I have been debating for quite some time to write this article. On one hand, I feel like I have an overwhelming responsibility to tell our readers the truth about the camera industry and the economics of running a website, and on the other hand, I know that such a provocative article would probably earn me plenty of hate from the publishing industry. But after seeing a few of the past events related to the launching of a few cameras, the same thoughts kept on creeping up and I finally decided to do it. I decided to write on a topic that nobody wants to talk about – how camera companies and everyone else involved in the camera industry are banking on people, AKA the consumers. I wrote this article primarily because of the sense of guilt I have had for years now and also because I do not want our readers to fall into the traps of consumerism. Grab a cup of coffee, sit back and get ready for some entertainment – I assure you that it is coming!
The Nikon D850 is sold out everywhere. Even if you try hard, the likelihood of you finding a sample unit at the retail price is close to zero. It is crazy to think that a camera that has just been announced was already sold out within hours after the announcement. In fact, I would argue that the D850 was sold out long before its announcement, thanks to all the Internet hype – and everyone benefits from such hype. Websites thrive on rumors, because it drives a lot of traffic that they bank on through advertising. Once the announced camera ships, they double-bank because of the profits associated with the pre-orders. Retailers love the Internet hype, because those pre-orders result in thousands of cameras being sold without much advertising effort on their sides. Camera manufacturers cash in on the hype the most, as they struggle to make enough cameras to ship – the demand is so strong that they don’t have to move their butts to create awareness and spend out of their marketing budgets on advertising. Everyone involved gets a share – the bigger they are, the bigger the share. Welcome to Marketing 2.0: The Hype.
Everyone has funny stories to tell from their early days in photography. Let me tell you mine. When I got my first Nikon DSLR with an 18-135mm zoom lens, I always blamed my gear for bad pictures. One day, after doing some online research, I came across a website on the first page of Google, with what it seemed like a very knowledgeable photographer, who guided me via an article on how to set up my camera. He said that JPEG small was the way to go, and that all lenses out there are junk except for the most versatile lens ever made in the history of mankind: the Nikon 18-200mm. He said that photographers were dumping all of their lenses from their camera bags and downsizing their gear to just this one lens, because it was so good. After reading this very convincing article, I decided that every bad picture I had was a result of the bad 18-135mm lens I owned, so I started my quest on purchasing this new amazing gem, the Nikon 18-200mm. The problem was, the damn lens was nowhere to be found! Later on I found out that this one photographer was so successful in convincing many Nikon
idiots shooters like me, that he alone created a demand for this lens that Nikon could not even keep up with. Who knew that one person who could outrank NikonUSA in search engine rankings could have such a powerful influence over other photographers. It took me 6 months to finally receive the 18-200mm and after just a few days with the lens, I realized how stupid I was for falling into this trap. Here was the lens that was supposed to make beautiful images for me and yet it was no better than the 18-135mm I already owned. I felt cheated and lied to, but it was a good lesson to be learned.
The idea of a social media influencer spread like a disease all over the corporate world. Companies quickly realized that they were getting very sluggish sales by advertising their products in newspaper and online ads of large publishing companies. Instead, concentrating on smaller niche publishers and social media influencers proved to be much more fruitful. Instead of going after the mass market, why not target the loyal fans of a niche market or a successful individual? Websites that attract like-minded people are far more successful at what they do compared to a large publication that has to cover everything. It did not take long for traditional media to die off and disappear, with new heroes on the block – the social media influencers.
It is nice to be one for sure, since you get all kinds of benefits. The higher you stand in your status and following, the bigger the privileges. Better yet, if you can be a combination of a celebrity and a social media influencer, you are guaranteed to have every door open for you. You don’t even need to show off your millions of Facebook, Twitter, Instagram and Snapchat followers – companies will come flocking your way, asking you to promote their products in exchange for money. Some climb up so high that some retailers even fight over who gets to be the “exclusive”. This was another funny story I heard a few years back…
What’s the big deal about these niche websites and social media influencers, you might think? Loyal followers. And that’s exactly what the sales teams are after. The problem is, many followers have no idea that the products their idols praise so much are actually fed by someone else – be it a watch, an energy drink or an expensive camera.
