Here’s an interesting read from the Online Journalism Review about monetizing traffic. The part that really caught my attention, obviously, was the section on Nick Denton and Gawker’s complex payscale.
Gawker Media writers are on a freelance contract and get paid based on the number of posts, with possible bonuses for traffic performance. The kicker is, there are loopholes in the way bloggers are paid.
While Denton wouldn’t get into the details of his pay structure, one of his writers told me more about the complex system for compensation, though declined to be named for fear of losing the work. According to this writer, a blogger with high traffic growth can “accrue a lot of potential money.” The problem is that the bonus is “banked” and the entire sum can’t be taken out in one month, leaving it to drop as the traffic drops in future months. To make it even more complicated, traffic bonuses are weighted according to a multiplier depending on the subject matter of the blog.
“There’s a maximum withdrawal per month,” the writer said. “So you could actually make $50,000 in traffic bonuses per month, but you could only take out $5,000 or so. But by the time a few months have gone by, your traffic could have trended downward, and it could have eaten up the traffic bonus you had earned. … It makes sense for Nick, but it makes all of us really uneasy.” Lockhart Steele, managing editor at Gawker Media, wouldn’t explain the details of the pay structure to me but said that any bonus plan involves a certain amount of complexity.
I can certainly understand how the system protects Gawker, at the same time giving some sort of incentive for the writers to drive traffic, but I mean how depressing is that if traffic is absolutely amazing one month? After that, aren’t you just watching your money get taken back from you?
Anyway, the article also talks about Jason Calacanis’s Weblogs, Inc., which was sold to AOL in 2005. Calacanis experimented with a 50/50 ad revenue sharing with his writers, and I guess the success rate was far from desirable. He eventually converted to a standard flat rate.
Here are two other good (somewhat old) reads about Gawker’s compensation. I Want Media discusses the system with former Gawker editor managing editor Lockhard Steele.
As it seems with most of my posts, the article may be old but it still applies…Right? Doesn’t it? Seriously, right?
You’re not there are you?