We have been posting a recent theme here about monetizing blogs and how to make money with blogs and blogging.  We have ourselves jumped into marketing and advertising on this blog with ads.  For the average blogger off the street, it is difficult to understand the math associated with the various models of payments, be it “pay per click” or “cost per page views” or the many other models available.

Tom Hespos takes a look today at the math behind the direct response model of advertising and earnings and he had me hooked with his opening line:

“Take it from a media buyer. The blogosphere will not be able to sustain itself on the direct response “buy my crap” model that large sites use to cover their costs. Let’s do the math, shall we?”

Being a professional blogger and a person that derives income from my blogs I was immediately interested in why Tom felt my business model was headed for the drawing board.  As he runs through the numbers, I find myself nodding in agreement with the formula and his reasoning.  Then he hits me with the reality of my situation:

“AdSense and other pay-per-click programs that cater to direct response advertisers tend to pay for beer money to all but the biggest bloggers.”

Actually I don’t drink that much beer, and although I am not what he considers a big blogger, I think I get the gist of his statement.  Unless you are one of the A-list bloggers, you are merely wasting your time if you want to have any return on your blogging investment. The investment of time, effort, and perhaps a little money. What Tom does offer is a solution:

“If you do the math, it becomes obvious that in order to support itself, the blogosphere needs to sell itself not on response-generating ability, but on something else.”

“To me, that “something else” is audience engagement. And not the audience engagement the advertising community has been struggling to define.”

Thanks for the wake up call and your shot at a solution Tom. 

When I speak to client’s, they always want to learn about “Return On Investment” or ROI.  They want to know how many eyeballs they get and how much it will cost to get their campaign noticed using the blogosphere.  They don’t seem to understand the conversation that takes place in a blog model.  Hespos is discussing exactly that model.  The PPC model will soon run its effectiveness and with everyone on the planet with a blog, real estate will be easy to acquire. 

What companies need to focus on in their campaigns are the “egagement” of their potential customer’s attention.  Once you have the attention of the customer, the ROI takes care of itself.  If everyone in the room is engaged in a discussion about your product, chances are you will have an easy sell and hence your return.  Now as a company how do I get them to talk about my product?  My obvious answer is to bring the conversation to them and allow them to engage and discuss your product or service.

I agree with Tom that their will need to be some changes in the way companies are using online marketing in their advertising campaigns.  The person that comes up with the best and most inspring model that can show some ROI will be the person out front.  For now, blogging is nothing but math to the companies writing those online marketing checks. They want the hard numbers and a bottom line.  Perhaps, as Tom suggests, we can influence the way they do business.

I’m not quite ready to give up my beer money just yet Tom, but you are on to something.

 

One of the benefits of contributing to Business Blog Consulting is the opportunity to tap into the expertise of some of the best and brightest bloggers. The lively discussions that occur “off-blog”, on the contributing bloggers’ Yahoo list, are often as valuable as the BBC blog posts. With the permission of Rick, Dana, Jeremy and Dave here is a recap of a recent thread on monitzing blogs.
The Question

What kind of revenue return can one expect from a blog that gets an average of 12k unique visitors a day and whose readers are engaged to the extent that some posts pull over 600 comments? The blog focuses on the champion racing horse Barbaro. (Backstory is on Diva Marketing)

As you might expect there were a range of opinions and projections along with specific tactical advice.
Business Blog Consultants’ Responses

Rick Bruner
My $0.02: it’s going to be hard for a consumer blog site to command much over $1 CPM on average (maybe $3, as Dave states, but as I say, not much over). A few reasons: little perceived premium for those audiences. Even if they are focused, they’re not big, so they’re a pain in the ass to buy.

Also, BlogAds creates extra work for advertisers in making them recreate a different type of creative units for a small audience, compared to the leaderboards and skyscrapers and boxes their agency already created for the mass online ad audience, which BlogAds doesn’t support.

The biggest reason, however, most bloggers can’t make decent money from ads is this: they don’t sell. They expect the mountain to come to Muhammad. Their logic seems to be, “Hey, I spend a lot of hours on this thing, I get a few thousand people, advertisers should do the work to find me and give me money.” That ignores the golden rule: he who has the gold makes the rules. A few thousand visitors a day is small change compared to the big sites dominating the online ad space.

