PQ Media expects blog advertising to rise from an estimated $16.6 million in 2006 to over $300 million by 2010. FeedBurner data indicates that trend is already in motion, with its own blog advertising inventory up 300% in the past three months alone. And with politics being a popular category for blog content and readership, the 2008 U.S. elections stand to bring blog advertising into sharp focus. A recent Wall Street Journal article suggests that online campaign spending stands to rise from $29 million in 2004 to over $80 million in the ’08 elections — and many of those dollars are headed straight for the political blogs.

What Makes a Blog a Blog?

Before we look at the blog advertising opportunity for marketers, let’s start with a few definitions, and compare the typical blog to a traditional online media site (if we can use “traditional” in a discussion of online media, an industry that’s only existed for 10-12 years).

While most blogs are easy to spot, as commercial publishers (e.g., newspapers) enter the category with their own blog offerings, the lines between a blog and non-blog are sometimes blurry. Two features differentiate a blog from another site format. First, the page is organized around a series of individual posts, each one wholly contained on a single page and organized in reverse chronological order. Secondly, blogs invite user participation and feedback via comments. Blogs have ushered in the “read / write” era of web content.

Blog Tools and Platforms

The number of blogs will continue to grow rapidly, as there are several platforms that are introducing more people to this type of site format, and making it very easy for individuals to create and manage a blog. In the early days of blogging, standalone software from Blogger, Six Apart, and WordPress allowed users to create nice looking blogs right out of the box. The next generation of blogs has been driven by the portals, as AOL (Journals), Microsoft (Spaces), Yahoo! (Yahoo! 360), Google, and MySpace all offer turnkey blogging platforms.

Blog Networks

Over the past two years, companies have been formed to aggregate blogs into networks of properties.

Most bloggers do not attract a large enough audience to attract advertisers on their own accord — nor do they have the resources (namely, people and/or money) to build an ad-supported business. But when combined with other similar blogs, the network starts to have appeal to an advertiser. Third-party ad networks such as Burst Media and Tribal Fusion offer the same aggregation for a large number of web sites. Most digital media planners are responsible for deploying sizable online advertising budgets for their clients, and don’t have time to identify and negotiate ad opportunities with a long list of individual blogs. So the network operators are helping to jumpstart the blog advertising category by creating a more efficient marketplace.

Evolution of Blog Advertising

But is blog advertising ready for prime time? In the early days, most bloggers tried to earn money from their publishing efforts by adding paid search to their sites. As some sites began to rise in popularity, they were able to attract advertisers willing to pay on a cost-per-thousand (CPM) model for access to their audience, and display ads made their way to the blogs — let’s call that the “2.0″ era of blog advertising. But do the existing ad units and locations really take advantage of the site format and viewing patterns on blogs? Do we really understand these audiences, and are we providing advertisers with innovations around media alternatives, sponsorships, targeting, and contextual matching?

We expect to see several developments in 2007, all of which will create additional marketing opportunities for advertisers and attract more spending to this category of content.

Advertising Zones

One key difference between a blog and a typical page of content is the length of the homepage.

Most pageviews for a media site contain little more than one screenful of content. Users may scroll down below the fold to finish a story, but rarely does a user advance through two full screens of content. The typical blog, meanwhile, contains posts on the homepage that allow a user to scroll through multiple screenfuls of content.

The ad zones — the locations where ads are positioned on the page relevant to the content – on most blogs have not evolved to take advantage of the new readership pattern that’s emerged. To their credit, when ad zones were first created on the popular blogs, the ad units were often IAB-standard. This helps attract advertisers to this new category of content. At the same time, the ad zones reflect the site design and readership pattern of non-blog pageviews. Many blogs offer a banner or leaderboard across the top, and one or more vertical ads — like a skyscraper — on the left or right rail. Scroll down past the first post, and you will rarely encounter an ad…you’ve entered content utopia, an ad-free land of blog content with little or no adjacent advertising.

However, as the quantity of WOM campaigns on the traditional web moves towards saturation, marketers will need to look towards emerging platforms such as blogs and feeds to capture their audience’s attention.

The Word of Mouth Marketing Association, the official not-for-profit trade association for word-of-mouth marketers, defines word of mouth as “the act of consumers providing information to other consumers,” and word of mouth marketing as “giving people a reason to talk about your products and services, making it easier for that conversation to take place.”

WOM marketers usually begin by identifying the people that are most likely to talk about a product or service — the influencers — and making them aware of new features, benefits, or selling points. If successful, this “seeding” effort initiates a viral marketing phase, in which the influencers share their opinions and experiences with others.

Interactive marketing has created new tools for WOM marketers to engage the influencers, in two distinct ways. First, online media has allowed marketers to create multimedia content designed specifically for digital distribution such as blogs, video clips, audio podcasts, and desktop widgets. Second, digital distribution allows influencers to inform others without physical contact.

Rather than relying on a physical setting, such as an event sponsorship or a trade show, the digital environment increases both the pace at which WOM spreads, and the number of potential influences by a single individual. If a person finds the Spiderman desktop widget to be interesting and fun, it can be forwarded to that individual’s friends and colleagues in seconds. Or if an individual finds a YouTube video to be particularly interesting, it can be easily embedded on a profile page and viewed by friends and visitors.

