Diogo,

      Sorry about the site access difficulty. Ironically, our dedicated server experienced some trouble on the same day as Yaro published this post. Its like jamming with the Rolling Stones and realizing your amp was unplugged. Fortunately, it wasn’t down too long and is back up now. You should have no trouble now accessing the course, etc. now.

  • It is important that you develop your blog in a way that it will survive for the future. If you are currently running a blog and you are running out of topics to talk about within your niche, you need to simply sit down and refocus the structure of your blog.

  • I’m all over the idea that blogging will balloon in this bad economy. This is an interesting angle you’ve got here. Something worth looking into, no doubt. Eric.

  • Great article Shane…I especially like your “team” analogy. Having a portfolio of products that create revenue and cross promote each other is a great idea.

    As far as IPR products are concerned, where would you suggest looking for products that would do well for a given audience? Is there a directory of some sort or is it largely a matter of getting lucky and stumbling into something?

  • Monetizing out blog never occurred to us before reading this. We are a traditional online e-tailer but have a fun blog. I think the trick really is to drive considerable traffic to the blog and build a loyal base of “visitors” or a community around the blog so the folks that visit are inclined to trust the advice of the blogger and purchase some of the recomended items. Trick is getting traffic and building trust !

    This is a well done blog.

  • Interesting, but I don’t understand how to apply this to a particular blogger’s site. I think I’ll wait for the other answers in this comment section. :O

  • Quite an interesting article…I’ve never seen anything written that discusses IPR in this way. It’s nice to see more of a business-driven methodology applied to us bloggers out there in the world.

  • I think blog marketing is far more important then monetizing, if you can market your blog well enough the money will come on its own.
    Cheers, amr

  • I appreciate all the comments and enthusiasm for this topic. Here are a few responses to questions raised so far:

    RE: Charles – Charles,

    You raise a good point. Fortunately, the options for the IPR holder to enforce their rights without becoming overly distracted or spending out of pocket cash have greatly improved in recent years. For example, many law firms will now go after IPR infringers on your behalf without charging you any money up front. They share in what they recover.

    Another example is the Customs agency, such as US Customs. They can stop shipments from coming into the US for you by seizing them before they enter the country.

    Turning these problems over to a third-party is a great way for a blogger/IPR owner to stay focused and keep the stress down while building superior value.

    RE: Mike – Great question about where to find good IPR. This is what has been missing, in my view. I developed a methodology to help people identify the IPR that best fits their goals, interests, resources, etc. That is part of what I teach in, “The Coming Economic Boom For Bloggers and “Uncover Hidden Capital Toolkit.” Occasionally, I run across a database someone has put together but I’ve never found them to be powerful enough to accommodate a wide range of interests and needs. So I think it is better to go with a strategy for finding what you want and accessing the information that way. It’s all out there, sometimes just down the street from where you work or live. I find the skill of knowing what to look for and how to find it solves the problem of figuring out where to find it.

    RE: Jonathan – Struggling to make it practical. When people first see the concept it can create a rush of questions. But when you get into the specific steps you would take and the questions you would ask yourself to find the IPR that works for you, it really becomes quite tangible and simple to understand. From a 50,000 foot altitude perspective, think of it in these broad terms. (1) You have a blog that focuses on a topic for which you have a passion and your readers share that passion. (2) That topic is likely associated with products (digital or physical) that people buy. (3) Now imagine you are able to own the rights to just some of the products that audience buys. (4) You monetize your blog by providing those products. You monetize the products through your blog and other sources too, if you wish. The rights have high value.

    Quick note: We are in the processing of applying Yaro’s “X” Factor discussed in his “Become A Blogger” course to every module in our program. We should have it all done this week. While we are in the transition, I am providing some additional practical information that will no doubt help bloggers move into the world of making money through IPR and their blog. All the details are now available at yourproductmade.com. FYI: The “X” Factor Yaro teaches has all the benefits he discusses, but I have realized that from an instructor’s point of view it allows me to cover more material too and I didn’t see that at first.