Website Economics 101
Have you ever wondered about how much money a photography website can generate on a newly announced camera? Let’s take a look at the primary sources of revenue for any website (including PL):
- Advertising Revenue (Banner Ads)
- Affiliate Revenue
- Sponsored Content
- Email Marketing
Keep in mind that there are many other sources of potential revenue for a website, but I am just listing the main ones. In fact, if we were to concentrate on the highest revenue-generating sources of income, the first two would be the most significant – Advertising Revenue and Affiliate Revenue. Those two sources alone typically generate over 90% of the revenue on a new product announcement.
Let’s take a look at the details, shall we? This is the part that many publishers rarely ever disclose, but I personally don’t care, as I feel that it is too important to skip.
1. Advertising Revenue
Banner ads. Who knew that anyone clicks on those stupid things? But that’s what most of the advertising revenue comes from for any website. The more traffic, the better. In fact, websites do everything they can to create tons of click-bait content for the sole purpose of driving advertising revenue. As someone who has been operating a website for a number of years, I have a confession to make – photography articles rarely ever create good website traffic. Gear reviews and any content related to camera gear create far more traffic and it is a fact. I have far more views on a review on the day it is published than on an educational photography article. Case in point: my “Five Easy Steps to Improve Your Photos via Post-Processing” got a total of 17 thousand views ever since it was published over a month ago, whereas I got the same number of views on the Nikon D850 Announcement the day it was published! Sad, but true. Camera-related articles drive tons of traffic to websites, because everyone is obsessed about camera gear.
Another proof of camera gear obsession lies in our email distribution lists. Take a close look at the following screenshot:
Out of 35+ thousand people that receive our emails, most people prefer checking out gear-related articles, as the above shows. As you can see, close to 30% of readers opened the Nikon D850 announcement article, and almost 10% of them clicked on the article to read it, whereas other articles did not get nearly as much attention. This is another proof that many of us are obsessed about camera gear more than any other topic.
So how much money would banner advertising bring to a website? Well, that’s all a matter of traffic and banner ads – the more traffic and banner ads displayed, the higher the revenue. As simple as that. Let’s take a look at a sample 2016 advertising revenue report for PL:
On average in 2016, advertising revenue for PL was roughly $175-250 per day – and that’s with minimal and less obtrusive 3 ads per page. In November and December, I experimented with more ads and I was able to get up to $500 per day of advertising revenue. I backed out of the idea at the end of December, because I did not like what it did to user experience, so the number of ads were dropped back to the minimum in 2017. So on average I made between $5K to $7K per month, but I was able to get as high as $12K at the end of the year. If I was primarily focused on revenue, I could easily get $10-$15K a month for the small amount of traffic I receive when compared to some other much bigger websites. For a comparison, a site like PetaPixel could easily bank $50K a month on purely advertising revenue.
2. Affiliate Revenue
Let’s now take a look at “affiliate marketing”, a term that has made companies like Amazon and B&H Photo Video highly successful. It is crazy to think how successful affiliate marketing has been for many companies out there, including photography websites. Here is how it works – a seller (for example Amazon) wants to sell more products. It recruits many niche websites to write about products and gives them a percentage of the revenue they help generate. The website publishes an article or a review, then posts a link to the seller’s website with tracking information. If their reader buys a product through that link, the website owner gets a share, typically based on a percentage.
Now here is how the actual math works. For cameras specifically (which are considered part of electronics), the retailer gets roughly 10% cut on camera sales. For example, the Nikon D850 is a $3,300 camera, so Amazon would get $330 for every D850 it can sell. Since retailers have to spend a lot of money on advertising to promote sales and push more cameras out, they figured out that if they partner up with other niche, but powerful websites and influential individuals, they can generate a lot more money. The 10% cut has to be split between them and the affiliates, but the long term benefits are incredible. In fact, they double-bank on the affiliate system: not only are they able to drive more sales this way, but each and every link that goes to them through their affiliate program also generates a long-term SEO (Search Engine Optimization) benefit, since it is a permanent backlink (URL link) to the retailer. That is why when you Google for something like “Nikon D850”, retailers such as Amazon and B&H Photo Video pop on the first page. The more links to the retailer’s camera page, the higher their SEO rankings.
