Today the Financial Times ran the most extensive article to-date on how Dogster, Inc. has made a real business out of running happy community websites. Though it’s professionally gratifying to have our business stategy highlighted by the Financial Times, I also wanted to share this article as it’s exactly the same advice I offer to anyone seeking direction on making a business out of a passion-centric website.

Text ads from Google were not a permanent solution, however. As Dogster’s audience grew, Mr Rheingold found that the returns from Google advertising were not as high as he liked. He experimented with advertising resellers, which sell banner ads across large numbers of websites, but again found that returns were lacking.

“We’ve found that the best way to get ads that are relevant to our members is to have our own inventory,” he says.

By selling its own inventory of banner ads to companies that specifically wanted to target dog and cat lovers, Dogster is able to charge $5 or more for every thousand impressions on this site.

Although this required an in-house advertising team, it was a far more lucrative proposition than the 12 cent CPMs he was getting with banner ads or the few cents a click he was getting from Google.

The whole article can be read here. We actually make more via AdSense, but $6k a month does not a business make.

There’s more to our financial success than the article covered, such as seeking advertisers that want strategic sponsorship-like relations and going the distance to deploy advertising campaigns that will be well received by our membership, but it’s a good start and I wanted to share.