Distributed Content Blog Advertising Model

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?

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"

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What's been said:

Discussions found on the web:
  1. dblwyo commented on Oct 9

    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.

  2. jeff commented on Oct 9

    The reason blogs are the very best source for information is they tell it like it is. They tell you the truth of the matter and talk about real issues that people care about. Instead of the top story being what Paris ate for dinner last night. The news is so corprate owned and in many respects goverment swayed regarding what they can tell you. They do not want the people to know the truth of what really is going on! They would rather keep the masses dumbed down and talk about celebritys. I have learned more about the truth from blogs then I would have ever ever learned from the TV news. So I fully understand why people are avoiding the msn, cnn, fox,cbs ect.
    Thank god for the Internet!

  3. Ross commented on Oct 9

    In an effort to take this conversation to a lower level, I would say that blogs have become successful simply because a growing portion of the population are tired and upset at being target marketed. As an excercise ‘probabily futile’ I receive tons of credit card offers which include postage paid return envelopes. A few years ago I decided to be polite and answer with a ‘no thanks’ written on a piece of their offer, seal it and post it back to them. I figure that if they are forced to pay 41 cents to get a negative reply, perhaps I would be blacklisted…. It hasn’t worked so far but who knows, it might catch on.

  4. im1dc commented on Oct 9

    It doesn’t matter what the lizard brains do they’re already dead and buried dinosaurs but don’t know it.

    IMO, to followup Ross’s observation that people are fed up being “target marketed”, if big media had taken your suggestion they would have killed it off with lizard brain implementation.

    It is best to just allow those old organizations to die.

    I simply migrated away from them and I bet many milions more have done exactly the same thing.

    On the positive side, the NYTimes recently learned their lesson and has once again made their content available to everyone free Online. That’s the only way they can stay relevant in this Online age.

  5. 12th percentile commented on Oct 9

    I only worked in an ad agency for 2 years but you can’t imagine how much amusement this gave me

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

    Now, let’s talk about those TV spots….

    The major agencies have no clue about the internet. In my area of search engine optimization they are still basically defrauding people. Saying they are providing SEO and then just buying Google ads. The way they present the data to their clients is laughable. I had a woman come to work for me from one of the big name agencies. She said something along the lines of “you don’t understand, they have no clue about how to do what you are doing”.

    Here is my hunch about why they are no good at it. And why they are missing out on new online ad models. And why they will never be good at it. It requires hard work and new ideas. It requires being able to have the design people work and communicate with the copywriters and the clients and the programmers. It requires comprimise between those groups. But mostly its hard work. And I got the sense they weren’t interested in that.

    That said, you may want to consider some SEO yourself. Just don’t go to madison ave for the advice.

  6. matt m. commented on Oct 9


    “they tell it like it is”

    According to the blogger,no?

    I like blogs to hear multiple points of view on many different topics, but I never lose sight of the fact that the blog I am reading is normally an opinion by the blog writer. I don’t think that qualifies the information as “telling it like it is”. It is telling like the blogger thinks it is,or should be.

    This blog is a prime example. Great blog…lots of info and humor, but would you say that most of BR’s posts are written to support his market view…certainly…nothing wrong with that at all…but tough to qualify it as “the truth”….it’s just an opinion by the blogger.

  7. Bob A commented on Oct 9

    “The reason blogs are the very best source for information is they tell it like it is.”

    And the reason they can tell it like it is… they do not have to kowtow to religious, political and other groups who threaten advertisers with product boycots if they advertise on media that doesn’t kiss their asses.

    Their is a lot you can’t say when you’re forced to pander to the lowest common denominator.

  8. Idaho_Spud commented on Oct 9


    What you are witnessing is the same thing that the music distribution industry has had to face: Loss of control of their customers thought and obedience (and more to the point, their money).

    Offhand I’d say that if China, the MSM and the music oligopoly distrust the web and its users (that is to say the public), this is a good thing ;)

  9. The Financial Philosopher commented on Oct 9

    The issue at hand is quite simple: Bloggers risk losing readership when money is introduced to the blog’s objective. If a blogger sets out from the start to “make money” at blogging, at least that’s honest. If a blog is founded on the author’s passion for seeking and sharing information that is useful to its readers, without monetary consideration, an argument could easily be made that introducing competing interests, such as a marketing objective or a corporate puppet master, then the blog (and blogger) has lost it’s way — and everything it was founded upon erodes…

    I certainly do not attract 1 million page views per month but I’ve recently been approached by advertisers and have politely turned them down…

    “If I have even just a little sense, I will walk on the main road and my only fear will be of straying from it.” Lau-tzu

  10. UrbanDigs commented on Oct 9

    I view a blog as a daily journal into the mind of the blogger, so that they have a medium to distribute their thoughts. So yes, blogs are usually biased towards their view, but thats what makes it entertaining.

    Also, blogging helps add transparency to the topic/market at hand as the blogger discusses what is going on RIGHT NOW in their business. That in itself is a valuable insight that is usually hard to come by.

