Distributed Content Blog Advertising Model

Tuesday, October 09, 2007 | 07:34 AM

A few people wrote in to ask me about yesterday's Nielsen/Media Matrix rant.

-Some pointed out (privately) the flaws in these systems, noting they have been very error-prone in other media -- radio, television, newspapers -- for years.

-A few told me I was wildly wrong, and this is just a standard measuring approach. (I don't buy that, as its easy enough to measure EXACTLY how many ads are actually served or clicked on. The aggregation/assignment approach, is a recipe for inaccuracy and abuse).   

-Several media people told me that the anarchy of the blogosphere terrifies the MSM, and this was an attempt to make it more acceptable (a "clean well lit place" one wrote).

-A major advertising executive asked a question that was most intriguing: "Why do you care, and what does it matter anyway?"

That's a thought provoking question, worthy of an answer. Here's mine:

There is little doubt that Blogging is changing how people get information, analysis and opinion. Major Media has recognized that there is a certain aggregation of readers, many of whom are not represented in the MSM readership. This means their advertisers are not reaching these consumers.

Based in part on this, I made a proposal to a large media firm over the summer, describing what I saw as an opportunity to create a new advertising structure for a large magazine or newspaper.

As my traffic has ramped up to ~million page views per month, I decided to accept advertising and/or sponsorship. I checked out the largest/best known blog advertising groups -- Federated Media, Blogads, Adsense, etc. -- and I was astonished at what I saw. Google Adsense pays surprisingly little (expect to see it pulled from here soon).

The entire space was wide open, with a handful of players in various states, from startup to fairly evolved. Many of the players are poorly organized, underfunded. They are trying to build from the ground up the structures that already exist in the advertising universe -- only without the experience, capital and expertise needed to perform adequately. Even the best indie ad firms had abysmal customer service -- at least from the blogger perspective.

Now, these are only anecdotal observations, and your mileage may vary. I am sure some of these firms are better organized/structured/executed than others. I have spoken to many of the bloggers in the market/economy/investing space over the past few months. Many people had similar experiences to mine. The consensus was that there is no particular model that serves this community well.

Collectively, the top half of this group has over unique 10 million visitors and 15 million page views per month. By way of comparison, AOL paid $25m to purchase Weblogs network of 85 blogs with far less traffic. And when DJ bought Marketwatch for $520M, they had 5.8 million unique monthly visitors.

Do the math: Considering those numbers, its not too hard to envision a similar monthly viewership as either of those deals, at essentially little or no cost: Serve your ads on these blogs, and split the revenues with the bloggers.

Considering the $20 billion dollars that the online advertising industry generates, this techcrunch piece makes some sense:  New Study: Top 50k blogs had $500 million in 2006 Revenue.  I think their numbers might be off a bit, but the concept is correct.       

But rather than reinvent the wheel, what made sense to me was to offer the vertical financial blogging community the ability to partner with a major media firm with the infrastructure and expertise in the financial/economic/stock area. I have some personal opinions as to which specific media outlets were the strongest candidate. The goal would be to serve advertising on financially related blogs from relevant clients in the [media name redacted] universe, sharing the revenue between XXXXX and the bloggers. The blogger's half would then be apportioned based on traffic and click-throughs. There are other elements that could be explored further:  e.g., making certain XXXXXX material available to these bloggers, additional promotional material, etc. There' a lot more here, but let's save that for later.

From the bloggers perspective, they get to monetize their content with high quality advertisers that are relevant to the subject matter they are discussing. From XXXXXX's perspective, you get to further monetize an existing relationship, provide advertisers access to high quality blogs, and further expand XXXXXX into the online universe.   

~~~

The XXXXXX editor I pitched the blog advertising concept to bumped me up the ladder to the head of advertising and business development. We had a conference call -- which the originally scheduled Biz Dev person couldn't make it last minute.

As to the blog advertising, they were -- I guess "intrigued" is the right word -- about the concept. Interested, but they still are VERY uncomfortable with the anarchy of the blogosphere.

In the process of these discussions, one party related a conversation with the president of XXXXX, a large advertising firm. Long-story short, what they really liked was the Huffington blog concept (another “clean well lit place”)

Oh, you mean magazines? That is an “easily-understood-by-old-media concept.” 

I asked how old was this CEO -- 42? 45?
Answer:  early 40s, why?

Because they are simply too old to not be scared witless by the web -- so their comfort level is the internet equivalent of an on-line magazine.

One editor in the tech media area had a forecast that was prescient. He warned of the dynamic between print and online, between advertising and content that was, call it dysfunctional. Across many different media brands, there seem to be some turf wars, with no one really talking to anyone else --unless they were forced to by the corporate parent.  On a certain level, their frontal lobes get it, but their lizard brains have them paralyzed with fear. That model might happen in 5 years if we are lucky -- unless someone forces them their first. 

Suffice it to say, a distributed content advertising model didn’t exactly give them warm fuzzies. They suggested a blog ghetto ("I'm just spit-balling here"), not unlike the Reuters proposal. Their XXXX.NET, was where select bloggers could publish with the XXXXX seal of approval.

We are "keeping an open dialogue"

Tuesday, October 09, 2007 | 07:34 AM | Permalink | Comments (24) | TrackBack (0)
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At the end of the day media is about creating content, distributing it to a target audience and finding some way to get paid enough to make a profit on the expense of creation and distribution. What's going on now is the same process of re-thinking a business when the technology behind a particular distribution model changes. In this case from mass, homogenized and quasi-local to niche, heterogeneous and potentially x-linked across geographies. Think about what happened when the rails reached all the small towns - Sears became the retailer of choice. You have to run that model in reverse here though.

Consider the media in whatever form as the structurers of content - the reason I read the WSJ is I can't afford the resources to gather all that data and turn it into info; nor can I even sort out all the info available to me. The purpose of editing is to filter and structure the info flow - a service which has value as well.
Well competent and knowledgeable bloggers are showing that deep knowledge of a domain beyond a journalism background combined with some writing skills offers up real value. Yet the blogosphere is also self-organizing - think about all the graphs and charts you've posted showing how an ecological structure has evolved driven by the need to ration time and looking for a readers return for spending it.

As an example of the best aggregation I'm aware of consider ARts & Letters Daily: http://www.aldaily.com/ . Now if a bloggregator could provide a service with that kind of structure that combined the blog world (which isn't that unstructured) with the machinery of traditional media and advertising and added on structured info access you'd have something.
In other worlds it's called market planning & analysis and product design & development. Birds do it, bees do it (think evolution), Pfizer did it, Boeing does it, Intel too.
At the absolute minimum these guys need to be exploring and investigating to find out what works or go the way of the Dodo.

Posted by: dblwyo | Oct 9, 2007 8:47:09 AM

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