2005 Traffic & Adsense Revenue Growth

Last night I presented a 90–minute workshop to a group of about 60 speakers (some Toastmasters and some members of the National Speakers Association) about how to take advantage of internet and blogging technology. I had a great time showing people what they could achieve by putting their content online, and I received a lot of positive feedback afterwards.

As part of my PowerPoint presentation, I included a couple graphs. The first one showed how my web traffic has increased over the past 12 months. In February 2005 this site received about 86,000 visitors, and this month I’m projecting about 715,000. That projection should be fairly accurate, since we’re already halfway through the month, and my traffic tends to be largely predictable over the course of each month now. Even when I get a traffic spike on a certain day, it’s generally not a big percentage of overall monthly traffic.

Here’s the graph showing my traffic growth for the past 12 months from Feb 2005 to Jan 2006. The numbers on the left represent number of visitors.

2005 Web Traffic Growth

The only month where traffic actually went down was July 2005, but that was mainly because June saw such a big spike. Other than that though, traffic has increased every month since the site launched in October 2004.

Traffic has been growing at an average rate of about 21% per month. If that rate continues for another 12 months, it will mean a 10x increase in traffic a year from now. I’ve no idea what kind of increase 2006 will actually bring though. Time will tell.

Here’s a graph showing my Adsense revenue growth from Feb 2005 to Jan 2006. The January figure is again a projection, but it should be fairly accurate. In Feb 2005 I made $53 from Adsense — it was the first month I started using Adsense. This month I’m projecting about $4700 from Adsense.

2005 Adsense Revenue Growth

Adsense revenue has gone up every single month, increasing at an average rate of about 50% per month. This has held stable the past couple months as well, so it isn’t tapering off yet.

That’s pretty amazing growth. Imagine getting a 50% raise every month. As you can imagine, I’m excited to see what happens in 2006. The current level of income is OK, but the momentum is incredible. This is one thing I love about being an entrepreneur. Some people think a stable paycheck is nice, but for me it would mean giving up way too much. I’d rather work a whole month for only $53 and be building this kind of momentum than get a flat salary month after month. Security is worthless if you have to sacrifice growth to get it.

I’ve no idea how long this rate of increase will continue. But even a 10% ongoing monthly increase will triple the monthly revenue over the next 12 months, and a 20% increase will multiply it by 9. Check back with me in a year to see how I’m doing.

The chart above is for Adsense revenue only, not total site revenue. I also earn income from other ads, affiliate programs, and donations. I didn’t chart those other sources though because they’re too recent, so I don’t have any long-term data. But they’re already showing promise, and it looks like they’ll be fairly stable too. If I were to include those other income sources, then the income growth rate is even better than 50% per month. But I think it’s interesting just to look at the Adsense data. I expect to have an easy time making six figures from this site this year.

It’s interesting that the traffic growth has been 21% per month while the revenue growth has been 50%. Adsense revenue is obviously a function of traffic, so why the difference? Mostly I credit the difference to optimization work I’ve been doing each month, so the ads get a much higher CTR and CPM than when I first started (CPM has more than doubled). And Google is continuing to optimize Adsense as well, so I gain the benefits of their improvements. I think more ad dollars are flowing online too. Advertisers absolutely love blogs. And I’m OK with the ads because most of them are directly related to personal development. If the ads were worthless, people wouldn’t be clicking on them.

What created this traffic growth? Word of mouth. Nothing I’ve done directly has had as much impact as basic word of mouth. I do virtually no marketing — my visitors do it for me. Blogging technology certainly facilitates this effect (via feeds, pings, and trackbacks), but ultimately the growth comes from people telling other people about this site. And for that I’m very grateful. A referral is the best form of feedback.

This is a fascinating business model. I didn’t invent it, but I’m enjoying the ride. It’s so incredibly simple, much simpler than running my games business was. The risk is virtually nil, and there’s basically no overhead aside from web hosting (assuming you already own a computer and have internet access). There’s no selling, no products, no customers, no order processing, no fraud, no inventory, no shipping, and no deadlines. And yet you earn income 24/7.

But what I like best about this model is that it allows me to share my best content for free, which means it will reach more people. Not everyone is going to buy a book or CD or attend a seminar on personal development. But anyone can benefit from a free article, and this site now has over 300 to choose from. All free.

Thanks for helping me achieve my dreams!

Edit 5:08pm: Someone asked me about bandwidth usage. In Feb 2005 this site used about 2GB of bandwidth. In Dec 2005 it used almost 200GB, so that’s a 100x increase. The audio content does require significant bandwidth, but my current hosting arrangement still gives me some room to grow. I can always offload the audio files to a separate server if needed.