The Commercialization of Blogging

Fascinating post on New York Times which adds further credence to the slow march of blogs into the periphery of mainstream media.

Here are some of the key points:

• Bloggers who started out for fun are now finding that they have full blown businesses on their hands.
• More and more companies are considering post product placement on blogs.
• It's important to be honest about advertising on your blog.
• However, in the words of Anita Campbell quoted on NYT "I also don't apologize for accepting advertising, and I make it clear that just like everyone else I have to earn a living and pay the expenses of keeping the site going." couldn't agree more with this sentiment.
• It's becoming apparent that more businesses are noticing the influence of blogs and have spent an estimated $50 million to $100 million this year on blog advertising and marketing according to Forrester Research
• Interestingly US Web an online marketing firm has paid people $5 to mention a company or link to it's site. Examples include Lussori.com and Terra Entertainment who offered MySpaces users a mention on film credits if they included a trailer in their personal profile pages.
• A Forrester Research survey found in February that 64 percent of US national marketers are interested in advertising on blogs.

Will Chitika Strike Gold With Google?

I recently wrote on Performancing about giving some consideration to your blog business exit strategy. My post was spawned from an excellent piece of journalism on Business Week titled Googling For Gold which basically looks at the phenomenon of starting niche tech businesses with the intention of selling out to Google 12 months later. It was while reading this post that I spotted a particularly intriguing paragraph:

"Google is creating a whole new ecosystem for entrepreneurs, says Baris Karadogan of U.S. Venture Partners, a high-tech VC firm in Silicon Valley. Karadogan says he's closely watching a group of entrepreneurs who are designing a highly specialized online advertising tool, hoping to sell it to Google for $50 million. "Before," he laments, "you needed a VC. Now you can build a Linux-based data system for $100,000 and survive long enough to sell without ever raising a venture round."

Umm, which company is running a beta version of a "highly specialized online advertising tool" at the moment? Is it just me, or am I seeing a Google future for Chitika!

Blog Advertising Totters Forward

Blog advertising seems to be taking some more tottering steps towards hitting the main stream with this positive write up in the New York Times about the Up Your Budget treasure hunt campaign. The throng of advertisers now willing to chance their arm within the world of blogs seems to be growing and for interesting reasons. As Scott Deaver executive vice president of Budget (a car hire company) says "I've got to be smart and make my brand feel smart to the consumer. I can't just out spend Hertz," Mr. Deaver added, "but I can outsmart them."

For me this speaks volumes for how innovation is often born out of adversity, and that may well be the driving force behind the growing flirtation with blog advertising.

Also something that was of great interest in the New York Times article was how certain blogs were selected for advertising the Up Your Budget campaign. Jay Arnold, president and chief executive at the Impax Marketing Group in Philadelphia who coordinated the Budget marketing strategy outlined the process:

"With the help of a consultant, B. L. Ochman, using criteria like how frequently a blog is updated and how interesting they are to the so-called technorati. In fact, Mr. Arnold said, the tracking service technorati.com was used to help pick the blogs."

Whilst I think Technorati is an excellent tool on a number of fronts, it is a little hard for me to accept that it will continue to be a benchmark for selecting blogs in future ad campaigns. What is really needed is a comprehensive database of blog traffic statistics. I suspect that this need will become more acute as every week passes.

(Via Adpulp)

Yahoo Publisher Going Direct Deposit

Looks like Yahoo Publisher is following the lead of Google AdSense by adding a direct deposit feature. More on Jensense.

Booming Internet Ad Revenues

According to the Interactive Advertising Bureau internet advertising revenues for publishers have risen to new dizzy heights exceeding $3 billion for the third quarter. Full story at ClickZ Total annual revenues for 2005 could beat $12 billion compared to last years figure of $9.6 billion.

UpYour Budget Delivers Value For Money

When Budget the car rental company began their Up Your Budget campaign there must have been a sense of trepidation. But the whole venture which centred around a "Charlie and the Choclate Factory" style treasure hunt has turned out to be an unqualified success. Most of the promotion was done through the BlogAds Network and according to Media Post - Scott Deaver, Budget's chief marketing officer, said "the entire contest and promotion including the $160,000 in prize money cost less than a single 30-second spot on a highly rated TV show."

Here are BlogAds metrics:

• 19.9 million impressions on 125 blogs
• 56,446 clicks at cost of 25 cents per click

In terms of exposure this is a phenomenal return on investment.