But as more marketers take advantage of lower content production costs and cheap digital distribution, they run into another trend — one that marketers have been dealing with for ages. It’s called attention deficit, and as the interactive landscape gets more crowded with WOM initiatives, it will force marketers to think about new ways to engage the influencers in the discovery process, and to retain their interest over time.

If every video component is added to YouTube and other video services, and every audio clip gets added to the iTunes podcast directory and others like it, these services stand to become very crowded. While that’s good for the content aggregators in their quest to attract eyeballs and monetize a large content base, it makes it harder for a WOM marketer to seed a campaign. New initiatives, including support in emerging media, will be required.

Further, if the WOM campaign is episodic in nature, with an advertiser releasing new content over time, then it becomes very desirable to provide tools that help retain the influencers, and their circle of friends, beyond a single interaction. It’s a relatively simple hypothesis — give a brand advertiser multiple opportunities to engage a potential customer, and they’ll favor that every time over a single contact.

Before making their feeds available to subscribers, each company’s marketing team faced a variety of decisions regarding their approach to RSS marketing. In this article, we look at five such issues that you should consider in planning your feed marketing communications.

Deliver Relevant Content By Identifying and Targeting Your Audience

When publishing RSS feeds, as with any other type of marketing communications, market segmentation and targeted messages are essential. Companies with multiple product lines may have many distinct target markets and thus should segregate their feeds accordingly. For example, IBM separates its feeds targeting developers and IT professionals from those that are most relevant to database administrators. Travel Web site Expedia segments its feeds by city of origin to best serve the interests of each segment of its wide subscriber base.

RSS feeds have seen a tremendous growth in popularity, in large part because they empower subscribers to dictate and control the content they receive, as well as the frequency of delivery. In response, many companies are highly segmenting their content to increase its relevance and encourage subscription. For instance, The New York Times delivers feeds from specific sections, such as “Sunday Styles” and “Book Reviews,” to respond to subscribers’ precise areas of interest. Once feed publishers identify and segment their target audiences, they can appropriately tailor their content and make their marketing efforts highly efficient.

Too Much of a Good Thing? Don’t Confuse Your Customer By Offering Too Many Feed Choices

While the breadth of a company’s product line and its market will be the main factor dictating the number of feeds the marketer opts to deliver, there are some other considerations. It’s important for a visitor to be able to easily browse the company’s feed offerings and discriminate among them. Marketers may want to publish a “feed index” page or, like Expedia, a parameter-driven feed selection tool.

Offering too many choices to potential subscribers could work to the marketer’s disadvantage. As subscribers are faced with growing choices from a variety of publishers, they will become increasingly selective about their subscriptions. We recommend that marketers err on the side of having too few feeds until they are able to analyze their feed performance, and that they concentrate on updating those feeds on a regular basis to sustain subscriber interest.

Content Strategy Can Affect Subscription Levels and Loyalty

Feed publishers should consider how much content to include in a given feed post. While most bloggers make the full text of their blog post available in the feed, media companies typically only feed headlines or excerpts. Marketers often face a tradeoff between convenience and the richness of the content.

If the content is composed entirely of text, the marketer could enhance subscription levels by making the full content available in the feed. If, on the other hand, the content does not lend itself to serialized publication, with each post containing new or updated information, then the marketer may choose to make headlines or excerpts available, leading subscribers back to the website.

Feed publishers also face a choice regarding the richness of their posts. While RSS feeds have not yet evolved to include full HTML, there is an opportunity for marketers to incorporate design elements into their feed posts. Zales, for example, regularly embeds photos and graphics to promote its products, as well as direct links to product details on its Web site. As feeds gain in popularity with subscribers, marketers should consider investing production resources in their feed publishing — particularly if statistics reveal that richer posts perform better in terms of clickthroughs or ROI.

As consumer adoption of syndicated content continues to increase, marketers in a variety of industries are making feeds part of their standard marketing communication mix. Many of these companies take widely different approaches to the amount of content included in their feeds, the update frequency, and the navigation strategy behind incorporating subscription pages into their homepages. While it is typically unclear — and maybe irrelevant — whether the content is aimed at acquisition or retention, each of the ten companies listed below are engaging consumers via a new marketing communication channel — syndicated feeds.

Ford “Bold Moves”

Ford’s “Bold Moves” initiative is a brand documentary, tracing the history of the company, the evolution of makes and models, and its struggle to survive in a new world of global competition. The documentary includes audio and video segments. Episode 12 focused on Ford’s involvement in racing, while Episode 5 covered the first road test of the new Shelby GT 500.

Industry – Automotive
URL – http://www.foldboldmoves.com
Number of feeds – 1

Expedia

Expedia offers a level of personalization to their feed offering, by allowing the user to select from five types of feeds (flight + hotel; flight; hotel; cruise; deals) for 20 popular originating and 27 destination city pairs. The different combinations of selection criteria yield over 2,700 possible feeds. I subscribed to the “Chicago to Las Vegas” flight deals feed, which contained one recent post offering a discounted fare. A click on that headline linked me to a calendar page, conveniently showing me the days in the current month when the discounted fare was available. Expedia does an impressive job of tying its feed promotion to a familiar and highly useful page on the site.

