Earnings UP - Life Without PayPal Is Good
Last month I posted about how sometimes being a webmaster sucks - I complained about Adsense earnings being down, getting banned from Paypal, having trouble with website members, and several other things that were pissing me off.
When I wrote those posts I was ready to throw in the towel because it seemed that nothing was going right.
Fast forward to now, several weeks later and things are getting back to normal. Adsense earnings are back on track, Kontera earnings are right up there with (and sometimes better than) Adsense, I won 2nd Place in Kontera’s Video Contest, members are back under control at the website, PayPal gave me back my money, and best of all, April 2008 was a record month for earnings, coming in at just a hair over $14,000.
I knew April would be a good month because of being forced to change subscription members from low-priced monthly fees (via PayPal) to a single, higher-priced flat-fee via Google Checkout. But what has been surprising to me is that the new Premium Member sign-up rate has remained almost constant even with the higher (one time) fee. Although I highly doubt that we will break our April earnings record it looks like May ‘08 will be another very good month - the best part is that I can say fuckyou PayPal, GoogleCheckout is more than happy to take my transaction fees (and Google Checkout fees are lower!) .. Although as usual i’ll be under the gun to make sure that Premium Members are getting value for their money. I’m working on a new contest as well as some site-upgrades so hopefully we can keep everyone happy.
I guess the old saying about making lemon aid when all you have is lemons is true.
Uncle Sam Wants You! … To Pay Your Taxes
I just got back from visiting my tax person, and boy does my ass hurt. Seriously though - having an online business that rakes-in the gross earnings can really come back and bite you if you don’t plan ahead.
My online gross income for 2007 came in at just slightly under $80,000. Net income after all was said and done was about $72,000. Total taxes (state and federal) that needed to be paid was in the neighborhood of $18,000 (hard to tell exactly because the total tax is munged in with my day-job income as well as my wife’s). Because no taxes are withheld on any of my online income it would have been very easy to blow it all on fast cars, stereos, and other krap, and be left with $18k bill come April 15. Luckily last year I read a blog post somewhere (sorry, can’t remember who’s or i’d give you a link) that recommended planning ahead and how not to get stuck with a big tax bill. Since I didn’t follow all of that advice, I still have to write a check for about $10k, but since I was planning for it and have that cash set aside it doesn’t hurt quite so much.
If you know that you’re going to have a significant “additional income” (Schedule C) you should file quarterly estimated taxes. This is what I’ll be doing beginning THIS year. Had I done that last year I’d probably be getting a refund right now instead of having to send a $10k check. Instead of filing estimated quarterly taxes, I choose to have my current employer withhold an additional amount in each paycheck. Having additional taxes withheld is as easy as filling out a new W-4, and specifying the amount on line-6. Had I not done this I would have had to pay some serious under-payment penalties in addition to that $18k or so in tax.
Here’s a few other tips for anyone making money online for the first time:
- Report ALL of your “additional” income. If you made over a few hundred dollars from any particular advertiser they will send you a 1099 - they also send a copy to the IRS
- Report ALL of your PayPal income. It might be tempting to think that the IRS wont find out about your little PayPal empire, but if/when you get that audit letter you’ll be wishing you had reported it if you didn’t
- File quarterly estimated taxes if your earnings are up there with the big-boys
- If you aren’t sure you will be earning enough to file quarterly estimated taxes, at least submit a new W4 form and have your employer deducted an additional amount from each paycheck. My employer was deducting about $900/month, but it wasn’t enough
- Dont forget your deductions! I was able to write-off (legitimate) things such as the home office-space I use, a portion of my internet bill, home electric bill, and even my iPhone and bills (which really are for ‘the business’). Don’t get greedy or make stuff up - it’s not worth the risk
- If you aren’t sure of what you will need to pay, start setting aside some cash toward the end of the year - We had an extra $20k set aside because we knew we were going to have a big tax bill.