That’s where Tig and Rafat have stood apart. First, they’ve aggregated an audience (B2B) that commands a high CPM ($30+). Second and more importantly, they both personally broke their asses for hours a day actively selling ads, calling agencies, making a real business out of their sites. Now, they’ve both hired ad sales teams.

Dave Taylor
It can be all over the map. Let’s look at AdSense since it’s easy. AdSense effective CPM can range from under $1 to over $10, depending on placement, subject and the click thru rate. If this blog uses a typical placement they’ll see approx 2% CTR (ballpark). Racing will draw some good ads, but much of the gambling is prohibited by AdSense, so let’s just guess that these will be okay value ads and the overall effective CPM with that CTR will be about $3.

Now we can do the math: 12,000 visitors/day = 20,000 page views/day. At a 2% CTR that means that this 20,000 page views account for 400 clicks. If we stick with our resultant effective CPM based on this, that’s really $3 per thousand views, or 20,000/1000 * 3 = $60/day. That’s $0.15/click, not bad for AdSense. Multiply that out and we might be talking about approx $20k/year.

These are all out of thin air, of course. The ads could be more valuable, the CTR could be higher (or quite a bit lower), producing an effective CPM far different than my guess of $3. There are also lots of other advertising alternatives, including BlogAds, etc etc, and
they could just sell their own adverts so they could delve into gambling ads directly, which I imagine would be far more profitable for the site.

Jeremy Wright
Hard to say, BlogAds is its own little economy. We (b5media) have a few similar sites that get 100$/week for a BlogAds ad spot. They’re in the Entertainment space, though.

I’d probably get the blog included in one of the BlogAd Networks, price a unit at 100$/week and then raise it as it starts to fill up. Personally I think a unit’s worth about 250$/week on that site, but it’s always hard to tell with BA’s buyers.

Dana VanDen Heuvel
That would depend a lot on the advertiser and the category…horse racing…not sure what’s out there on that, in terms of advertisers… It’s not like B2B tech where they’re getting $50CPM…at least, not that I know of.

You’d have to find the right category advertisers to make a go at it…or do
Google AdSense.

BBC Readers
What advice would you give?

The “hot news” on the Blogosphere this morning is the interview between Alan Meckler and Jason Calacanis in the Wall Street Journal.  The discussion is geared more towards the individual blogger with the experience Jason has as the CEO of a major blog network.

The discussion (according to tech.memeorandum) is pretty diverse.  A lot of people are focusing in on the “if you hit this traffic level you make good money …” aspect of the article, however I think this is only part of the story.  Jason touches on it with this short comment:

The fact is that the “long tail” of sites is largely unmonetized. Over the next five to 10 years, Google AdSense, Weblogs Inc., Yahoo Publisher Network, AOL’s white-labeled version of AdSense, and Microsoft’s “AdSense killer” will enable the monetization of a lot of those smaller sites.

For businesses blogging, there might not be much, if any, interest in putting ads on their blogs.  However, if you are a small business or a solo pro … earning a little extra cash is a nice bonus.

Looking at the larger picture, though, most of the major ad networks recognize that there are a lot of untapped (un-added?) blogs out there.  Leveraging that potential real estate is going to be the challenge of 2006.

Tags: blog advertising, long tail

 

Preparing a workshop on blogging for people in the meetings and events industry, I went googling for hotel blogs. I found plenty of blog posts about hotel experiences, but not hotel corporate blogs, with one exception, the new blog launched by Starwood Hotels & Resorts Worldwide, TheLobby.com, which is claimed to be the first blog launched by a major hotel company.

Graphically attractive in a fairly understated way, the blog is apparently aimed at ‘Starwood Preferred Guests’ (SPGs), although there is no sign of any section reserved exclusively for that group (not that that would need to be evident to a casual visitor).

Several posts are not much more than chatty plugs for one or other hotel in the Starwood group, which I’m sure could be helpful if, for instance, you were planning a trip to Tirana, the capital of Albania and needed to know which of the two international hotels to stay at if you want wireless internet (it’s the Sheraton) – see post of April 18, and see below why this is not hyperlinked.

The blog is evidently written by a group of travel writers – Marc S., Mark (Editor), Thomas C., Nick L. and Philip S. It seems odd, and frankly I found it irritating, that we are provided with no more identification than first names and some last name initials, especially the lastname initial bit – is there a ‘guess the travel writer’ test here for the designated SPG readership?