    • Thanks for the follow up Shane. I get your point…its better to learn the methodology to find them on your own. Probably better this way as you might just uncover something no one else has.

  • This is definitely a different approach to looking at your sites IP, that is for sure. I tend to look at it in a different light anyway, as we are a media company. So I have to look at our IP issues all the time.

    However, this is definitely another way of looking at one’s IP. Interesting twist.

  • Thanks for the great article. Blogging is definitely a growing phenomenon that isn’t going to be held up by the economic downturn.

  • Shane, thanks for these thoughtfully laid out facts and insights! Initially I started a blog on brain based business (my own innovative pairing of neuro-discoveries and leadership tactics) with KMM big network – that went out of business after I was there 3 yrs. Grateful for their invitation, and for blogging experience, I then started my current blog which I own. It’s tough work to start over again, when you’d won many awards and had great traffic daily. But the deep satisfaction of blogging again – this time at my own site, was well worth the hard work to build readership.

    In fact, the blog’s a great place to develop and work with ideas, even for people like me who do not place ads or monetize the site currently. I am a published author and thought I may write more about my published works there eventually. Yet, the value of a great community of diverse thinkers – with high ethical standards is an amazing payback so far.

    I’ll keep your dynamic facts though, since my own regular work at the MITA Brain Based Center is trademarked and is also unique. Simply put, I was inspired by your spirited suggestions for all that a blog could be, and what you say rings true. Great incentive to keep building – even after starting again from scratch – as I too have found blogging to be a golden opportunity in many of the ways you suggested here. All to say thanks for the keeper, Shane!

  • Hey Shane,

    I believe that your article will help to convince others that blogging is not just a fad and it really does work! :)

    Cheers
    Vincent
    Personal Development Blogger

  • > Blogs with existing traffic or the ability to grow traffic are the new gold in a downward economy.
    That’s a beautiful line and beautiful metaphor.

  • James

    This seems like important and interesting subject matter, which makes it a pity that this post was written so horrendously. This dude never even provides any examples of what exactly bloggers are meant to be taking out patents on – and without taking that first step of illustrating what these “IPR-based products” actually might be, the rest of the post just becomes a mere shopping list of jargon, gratuitous buzzwords and speculative math. An overly long one at that.

  • Boy i just can’t wait to start earning some money so I can put some of those elance web contractors to work with my ideas!

  • This blog post was rather inspirational for me. The economy has actually made me want to try even harder to be successful online. The good thing the economy has for people in the internet marketing niche is that people are looking to make money more then ever before so we should have more people looking to learn how.

    On that note, good luck to everyone and I wish everyone good luck with in their marketing ventures.

  • As far as I can predict I’m not intending to sell my blog. But it’s great to know there’s an option to be able to sell your blog in case something bigger come out and you can’t manage your blog anymore.

  • I am sure with a short period of time blogging will be a reliable source for making money. But it is of great importance to develop your blog that will be valuable not for now only but for future as well.

  • I think blogging business is a good recession-proved method. But it take few months to see result and strong passion to keep going.

  • This seems to have become one of the most popular article topics over the last few months, little surprise really.. Great angle on the topic..
    Thanks

  • good article. Thanks. I’ve been writing to several blogs over the years. The biggest piece of advice I’d offer is consistency. You guys have that one covered.

    thanks,

  •  Good post, I liked your idea of sharing your views going out of your blog on to someone else’s blog.

  • Great Article. Learned a lot of great things about IPR that I wouldn’t have known otherwise. It is also a nice sign that even in a sour economy, blogging can still work.

  • Nice Post – being a patent attorney I am pleased to see this kind of commercially focused content around the value of intellectual property rights (IPRs). It also shows the value that USA entrepreneurs and companies place around IPRs – something which at times is lacking in Australia. Although, I am pleased to say that I have recently come across a seven figure patent deal right here in Australia.

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