    For NYC real estate, we have quarterly reports. Who the hell cares about what happened 3 months ago, I want to know what is happening NOW so I can advise my clients who are close to buying or selling and waiting for prime environment. Things can always be broken down more efficiently and access to this kind of information is only helpful, when taken in properly by the reader.

  11. UrbanDigs commented on Oct 9

    Financial Philospher – Interesting point. I certainly dont get that traffic either, but do get about 1500 unique visitors a day and about 5,000 page views a day; not bad I would like to think.

    And its because of the content! I too have been approached by about 12 advertisers in the past year or so, and turned them all down.

    But would it be so wrong if I add 1 section for advertisers, that is not obtrusive, if I spend my own money to upgrade the blog to meet the needs of my readers? I dont think that is so bad, as long as it doesn’t come at the expense of the quality of content or tools offered to readers.

  12. michael schumacher commented on Oct 9

    I think that BR writes very little and posts other articles to gauge responses. Take a look at how much of his own verbage accompanies each article….Not a whole lot.

    Nothing wrong with that but some of you are a bit mistaken in thinking that he has “written” alot of these passages.


    BR: Shumie, I gotta disagree — go back and reread the past 4 years posts, and you’ll see what I mean.

    I try to get at least one original post up per day. Some days, its more.

    Even the linkfests have a few 100 words of original content before the links begin.
    The late morning post usually reference someone else’s work, with lots my own commentary attached. Often, the afternoon info-porn/chart/cartoon/excerpt is pure cut & paste. Then the evening commentary (music, film, book) is usually all original.

    I’ll do a post from the NYT op-ed on Supply Side that is cut & paste this afternoon . . . compare that with most TBP posts

  13. Schnauser commented on Oct 9

    MS, you might be technically correct, but that misses the point that TBP’s primary value is that of a filter–the lawyer turned money manager with skin in the game bullshit detector.

  14. Frugal commented on Oct 9


    You have something really good going on here. The power comes from aggregation. You can probably summon a lot more financial/stock bloggers together, and come to the bargain table with a much bigger say, despite the fact that your site has a tremendous amount of traffics already.


  15. UrbanDigs commented on Oct 9

    Frugal – No, dont do that! You’ll lose the personality of the blog, as he is right that you have a good thing going! I hate when a site loses its identity because too many outside bloggers join in for one bigger site. We can just go to that other bloggers site for their content.

    leave it alone, and keep up the original commentary and thoughts!

  16. Christopher Laudani commented on Oct 9


    Convert this site to porn; over a million page views you’ll make a fortune.

    What major advertiser wants to expose their brand to a blog site, where there is little editorial control?

  17. jim commented on Oct 9

    “Why do you care, and what does it matter anyway?”

    this man will probably not be a major advertising executive for too much longer.

  18. donna commented on Oct 9

    Wait, your blog has ads?

    Huh. Never noticed.

    I think people read blogs for content, not ads. I tend to ignore ads just as I skip them with the Tivo.

    And even before Tivo, you could get up to go to the bathroom.I’ve read newspapers and magazines for years now either ignoring or scoffing at the ads.

    Companies need to make good products. They don’t need cute ads. Bloggers need to write good content. They don’t need cute ads.

    As to making money, there’s a lot more to life than money.

    If advertisers want to reach me, they should send me their product. Free. That’s how it used to be done. Give me a sample. If it’s too big a product for that, then it’s probably too big for an ad to sell me on it anyway. I’ll make an informed purchase of larger items on their merit, not based on an ad.

  19. The Financial Philosopher commented on Oct 9


    To answer your question, I would say that “straying from the path” that got you where you are today by selling advertising tomorrow will not guarantee erosion of quality or the destruction of your blog… It only increases the odds…

    The ultimate fate depends upon the degree to which you know yourself and that your actions reflect that knowledge…

    In other words, it is possible, but unlikely, that you will be successful at being something other than you…

  20. Chris commented on Oct 9

    Dude, I think what matters to advertisers is readership rather than browsers. If I were an advertiser, I would want to pay per reader traffic and not through search engine directed traffic.

    Most blog hits are search related which means browsers are looking for key words before reading the content or spending more time on the web page.

    That said, I’d say less than 10% of blog traffic counts.

  21. flory commented on Oct 9

    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.

    Pretty serious generalization here. Many of the bloggers I know — political, not financial — are in their 40s and 50s. I don’t think age has as much to do with it as corporate culture. People in advertising agencies have spent too many years doing things one way to be able to easily shift gears.
    But that could happen to a 30 year old if they started down one path early enough.

  22. Barry Ritholtz commented on Oct 9

    It is a very broad generalization.

    The more significant factor than age is the hat they wear. I’m the Adv. CEO’s age — I don’t have a vested interest in an older or outmoded model — but they do, hence, the fear of the new.

  23. Broker A commented on Oct 10


    You nailed it.

    The field is wide open.

    The answer, of course, is consolidation and make a nice “clean well lit” site.

  24. WorldBeta commented on Oct 11

    Barry, why don’t you start a new aggregator that shares revenues with the bloggers? Make them sign non-competes for other aggregators. . .I would join that.

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