Although the April 13 item from which I picked up this story in iMedia Connection  (acknowledging the Wall Street Journal) says there is no provision for commenting, there is in fact a comments function and some posts already have comments. A scan of the disclaimer/warning that sits above the commenting screen suggests that the lawyers have been busy. It’s the most daunting piece of work I’ve seen on a blog comments page to date.

I could not find a permalink function. In what presents as a more traditional website fashion, you can search for archived posts on categories of brand, category (type of hotel), city, or country.

There is a pretty unobtrusive feedback link in the dark gray background area on the right side of the screen. When clicked, this produces a pop-up with a detailed questionnaire that I suspect only dedicated survey-takers will want to stay and complete.

From where I’m viewing it, TheLobby.com is basically a pr blog or even an adverblog, designed to cater to the already converted guests of this group of hotels – and it’s not suggested the publishers are offering anything else, although if the writers were given some more latitude it could no doubt turn into a travel blog with a potentially wider appeal. Calling it a ‘corporate blog’ as iMedia Connection has done, in spite of the fact that the blog doesn’t really speak for the Starwood group as a corporation, raises the question of just what constitutes, or should be recognized as, a corporate blog.

Frontier Airlines recently launched a new ad campaign using a blog.  The blog is at FlipToMexico.com and it seems to be gathering steam with traffic and comments.  The premise is to sign a petition to allow Flip the Frontier Airlines dolphin to get a flight to Mexico, and they have gathered a number of signatures.

This campaign seems to coincide with the Super Bowl, so I would not be surprised to see it come to a final end there.  This is a great example of viral campaigns using blogs.  This blog by Flip, a character blog, is sporadic in its postings, but nonetheless I will be following the feed to see the final ending.  I wonder if this means Frontier is about to join in on the corporate blogging bandwagon?

MarketingVox and Adrants report on yet another dub faux blog. Marketers, please, please get the point: blogs are about building trust, not spinning it.

UPDATE:
MediaPost reports that the blog has packed it in, in ignominy.

MarketingVox: Mazda’s Blog+Viral Campaign Falls Flat

Is it a humorous attempt to turn a weakness into a strength or a shameless promotional gimmick? You decide.

BizNetTravel’s Travel Log is a travel agency blog I help produce with Adrants‘ Steve Hall. We both suck at spelling. So, for the next two months, BizNetTravel is giving away travel guide books to folks who can find spelling errors and other language mistakes in Steve and my posts. Sadly, this applies only to the BizNetTravel’s site, not on our other sites. What do you think we are, made of travel books?

BizNetTravel: Find Spelling Errors, Win a Guide Book

I suppose a site dedicated to business blogs simply has to mention the whole Raging Cow fiasco, since it continues to be touchstone in the minds of many on the whole subject of business blogs. For those of you lucky enough to never have heard of this whole tempest in a milk bottle, the basic background is this:

Dr. Pepper / 7 Up came out with a new flavored milk product called Raging Cow, which it sought to give hip legitimacy to by reaching out to blogs. It did so, via its online marketing agency Richards Interactive, by creating its own blog and by inviting a group of young bloggers to be briefed on the product, whom it encouraged to blog about the product. As best as I can tell, where it fell afoul of the blogosphere was that it then asked those young bloggers not to mention that they had been briefed about the product, as if their sudden new enthusiasm for flavored milk was purely their own idea.

To the company’s credit, Raging Cow’s blog and blog-PR initiative was one of the first efforts by a mainstream company to use blogs for marketing purposes (only a little over a year ago, March 2003; why does it seem like a lifetime ago?). But its PR mistep was badly received by the blogosphere, to say the least. Hardcore bloggers, who apparently wear their underpants a bit too tight, went ballistic at this attempt to corrupt their integrity of blogs, and for weeks, even months, it seemed all you heard on certain blogs was vitriol against Dr. Pepper (notably this silly call for a boycott on the product, as if anyone has actually seen Raging Cow in a store).

What irritates me about this whole episode is that it has become the embodiment in the minds of many of the idea that blogs and marketing don’t mix. The problem, if it even was a problem (Richards Interactive never saw it that way; see below), however, was never Raging Cow’s blog itself, which actually wasn’t bad, as adverblogs go (I would link to it, but I notice just now that the site seems to be defunct, which I strongly suspect has much less to do with a boycott among obsessive bloggers than the fact that sugary milk can’t compete with sugary fizzy water among teen tastes). [UPDATE: I guess it was just down when I checked it when I first wrote this post. I now see it’s back, though it’s not apparent that the blog is still being updated.] The problem was bad PR: imagine asking a reporter for the NY Times or even a lowly trade magazine to write nice things about your product but not to mention that you had briefed them.