Industry – Travel & Hospitality
URL – http://www.expedia.com
Number of feeds – 2,700+

Target

Target takes the red-and-white bullseye to syndication with the “Weekly Ad” RSS feed, offering subscribers an early preview of upcoming deals and a chance to “get a jump on Sunday’s paper.” Posts in the Target feed are SKU-level promotions, and a click on the headline takes the subscriber to a product listing page that includes “Add to Cart” buttons. If this product listing page is only accessible from feed subscriptions, Target will be able to attribute sales back to the feed, and build an LTV model for subscribers — similar to what most retailers do for their email recipients.

Industry – Retail
URL – http://www.target.com
Number of feeds- 1

According to Moore, the life cycle contained gaps between these phases, attributable to dissociations between adjacent groups. The gap between the “early adopters” and the “early majority” was so significant that it was labeled a “chasm.” If a marketer loses momentum trying to cross the chasm, it can mean the difference between success and failure for the product.

Innovation and Media Adoption
Because technology innovation underlies many of today’s emerging interactive media, it follows that the technology adoption life cycle applies to media adoption as well. An important difference, however, lies in the value proposition to the end user. Technology products and services often result in productivity benefits for the end user. While interactive media can provide productivity benefits, the value proposition is multi-dimensional.

Consider, for example the vast amount of online information at our fingertips. Search engines help us gain access to this content in an efficient manner. But the Internet, and other media segments built on its infrastructure – blogs, podcasts, RSS feeds, short videos, and music downloads – provide entertainment and communication as well.

With technology products, marketers receive some assistance from change agents standing at the edge of the chasm. They are drawn there by economic opportunity, and they are willing to place a bet that a product is worthy of mass adoption. With software, this can be value-added resellers and consultants, who promote the product to clients and become experts in implementation. With hardware, original equipment manufacturers (OEMs) leverage a component’s benefits and package it into new and improved products of their own.

If an emerging media succeeds at crossing the chasm, advertisers know the “majority” by a different name. We call it “audience.” And sometimes we’re willing to place a bet on a successful chasm-crossing in advance, so that we’re well positioned to scale our advertising programs when mass adoption hits.

New Media Change Agents
Just like there are change agents that help technology marketers cross the chasm, the economic opportunity draws individuals and companies to the banks of the new media chasm. These are the early adopters who are willing to place a bet that a media will be successful. They adopt it themselves, learn all about the key benefits, understand barriers to adoption, and help shape the media for advertiser adoption. As advertisers peer across the chasm at emerging media, these new media evangelists assist in several ways by:

• Defining the type of messaging that’s appropriate for the media
• Determining how the messaging will be delivered
• Aggregating the media to create scale sooner, rather than later

But before we welcome the party crashers with too many free drink tickets, it’s important to take a moment to celebrate the differences these new channels introduce. Specifically, we need to be careful about applying too many of our current approaches to interactive advertising to a category of content, a site format, and a user interaction pattern that’s different enough to deserve further innovation.

History As a Guide

Interactive marketing has driven its fair share of innovation over the past 10 years with rich media implementations that help marketers make an impact in new and interesting ways. But, rooted in all of this creativity is the necessary standardization that it takes to create an industry. The 30- and 60-second spot dominates broadcast advertising because it allows advertisers and broadcasters to develop and deliver advertising in an efficient and predictable manner. The same is true with magazine and newsprint advertising, where media kits and rate cards from one publisher to the next are more similar than not.

The introduction of cable television spurred innovation by creating a proliferation of new channels, an increase in broadcast capacity that gave birth to infomercials and home shopping networks. Database marketing gave rise to a huge new segment of print advertising that we now know as “direct response,” from postcards to catalogs.

Today, technology is changing the manner in which we consume content online. On the supply side, blog-authoring software has turned millions of Internet users into content creators, publishers and podcasters. It’s not unusual to see a blog feature the same diversity of content as a Web site. On the demand side, blog search and feed syndication have made it easier to find and read distributed media, and publishers are building audiences and generating the page views that marketers notice.

Site Format and Content Consumption

Before exploring various blog advertising strategies, let’s compare the common user interaction patterns between two types of example sites — a sports site associated with a major broadcast network, and a blog that focuses only on the 2006 Major League Baseball All-Star Game. Let’s assume that the online user bookmarks both sites, and checks them on a daily basis.

The sports site is both “wide” and “deep,” with primary navigation that offers a user plenty of different vertically oriented sections of content. The publisher generates new content into most, if not all, sections of the site on a regular basis, so the whole site is continually changing. As a result, pageviews accumulate across several different sections of content. At the same time, users can be sent to pages deep within the site. For example, a search on “World Cup Final” might provide an organic search result that bypasses the homepage and links directly to a story about Italy’s historic win over France.