A Click To Call Future For Ads

Ads On Blogs discussed Pay Per Call Advertising some months ago, which was a technology being developed by America Online along with other partners including Ingenio and backed by eBay and Microsoft - to transform ad clicks into a direct telephone call.

It now seems Google has taken the bull by the horns and done a limited release to some parts of the USA of a very similar technology. Who said Google was innovative? Google explain how it works:

"Here’s how it works: When you click the phone icon, you can enter your phone number. Once you click ‘Connect For Free,’ Google calls the number you provided. When you pick up, you hear ringing on the other end as Google connects you to the other party. Then, chat away on our dime." (For full details)

Expect to see this appearing on blogs sometime soon!

(Via Problogger)

Could Ads On Blogs Be Growing Up?

Steve Rubel theorises on the rise of blog advertising in his post "As Portal Inventory Dwindles, Will Ads on Blogs Rise" . He makes a good point - with portal inventory booked for months ahead surely it's time for some big bucks ad dollars to find their way into the cream of the blogosphere. Certainly, Steve points to some tantalising evidence on TechWeb that "Advertising executives see blogs, podcasts and web-enabled cellular phones as newcomers in the market that are worth watching, but have yet to prove they're worth as major investments, a survey released Tuesday showed."

My heart tells me that blog advertising maybe approaching an important cross roads, going from an unruly teenager if you like, to a fully paid up adult of media society. But my head tells me that the cross roads is being called too early, as is alluded to in the "worth watching, but yet to prove worth" bit of the above statement. Almost in paralell to some of my statements about where "blogging in general currently sits" in my post The Wider Implications of Business Blog Survey my belief is that blog advertising proper has some growing up to do on a number of fronts.

I'm not being a stick in the mud for saying this - it's what I think is an objective assessment, based on recent experiences in the advertising agency environment. However, what I ultimately believe this boils down to is a question of time and acceptance into the mainstream. How long will that take is an interesting question? I think we have already seen tentative toes dipped into the water and that will probably be the form for another six months to year. In terms of when we might see consistent multi million dollar ad inventory commitments I think we're potentially looking at 18 months - 2 years. But who really knows!

The Curiosity of Chitika

Again there is more news on Chitika's development of the eMiniMalls program. On the Chitika Blog they released the following statement outlining their intentions to remove product links:

"To help minimize so-called “curiosity clicks” that typically do not lead to conversions on the merchants’ side, we updated the eMiniMalls units to drive qualified clicks. Hence, eMiniMalls users will notice a dip in the overall click through rate (and hence the overall revenue). "

In a rather shrewd move Chitika will be "providing a 10% bonus through November as a compensatory measure."

I must admit that when I heard this, it immediately struck a chord. Why? Well, the first thing I did when I saw eMiniMalls on other sites was investigate, - probably on several occasions. I suspect many others did the same.

So now the Chitika buzz maybe dying down, what lays ahead for eMiniMalls? Personally I still like them, they are original and offer some nice functionality that other Ad Programs don't. However, I think there is a reality setting in - eMiniMalls in their current form work at their best on product related blogs. This is likely to become more apparent as the curiosity factor wears off.

The Wider Implications of Business Blog Survey

Interesting piece of research (via iMediaConnection) from Dallas Chapter of the International of Business Communications (IABC) which found "that blogging is a well known communications tool but is not yet mainstream." According to the research - 34 percent of respondents said "blogging is something they or their company do as part of their communications efforts."

Personally I see this as a barometer of wider blog acceptance and the inherent implications for blog advertising. For all the prevarications of exponential blog growth, I think we all need to pour a dose of cold water over ourselves and put some perspective on where blogging actually sits at the moment. Some interesting figures on ClickZ indicate that there may be only about 10,000 regular bloggers (by regular I mean posting daily) out there. A tiny number really, even if you use ClickZ's comparison of up to 40,000 full time journalists in the US - which is a little like comparing apples with oranges in my view. Various projections say this will hit 75,000 -100,000 within the next couple of years. Various surveys (See our previous post - Blog Boom or Bust) have also indicated that the average person on the street really hasn't a clue what a blog is let alone something like a podcast. So is it all doom and gloom?