Anyway, in an effort to get the complete story on the episode, I asked journalist Kate Kaye last year to interview the folks at Richards Interactive for their side of the story, as part of our report Business Blogs: How Successful Companies Get Real Results With Weblogs. (Kate, incidentally, maintains a site called Lowbrow Lowdown, which although quite blog-like she proudly proclaims has been “blog-free since 2000,” which I gather means only that she codes the whole thing by hand and archives it via FTP for God knows what reason.)

So here for posterity, excerpted from our 2003 report, is the email interview she conducted with Todd Copilevitz, Director of Richards Interactive about the Raging Cow Blog Campaign:

When did the Raging Cow campaign launch?

The buzz campaign, which included the blogger elements started March 1 [2003]. The branded campaign launched with five markets March 15.

What was the objective of the RC campaign, specifically the blog component?

We were working with a product that had a short window for launch, and limited distribution initially. So we had to develop a strategy that increased awareness in key markets and seeded awareness in markets where we did not have distribution. To our advantage we had a strong defined character in the raging cow. As we started working on telling the cow’s story it became very obvious there was something compelling about the humor.

At the same time we did not want to try to force our way in front of teens with a typical advertising message. We know they are far more likely to respond to a message that offers some recognition of their habits and is willing to entertain. So our blog component was simply intended to make people aware of the cow — not even to mention the product. If teens recognized the cow when they saw the product or branded advertising that was all we could hope for.

The branded campaign, and the branded web site, had the broader responsibility of raising awareness of the product and increasing attendance at sampling events. At the same time the wild postings of posters on the streets were tasked with increasing sampling attendance and driving people to the web. In short, all the pieces were intertwined.

Is there a blogging software platform used to run the RC blog? If so, which one?

We licensed Moveable Type. A great product from people who know their stuff, and an amazing community of developers creating add-ins. And, yes, we paid the license fee.

Did the campaign involve any other components (ads or marketing strategies)?

Spot radio, sampling teams, street posters and extensive online advertising using page-crossing units and other large-format ads.

What did the advertiser and agency hope to or expect to achieve through the blog?

Beyond what I said earlier, we believed the blog network offered a unique and organic opportunity let teens tell other teens about the product. Of course we realized that was fraught with risk, since we had no control over the message. But to its credit, DPSU was willing to accept that.

Describe how the campaign was received, particularly by the blogging community. What about it was praised, what was panned?

Among the target audience we had incredible response. We had numerous links to the site with extensive tracking. A brand tracking study tells us that we moved the needle in every critical factor, all positively.

There was another community of bloggers who blew their lid at our presence. They flooded us with complaints, all of which accused DPSU of being deceitful with the blog effort. Ironically there was a DPSU copyright on site. The article in Newsweek was the result of a call from DPSU. So I don’t know how we could be accused of trying to hide our hand. Of even more interest, was the forum for many of the complaints, our site. DPSU said early on that it wanted a broad and deep dialogue on the Raging Cow site, so long as it stayed on target and wasn’t obscene. I found it particularly interesting that a great many of the bloggers venting on our site don’t even offer comment capability on their site.

How has the RC blog changed since its controversial beginnings?

I’d suggest the only controversy was among those who were never our target to begin with. But along the way we eliminated links to external blog sites. In part we did so because we did not have the time to monitor all of them for inappropriate content and didn’t want our link to suggest an endorsement. That became an issue once the number of sites requesting links got unmanageable.

What’s planned for the future of the RC blog? How long will it run?

The blog tells the story of the cow’s shift from placid dairy life to a crusader against boring milk. As such it will live on through the site. While we won’t be updating it as regularly as we did in the spring, it remains a viable channel for communication.

Does Richards Interactive or Dr Pepper plan to use blogs in the future for marketing purposes? If so, would the approach be different? In what way?

