When he quit the Prospect in early 2001, Marshall intended to earn a living as a freelancer, using the blog as a loss leader to advertise his skills. He had no notion of earning any money directly from it. But the freelance market was tightening, and Marshall found himself stringing together assignments “for no money at all” from Slate, Salon, the Washington Monthly, and elsewhere. (He also briefly wrote a political column for the New York Post.) He began to have flashes of doubt about the blog, wondering, “Why, when I was really only marginally able to support myself, was I spending all of this time doing something that couldn’t make any money?”

Then three things happened. First, the blog’s readership spiked dramatically, from 8,000 to 20,000 page views a day, at the end of 2002, when Marshall publicized Trent Lott’s implicitly pro-segregation comments at a dinner in honor of Strom Thurmond. With the help of readers’ tips, Marshall demonstrated that the Mississippi senator had a long record of similar talk. Many other blogs, including some on the right, piled on, and the episode ended with Lott’s resignation as Senate majority leader. Second, in late 2002, Marshall began to receive tip-jar-style contributions from readers—nothing much, but it was an early inkling that his audience might support the site. Finally, one day in 2003, Marshall got a pitch from Henry Copeland, a former freelance correspondent in Eastern Europe who had developed a new technique for selling advertising on blogs.

“It took me several months before I finally agreed to try it,” Marshall says. “We were trying to work out an initial price point. This was all so new. Should we charge five dollars to reach our audience? A thousand dollars? We set our price, and a couple of weeks later we sold our first ad.” By the
end of 2004, Blogads.com (as Copeland’s service is known) was generating around $10,000 a month for Marshall. He could stop scrounging for assignments at Slate and the Washington Monthly.

A half-dozen or so other political bloggers took advantage of their new Blogads.com windfalls to quit their day jobs. Marshall did much more: he decided to raise additional money from his readers to expand his site, giving birth to TPM Café and TPM Muckraker. “Josh keeps upping the ante,” Copeland says. “He says, ‘Give me a new set of cards; let’s play it.’ It would have been easy for him to just keep blogging like mad with a simple design. His expansion efforts have sucked up a lot of energy that might have gone into perfecting the core blog.”

Marshall’s first explicit call for reader contributions came in late 2003, when he successfully asked for support to cover his travel costs for a ten-day trip to New Hampshire during primary season. (That appeal netted $6,000 in twenty-four hours.) In early 2005, he passed the hat for a far larger amount, to support the launch of TPM Café. That appeal netted $40,000, and allowed Marshall to hire his first full-time colleague. Another fund drive later that year took in $80,000, which permitted the hiring of Rood and Kiel and the creation of TPM Muckraker. As recently as this past March, Marshall asked for money to support a further staff expansion. Marshall says that on three occasions, he has received donations of $1,000, but never anything larger; the vast majority of his readers’ gifts, he says, are in the range of twenty to fifty dollars.

The theory, Marshall says, is that the “pledge drives” should support a substantial portion of the first year of a new hire’s salary—but that beyond that first year, the employee’s salary should be covered by expanded revenue from advertising. At this point, Marshall says, roughly a third of the site’s normal monthly revenue comes from Copeland’s Blogads (which currently charges $10,000 for a “premium sidebar” ad at TPM); another third comes from banner advertising brokered by other companies (recent banners at TPM have pitched cell-phone horoscope services and the film National Lampoon’s Dorm Daze 2); and the final third comes from NextNewNetworks, a start-up Web-video firm that pays TPM to create short daily video segments.

“We’ve never had any investment capital behind us,” Marshall says. “So we have to be profitable every month. It’s all on a kind of cash-as-you-go basis.” Larger print-media companies have occasionally approached Marshall about buying or investing in the site—“that’s even happening now with a couple of places,” he says—but those conversations usually break down when it becomes clear that the investors are really only interested in purchasing Marshall’s individual services. “I’ve got half a dozen people whose livelihoods depend on me,” he says. “At a minimum, everyone working here now would need to still have a job.”

David Glenn is a staff writer for The Chronicle of Higher Education.