Far from it in my opinion. Don't get me wrong, you won't find a bigger blog protagonist than me. It's just that I think we need to put in perspective how fast blogging is infiltrating the consciousness of the mainstream, and that afterall should be the benchmark of it's success. Yes there is continued rapid growth in blogging ahead. Yes blog advertising will continue to play an important part in monetizing. Yes there is a similar buzz and excitement surrounding blogging and other Web 2.0 social media(Web 2.0 definiton) that existed in the early days of the internet boom of the late nineties. There is even venture capital beginning to flow. But if we have learnt any lessons from the first incarnation of web technology, it was that there is always a people lag. i.e a time lapse between tech enthusiasts, venture capital funding and adoption by the wider population. How quickly will the time lag be with blogging and other web 2.0 Media? Personally, I think it could be anything upwards of two years and that may be optimistic.

I'd be interested in hearing what you think on this topic?

12% Of A-List Blogs Advertise In Their Feeds

I am a little ambivalent as to the potential of feed advertising. Part of me says it's a great idea and that your monetizing bits of you're content which may have previously been off limits. On the other hand I am finding increasing irritation at finding ads in my feeds and can't really pinpoint why. I guess it's because when you're scanning a gazillion feeds, things that get in the way can act like small, but irritating parasites that you just want to swat out of the way. Certainly some of the reports coming back from many bloggers are less than exciting about it's revenue potential.

However, like most things I guess it's a numbers game. 200,000 subscriptions to your feed and it's not going to be a waste of time incorporating them, particularly as some RSS Ad Programs will be CPM (Cost Per Thousand Impressions). The irritant factor probably becomes less significant if the quality of a subscriptions content is worth it. A more marginal feed and it probably makes me a little trigger happy on the delete button, when I undertake my monthly cull. This is a quandary that bloggers all over the world will be weighing up and experimenting with. Particularly in light of the recent release of Feedster with full automation of their RSS ads program, and also Feedburner announcing that they will launch their own RSS ad network.

Anyway in light of the above Ads On Blogs have analysed the number of A-list blogs currently utilising RSS advertising and can confirm that only 12.2% are participating. By A-list I am referring to the Ads On Blogs 500 analysis of the Feedster 500.

As this is a developing strand in contextual advertising this figure may not be terribly significant, plus you've also got to allow for the fact that Google and Yahoo's offerings are still in beta. However, I can't help feeling that RSS advertising should have taken greater strides forward by now.

Tags: rss, advertising, blogs, feeds, Syndication,

AdSense Pricing For The Smart

I was looking for some elaboration on Googles smart pricing system for AdSense and found this great post on Jensense where else!

For those of you who don't know about smart pricing here is her summarised explanation:

"Google's smart pricing feature automatically adjusts the cost of a keyword-targeted content click. So if our data shows that a click from a content page is less likely to turn into actionable business results - such as online sales, registrations, phone calls, or newsletter signups - we reduce the price you pay for that click.

And this often used example explains how this works more precisely.

As an example of smart pricing, consider two websites, each related to digital photography. The first page features digital camera reviews, while the second offers photography tips. Clicks from the page of photography tips might be charged less, because they are expected to convert into sales less frequently, resulting in lower value for advertisers. Google data determines that clicks from the digital camera reviews convert better, so clicks from this page are not discounted."

Rumours abound regarding the functionality of smart pricing. Jensense gives some credence to the following:

1. Smart pricing can affect an entire account not just individual pages.

2. One poorly converting site can affect others even if they are unrelated.

3. Smart pricing is evaluated weekly so removing ads from a site that's not converting could result in an evaluation of your smart pricing to a higher level within a week.

4. AdSense track with a 30 day cookie so a higher proportion of converted clicks can see you rewarded 29 days later.

5. Smart pricing can also affect image ads.

How To Make Podcasts Pay

I read a few months ago that Jason Calacanis was looking closely at making the Podcast business model work, so it was quite interesting to learn via Problogger that he has been captured on a video clip recorded by JD Lasica from Engadget talking about six different podcasting models. It contains some fascinating insights.

Podcast Growth Going Exponential

An interesting study by Bridge Ratings indicates that the number of people who downloaded a podcast has risen from 820,000 in 2004 to 4.8 million people in 2005. Projections of audience growth by 2010 is expected to reach 45 million users. More optimistic estimates approach the 70 million mark.

In my opinion the viability of podcast business models is still a few years away from being sustainable based on figures like this. I look forward to being proved wrong!