I won’t attempt to answer for DPSU, except to note that they have expressed an ongoing interest in the value of grassroots communication tools. Richards Interactive was working with blogs before this and has done so repeatedly since then. We have an active database of hundreds of bloggers of all ages across the country who want to be part of marketing efforts. (You can checkout the signup information at www.projectblog.com.) As for approach, it is always different. You cannot cookie-cutter this type of communication.

In terms of using blogs for business, specifically marketing purposes, what are the challenges or drawbacks from your perspective?

Blogs offer one of the most-effective ways for small companies and companies with a defined point of view to communicate that directly with audiences. Blogs rejuvenate some of the early promises of the Internet, namely a global platform for anyone with something to say and the means to articulate it.

ClickZ’s comely columnist Tessa Wegert has written a three-part series on blogs and marketing (Part 1, Part 2 and Part 3). I might nitpick with some of its points — e.g., “At minimum, blogs should be updated daily” (ideally, perhaps, but I don’t know about “at minimum”; this blog, for example, flunks that test miserably of late), the idea that a blog isn’t a blog if it doesn’t have comments turned on (so Instapundit isn’t a blog?), or the tired old saw of spotlighting Raging Cow as a blog marketing disaster) — but by and large, it’s a sensible advice piece well worth a read.

ClickZ: Ads on Blogs, Blogs as Ads

I would have to say this is one of the most innovative blog projects I’ve seen in a while. The site explains its mission thusly:

For Art of Speed, Nike commissioned 15 talented young filmmakers to interpret the idea of speed. Over the course of 20 days, this weblog will introduce these innovative directors, their short films, and the digital technology behind the scenes.

Combining two of my favorite trends: advertainment (advermovies, in this case) and business blogging. What else can I say?

Hardly surprising that the creative engine behind this project is Nick Denton‘s Gawker Media. On Nick’s personal site, he writes a more detailed and thoughtful explanation of what the new site is about and the future of this kind of “campaign blog,” which he likens, appropriately, I believe, to a magazine’s “special advertising section”:

Gawker has produced an Art of Speed weblog, consisting of items about the films, their makers, and digital filmmaking in general. The microsite is at www.gawker.com/artofspeed. It’s a month-long temporary weblog, written by Remy Stern of newyorkish.com, and designed by Patric King of House of Pretty.
…
In principle, campaign weblogs allow a marketer to participate in the weblog conversation, rather than observe it as a passive sponsor. Now we’ll just have to see whether they work.

There is a lot more to his post than what I’ve quoted here, but rather than just reprinting the whole thing, I’d encourage you to read it for yourself. There is no doubt this is a seminal event in the development of business blogs. The NYT also reports on this project.

Link

You can’t get a lot more CPG than milk. Well going hog wild, as it were, this environmentally conscious organic dairy has no less than five “Blog ‘Cow’munities!” (their pathetic joke, not mine):

• Strong Women Daily News
  The latest news and insights from our Strong Women partners

• The Bovine Bugle
  Daily moos from the Howmars Organic Dairy Farm

• The Dairy Planet
  Daily ways we try to nurture and sustain the environment

• The Daily Scoop
  Moos from inside the Yogurt Works

• Creating Healthy Kids
  Daily updates from our Menu for Change healthy food in schools program

UPDATE: On June 7, the company put out this press release, calling attention to their blog initiative, quoting yours truly as an expert in the space.

Link

Chris King, touring the US
in a Jones RV

Very cool series of blogs by a very cool company. Jones Soda is a quirky softdrink brand playing David to Goliath like Coke and Pepsi. The web site has a lot going on, but blogs are one more way they keep it fun, having Gen Y skateboarders, BMXers and other hip cats writing the blogs.

Link

German fashion label Inscene has drafted young people in several cities around the world — including Tokyo, New York, London and Berlin — to maintain weblogs as cultural embassadors for the brand.

Link

One of the cleverest business blogs I’ve ever seen. From the innovative ad agency Wieden + Kennedy, this blog purported to be written by a beta tester of the ESPN NFL computer game, from Sega. The alleged beta tester is supposedly so disturbed by how violent the game is that starts experiencing blackouts during which he tackles his colleagues at work, trashes his own apartment, etc. An intense conspiratorial tone, video clips from surveillance cameras, unauthorized interviews with product managers, hacked rejected clips from TV ads for the product and the like all won the site a large following, most of whom didn’t realize the site was a hoax. The blog ended abruptly with Beta 7’s mysterious disappearance, coinciding with the launch of the game. A great example of an adverblog.

Link