We normally don’t discuss our business operations on the blog, but there’s been a topic I’ve wanted to address that’s been coming up in conversation: advertisements on Cupcakes and Cashmere.
First, some quick background. As many of you know, when this site launched over seven years ago, it was purely a creative hobby. Making money from the content I created was not a real consideration; I simply wanted a way to document things about which I was passionate. Back then, banner ads were the dominant form of digital advertising and most blogs would slap a few units across their site to earn a little extra cash. After a bit of steady growth, our audience was sizable enough to generate enough money that I was able to make the blog my full time job; and in 2012, we signed a deal with a media company that provided enough revenue to hire our first employee. A majority of the money came from banner ads, which allowed us to limit the amount of sponsored content, even though the industry was moving aggressively in that direction.
Over the past few years, the banner business has essentially been in decline, with ad rates plummeting, because of the overabundance of inventory. Basically, there are too many ad units and advertisers have been seeing increasingly poor performance, so many have shifted their budgets to new categories, often referred to as “native content” (aka sponsored content). As a business that relies on advertising as a primary revenue source, this change in media strategy directly impacted our business, so we had some tough decisions to consider and adapting was necessary.
We have some lofty goals for 2016, bringing on several new employees and expanding our content to new voices and categories, and as a self-financed company (we prefer not to have investors yet), maintaining a strong revenue stream is essential. The real challenge we have is finding the right balance of editorial and ad supported content. Ideally, we'd like to have a ratio of 90/10 (editorial/sponsorship), which is around 3 to 4 sponsored posts/month. Some people couldn’t care less about sponsorships; others dislike any form of advertising, and some people fall somewhere in between. We understand every perspective and our goal has always been to create aspirational and compelling content, regardless of whether there is an advertiser attached. After years of creating limited sponsored posts, I know it can be jarring to see an increase, and to be fair most advertisers are using their remaining budgets in Q4, so it’s been busier than normal, but we work diligently with our partners to craft content that aligns with our voice and vision. Ultimately, we have full creative control over all opportunities and if we feel a brand is not a fit for content we'd normally create, we simply don’t work with them.
We truly appreciate all the support you’ve provided over the years and want to ensure you that our vision for Cupcakes and Cashmere has not deviated, despite some of the recent changes. Like any other media platform, such as magazines, television and radio, our business is mainly ad supported, so while some may see blogging as a hobby, it’s not one for us and we’re very proud of what we’ve built together. If you’ve fallen into the camp of feeling frustrated by an increase in sponsored posts, I hope this transparency helps. Being straightforward about our goals helps everyone understand our approach, and I’ve never wanted to take an “aw shucks” standpoint about our business or success. Ultimately, advertising revenue is how we pay ourselves and our employees, put food on the table, and create the hundreds of free content pieces that are not ad sponsored. As we begin to diversify into new product lines and other forms of content distribution, we hope to rely a little less on ad revenue and are working to streamline that process.