Alex Jones is in the business of selling fear and business is booming

alex_jones_money2By Alex Seitz-Wald
Salon.com

It’s good to be Alex Jones. Matt Drudge, the conservative Web entrepreneur and news aggregator, proved prophetic when he predicted that 2013 would be “the year of Alex Jones.” The longtime conspiracy broadcaster is finally breaking into the mainstream consciousness after a buzzy interview with Piers Morgan and his Boston bombing conspiracy, and traffic to his websites has never been higher. The conspiracy business is booming.

And make no mistake, it is a business. That’s not to say that Jones isn’t a believer — there are easier ways to make money — but Jones has built a multi-platform new media empire in his Austin, Texas, Free Speech Systems LLC that reaches millions of believers and promises advertisers that it will “direct lucrative buyers to you from our daily audience of active enthusiasts.” And all told, Jones is very likely raking in millions.

Jones didn’t invent the business model, but he may have perfected it. He comes from a long line of what historian Robert Goldberg calls “conspiracy entrepreneurs” that stretches back through at least the early Red Scare, and up through the John Birch Society, the JFK assassination and the Roswell incident to the Jones school of the New World Order. But while others merely got by on the sale of their books and tapes and lectures to a niche audience, Jones has industrialized conspiracy for a mass audience.

Jones’ company broadcasts around the clock from his state-of-the art, 7,600-square-foot radio and TV studio that employs 15 people and cleared  $1.5 million in revenue in 2009, according to a Texas Monthly profile. But a lot has changed since then. In 2011, he launched the Infowars Nightly News TV program to anchor his new subscriber TV network, which has expanded its lineup as traffic to his websites and general visibility has exploded, meaning his revenue is probably much bigger than it was just four years ago.

How big? We consulted half a dozen experts in online, radio and video marketing to ask them to make educated guesses based on publicly available information — and while the numbers are educated estimates, they suggest that rather than crazy, Jones may be crazy like a fox. What’s clear is that he’s savvy and moved adroitly to capitalize on a market that he helped create, impressing every one of our experts with his strategy of developing a loyal cadre of fans who are probably responsible for the bulk of his income. So follow along as we try to put price tags on the disparate colonies of the Alex Jones empire.

Jones has a a lot of revenue streams, from T-shirt sales to lectures, but let’s start with the websites. Eric Covino, the president and founder of Creative Signals, a digital marketing, SEO and online P.R. agency, took a look at the numbers for Jones’ Infowars.com from an industry tool called SemRush and came up with a revenue estimate for Salon. “I don’t think it’s double-digit millions but I would guesstimate that it’s somewhere between 3-6 million per year based on the traffic numbers and the brand loyalty,” he said.

Covino noted that Jones benefits from “multiple levels of monetization” in the types of ads he offers, and also from “not only a huge following but also a fiercely loyal one,” which helps boosts his rankings in search engines. “It’s a great study in what passion can do for a site,” he added.

We can even calculate that number a more traditional way as well, so bear with us as we show our math. Online traffic numbers are notoriously slippery to measure, but the closest thing to an industry standard is the data provided by a company called comScore, which estimated that Jones’ Infowars.com received 2.14 million unique visitors and 20 million page views in February, the most recent month available. PrisonPlanet.com, Jones’ other major site, got a little less than half of that.

The brochure that Jones provides to potential advertisers is a bit more bullish, but not too far off, saying Infowars gets “over 3 million” unique visitors per month and “over 20 million” page views. PrisonPlanet, according to Jones, gets more than 1.5 million unique visitors and 8 million page views. And Jones has Drudge to thank for much of this, as the conservative news site is Infowars’ top referrer, responsible for over 9 percent of the traffic driven to the site.

Knowing this, the main variable remaining is Jones’ average effective CPM (cost per impression). This is the standard industry measure of what advertisers pay for each 1,000 times an ad is displayed to a reader. (Jones actually uses networks like Google AdWords, so he gets paid per click, so we’ll call this his “effective” CPM.) The average CPM for a news site ranges from $4-$7, but can go much higher, depending on the site.

Stay with us here. David Steinberg, CEO of the New York-based digital ad agency XL Marketing, estimated Jones’ effective CPM is probably around $5, which he calculates to produce a significantly lower number than Covino’s, at between $1  million and $1.2 million per year. There’s also YouTube, where Jones has almost 545,000 subscribers, but while some people have made big bucks on the video service, a prominent YouTube monetization consultant pegged Jones’ revenue from the site at just $34,590 a year.

But, Steinberg said, the websites may not be the point. “He’s using the site primarily to feed people back to his shows, which is probably where he generates more of his revenue,” he said. For instance, Jones uses his prime ad position, the top right corner of the page, to advertise his own show, suggesting “he thinks it’s more valuable for his brand to be pushing himself in that piece of real estate versus other advertisers.”

So how well does Jones’ show do? For that, we need to go down the rabbit hole of talk radio economics. Our guide will be Bill Figenshu, who has nearly 40 years of experience in the talk radio business, including senior executive positions at CBS, Viacom and Citadel, and now consults for the industry.

Read More Here