So what kind of percentage share can a website expect from online retailers? Depending on how big a website is, that percentage share can vary from 3% to 5%. That money goes from the 10% cut that the retailer gets, so if an affiliate earns say 3%, the retailer would only be able to make 7% from the camera sale. Let’s now put things in perspective. Say on average an affiliate earns 3% from the MSRP. In the case of the Nikon D850, that’s basically $100 per camera. If an affiliate is influential enough to push 100 cameras to its readers, that’s 10 grand right there. Why do you think you see those “Pre-order the Nikon D850 Today” articles and advertisements floating all over? Rumor websites bank on affiliate sales like crazy, because people pre-order their cameras through them, since they are probably going to be the first ones to post those links.
Affiliate marketing does not stop there – 3%-5% is the bare minimum and it is only relevant to hardware. If a website promotes software, the commissions are far higher in comparison. For example, if I were to promote Adobe Creative Cloud at PL, I could get up to 85% commission from the first month and up to 8.33% from the first year on a pre-paid plan. I have received a number of emails about this but, since I have no plans for promoting Adobe products, I never bothered responding to any of those inquiries. Here is a screenshot from one of the emails:
If you find these numbers hard to believe, head on over to Adobe’s Affiliate Program page, where you will find all of the above information right on the first page. Next time someone tells you about the glory of Adobe Creative Cloud, perhaps you should take a look at their links and see if they really believe in the product, or they are saying it in order to drive more affiliate revenue.
Summary: websites and blogs do not just post information about cameras because they want to post news or create awareness among their readers – they have direct monetary gains from them, including PL.
Marketing 2.0: Leaky Leaks
As I have said earlier, the Nikon D850 was sold out before it was even announced, thanks to all the hype that was created by rumor websites. But what are rumor websites really? We have some mysterious people behind them that want to stay underground and provide nicknames like “Admin”, who claim to have legitimate sources that provide leaked information. But let’s get one fact straight – rumors are very beneficial for manufacturers.
Rumor sources are not some people who breach NDAs (non-disclosure agreements) who do not want to get in trouble and hide their real names. Surely they will try to stay anonymous for a rumor website by creating a fake email address and writing from it (after-all, it would be bad if others found out that the company was directly involved in rumors), but who cares at the end of the day, since they provide fairly accurate information way before the announcement. How is it possible that we already knew everything about the Nikon D850 way before it was even announced? Specifications leaked out months in advance and pictures of the camera were already posted on rumor websites before the official announcement. Some might argue that a camera would have to be touched, tested and manufactured somewhere, so someone might leak some information about it along the way. Trust me, companies like Nikon do make sure that nobody spreads any unauthorized information on an unlaunched product – everything is kept secret under very strict NDA rules. If anyone breaches their NDA, Nikon would definitely take them to court. That’s how serious NDA documents are.
However, I have a big suspicion that these leaks do not originate from photographers and third party vendors. Considering how much benefit they bring to the manufacturer, it only makes sense to suspect the manufacturer to be responsible for information leaks. In fact, there is one piece of now-forgotten evidence that points us to this. Remember the Nikon D500 launch? Someone at Nikon screwed up big time on it. Do you know what their mistake was? They failed to leak out any information related to the D500! If you back-track your memory, that camera announcement caught everyone by surprise. Not a single rumor site said a word before the camera was announced, because their sources were “silent”. Whoops. I am not sure if it was an experiment on their side, but I am sure the sales numbers did not look as good when compared to other previously leaked releases.
The rumor mill was an interesting playground for me personally – at the time, I used to write about rumors (and got tons of traffic as a result). I would get occasional emails from different people who claimed to have some information about upcoming Nikon products. One even assured me that a “Nikon D400” type camera was definitely coming. I had my reasons to suspect who those people were and there was always a pattern to each and every one of them – their English and their writing skills were terrible, as if someone intentionally made those look bad. It did not take me long to suspect that those who leak information had something to do with the product in the first place. The traffic generated by rumors was very appealing, but I made a decision not to ever post rumors again, because I did not want to be a part of the “hype”.
If you think manufacturers leak information about their products by accident, or that rumors only do harm to them, think again! Rumors are great for everyone, since they all translate to one thing: sales. Those leaky leaks are highly intentional and successful marketing techniques. And if you have been participating on rumor-related articles with “Shut Up and Take My Money” memes, their mission is accomplished.