- Have an expert help you with your taxes. In the past we always did our taxes with TurboTax, but because of the significant online income in 2007 this year we decided to have an expert help. The cost of $250 was well worth it.
Paying taxes on your online earnings is part of the fun of making money online - but if you don’t plan ahead you could screw yourself. It might be too late for your 2007 earnings, but now is the time to start thinking and planning for 2008’s income.
Disclaimer: I am not a tax expert and I don’t even play one on the internet. I just got bored this afternoon after having my taxes done and decided to make a post about it. If you have questions or concerns about your tax shituation, please consult someone that knows what they’re talking about.
Kontera Earnings In A Free-Fall
I’ve been using Kontera for about 9-months now and in that time I’ve probably been one of their most vocal fanboys. Starting out strong with an eCPM of over $3, and averaging $45-$75/day in earnings, I’ve recommended Kontera to everyone that will listen. Most webmasters that have tried Kontera based on my recommendation have reported back to me that it’s worked great for them - only a few have reported that it did not perform well for them at all. In general Kontera performs best on content-heavy sites like forums or “how-to” sites and does not do well on smaller sites, mini-sites, or MFA sites.
A Bad Month For Kontera
Starting in about mid-December of ‘07, my Kontera earnings and eCPM began to take a dip. Adsense was also down during this period, as well as traffic so I attributed the dip in earnings to “the holidays”. Beginning about the second week of January, traffic (and Adsense earnings) were getting back to normal - even above normal, but Kontera was still struggling to break $20/day, with an eCPM of less than $1. I sent an email to my account manager, asking him “WTF?!”, and he responds that publisher budgets and campaigns are down (normal for this time of year) but he was going to add the ‘consumer electronics’ category to my site which should help increase the eCPM.
Fast-forward to a few days ago and I realized that Kontera’s In-Text links are not even loading on my site - no, wait, they’re loading but they are taking over 45 seconds before they appear! I checked a few other sites that I know use Kontera (www.askdavetaylor.com) and notice that they are loading very slowly also (20-40 seconds). I send another email to my Account Manager and he responds that his operations people tell him they are doing and upgrade or something, and this might be causing the slow load times. Figuring that ad load-times this slow aren’t doing anyone any good, I removed Kontera from my site completely. The next day I see that Kontera is loading normally on other sites so I added it back.
This morning while checking earnings from yesterday I see that Kontera did not even break the $10 mark (eCPM hardly over $1) so I checked the load-times again and found that Kontera is taking over 30 seconds to appear on all my pages.
Combine low advertiser budgets and fewer campaigns with load-times of over 30 seconds and what do you get? You get no more Kontera ads on my website until they figure out how to correct these issues. I will monitor the ad-load times on other sites that use Kontera and test it on my site a few times for the next week or so before I go looking for a replacement.
C’mon Kontera, don’t make me go find another good PPC system.. Let’s get back to the good-old days of instant-loading In-Text ads, and normal eCPM.
**Update: 7 or 8 hours later and I decided to add Kontera back to the site to test it. The In-Text ads were loading fine for about an hour, but now they are back to taking 45 seconds or more before displaying. It seems that their adserver, kona19.kontera.com is what is causing the problem, because that’s where things seem to hang up.
December Earnings: $274/Day
This will probably be my last monthly earnings report. Unless I am overwhelmed with reader-responses/requests, I will probably post earnings updates one or two times for the year from now on.
Total earnings for December 2007 were a record-setting $8,506. Even though Adsense was at it’s lowest in months (2nd lowest month of the year), premium subscriptions at over $4,800 pushed us way over the top. Kontera performed about average, at just over $1,100.
This month was a record for expenses (and tax deductions!):
- Server Hosting: $175
- $175 for contest prizes
- ~$750 for Mugs, Shirts, Mousepads, and other giveaway items to keep around the office for contests and whatever else comes to mind.
I was fearful that December would be a slow month, but instead it turned out to be a record-breaker - despite the second-lowest Adsense month of the year.
Here’s to a great 2008 to all my readers.
