Paul Staines: Making money from the 'blogging lark'

The last 15 years have been grim for most UK newspapers. Circulation has fallen as readers and advertisers migrate online. Paul Staines better-known for his cyber alter ego "Guido Fawkes" has been at the forefront of this shift, with his political blog order-order.com and digital advertising agency MessageSpace. But Staines only got into blogging after an eventful career in finance.

He started out with futures firm Cargill, before helping to run a hedge fund specialising in technology. The dotcom boom "made me think I was a genius", says Staines he ruefully admits that the fund's value halved after the bubble popped. Due to a long legal dispute with his deep-pocketed backer, he was forced to declare bankruptcy in 2003.

By then political blogging was taking off, spurred by debate over the Iraq war. But most bloggers "were either closet Guardian or Telegraph leader writers". Staines wanted to do something "more gossipy". His wife was "livid" about his career move. But he set up his website in 2004, and it paid off during the 2005 election. A post on a controversial election poster made the front page of London's Evening Standard, catapulting his daily traffic "into the thousands".

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At first, Staines made money by selling stories to the nationals. But in the longer run, he knew he'd have to make as much as possible from advertising on his site. He set up MessageSpace with fellow blogger Alex Hilton, to help bloggers get a better deal from Google AdWords (which allows sites to bid for their advertisements to be displayed against key search terms). While it was initially a "hard sell", clients are now willing to buy space on a range of political blogs, from Conservative Home to Labour List.

Staines was one of the first to predict that the 2010 election would end in a hung parliament. This time, he's much more circumspect definite pronouncements are a "mug's game" although he believes Ukip's performance is crucial. As for the media business, he believes the nationals will continue to struggle.

The key, he says, is that online media enables consumers to get specific content without buying a bundle of unwanted material. The rise of big data and analytics means advertisers no longer have to worry about wasted spending. This is great for blogs with niche readerships, such as order-order.com. He jokes that while 250,000 people visit the site each month, the ones who matter are "the 5,000 of them who run the country".

Staines didn't take a salary from the blog until 2008. It now has a staff of five, as does MessageSpace. Even his wife, who was adamant that "this blogging lark is never going to pay as well as bond broking", has now "forgiven him". The fact that David Cameron made a video appearance at a dinner last year commemorating its ten-year anniversary shows how key the blog has become.

Staines plans to bulk up the section devoted to media gossip, where he believes there is a left-of-centre monopoly. His advice to would-be blogger/entrepreneurs is to "figure out how you will monetise it before you start". Quality content is key, he says but all successful "new media" entrepreneurs, such as the owners of online video channel vice.com, have kept their focus on the commercial, rather than the editorial, side.