The Nikon D850 Over-Hype
The Nikon D850 is the best DSLR Nikon has ever made – it is a game changer. But wait a second, didn’t we hear that already before? What about the D500, D800 and the D700? Those also claimed to have the “best” and “game changer” titles. It seems like every few years we get the new “best”, the new “do it all”, amazing camera. Guess what, when Nikon releases a mirrorless camera next year, it will again be a game changer. A beautifully crafted pattern, isn’t it?
The Nikon D850 is the most over-hyped camera since the Nikon D800. But remember what happened with the D800 hype? So many people ended up disappointed, especially when all the focusing issues started to surface. One would think that photographers would learn from being scapegoats once, but here we go again! Tens of thousands of people are sitting pissed off in their chairs reading about the Nikon D850, since their pre-order has not shipped yet. It is 2012 revisited, literally. Once again, Nikon fails to meet its customer demand. Tons of cameras are rushed to the market, mostly claimed by the NPS (Nikon Professional Services) members. There will be months of waiting, thanks to all those folks who have placed pre-orders at 5 places at once (yay to Guinea Pig Pre-Orderers). Those who received a few extras because they clicked on a pre-order link first are already doing what’s best for them – selling them for a profit on eBay (looks like the last D850 sold for $4783!). Others are teasing the crowds with their unboxing videos and “first impressions” previews. Nikon will not be able to fulfill D850 orders for months to come, again, exactly same as we had seen with the D800. All thanks to The Hype the Internet has created for this camera.
Sadly, Nikon is not the only company that does it – look at Canon, Sony, Fuji and many others. Everyone is in the hype game, because it sells. The Fuji X-T2 is the best Fuji camera ever made. Sure, until the X-T2S with image stabilization comes out – that will be a real game changer. The Sony A9 is the best Sony has to offer, until Sony A9R comes out that will beat the Nikon D850 in every spec; that surely will be a game changer. Aren’t you tired of this garbage getting shoved down your throat?
Are You a Consumer?
Now the question is, are you a smart buyer or a consumer? If you get excited reading about camera rumors and buying every new iteration of a camera, you are not a smart buyer – you are a consumer. The bigger question is, can you actually afford the gear you are buying? If the answer is “yes” and if buying a new camera makes you happy, then by all means, go for it. However, if the answer is “no”, then you are a consumer, plain and simple. It really boils my blood when a reader emails me, asking if they should be buying a camera on a loan, because they cannot afford it. When I ask a few questions, it typically turns out to be camera lust more than anything else. Want vs need. Their existing gear is more than adequate and yet they think they need something else. A newer camera cannot magically make you a better photographer, just like a newer knife cannot make better-tasting food. I can understand if one was shooting with their grandpa’s film camera and wanted to invest in a digital camera for the first time. But even then, I would never recommend to finance a camera. That’s just not right…
As I looked at myself a few months ago, I realized that I also take part in the never-ending cycle of camera announcements and reviews. Yes, they do generate traffic and revenue, but if I am the reason behind someone else’s misery, I have as much guilt as everyone else in the chain. There have been times when I thought about stopping any gear-related articles and reviews completely, but others persuaded me to continue doing it, arguing that those technical articles and reviews also provide a wealth of information and knowledge. On one hand, I cannot be held responsible for other people’s decisions on buying camera gear. On the other hand, I look at the state of the industry and the constant want of people to get the latest and greatest and I feel the need to do something about it. The least I can do is create awareness among my readers by writing an article on the topic.
As I am getting ready to start writing my Nikon D850 review (which has been sitting on my desk for a few days now), I have been already thinking that it will be another glowing review of yet another new Nikon DSLR. Looking back at the Nikon D810 that earned a 5-star rating, I am already running out of stars to give. When another Nikon DSLR rolls out with even better features and an integrated EVF, it will be the same, all over again. In short, there will always be a better camera. As I look back at some of my favorite pictures I captured with my Nikon D700 almost ten years ago, I see light, color, subject and its beauty. I don’t see a tilting LCD or electronic front curtain. I don’t see automatic focus stacking or 45 Megapixels. Those are my favorite shots because I was able to concentrate on what really matters – photography.
Don’t be a victim of The Hype. Don’t be a cameraholic and a brainless consumer. Stop yourself from the Internet hysteria that surrounds cameras, lenses and other gear. Instead, spend time learning about photography techniques and improving your skills. Travel more, see more, shoot more. And when I review a piece of camera gear, don’t buy it because I praised it. Only buy what you truly need, not what you want. That’s all I have to say for today.