In Search of the Blog Economy

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Beyond the Banner
Rather than fearing the sometimes monstrously uncontrollably viral quality of blog media, which can spread bad press faster than a cable news cycle, some consumer brands are not only advertising on blogs but embracing the format for themselves. Companies like Nike and New Line Cinema have commissioned Gawker Media to create sponsored, branded micro-sites. They look and feel like blogs, with dated entries and a personable voice, but they are really promotions for John Waters' A Dirty Shame at the site, and a blog synched with Nike's Art of Speed branding campaign at the site. Gawker media uses promotional assets already provided by the companies but then hires a writer to pen the frequent entries and maintain the appearance of editorial independence.

Gawker's "contract publishing service" is the blogopshere equivalent to creating advertorial inserts, clearly labeled promotions that try to mimic and benefit from the authoritative style of the host medium. And this kind of custom publishing may unplug several new revenue streams for blog publishers—not only building these micro-sites but also consulting with sponsors on how this new realm of blog media works.

Weblogs, Inc.'s Calacanis is thinking even bigger than custom publishing. He's working towards building trusted voices and brands out of sites like Engadget and AutoBlog that spin off into other media: print, research reports, conferences, or even branded products. He believes that blogs represent a new media channel of passionate, critical consumers who have more credibility with audiences than the traditional press, which is why young audiences are pouring into blogs for their information about products, politics, and even other media. On the post-bubble Web, both Weblogs, Inc. and Gawker Media are careful not to over-hype the blogosphere, but it is no coincidence that their blogs carry names that might also make good magazines or even cable channels. "Anything ESPN or the WWF has done with their brands we could do," says Calacanis, who still carries remnants of the old dotcom idealism.

The Medium's Message
At least one major business publisher, Penton Media, has gotten traction by flipping Calacanis' model and transforming a venerable old print brand, Internet World, into a series of blogs run by both editors and readers at the newly relaunched The magazine folded in June 2003 but lived on as an email newsletter. The revived Web site posts links and commentary on IT-related news, but it also lets the readers create their own blogs. When done well, blogs cultivate community and create a locus of expert commentary and laser-targeted audiences that can be leveraged with sponsors. "In highly technical areas your readers know as much if not more than your franchise does," says David Blansfield, group publisher of Penton Media. "Now you give them the opportunity to share their expertise."

With a four-person dedicated staff, Blansfield expects to break even in the first year off of very good 3% click-through rates on site banners thus far. His ad inventory includes the email newsletter (also a blog) that now goes to 60,000 highly qualified readers. Ironically, rather than challenging mainstream media, blogs may be a way for defunct brands to dip a toe back into familiar B2B content revenue streams. Penton foresees Webcasts, online events, and Web marketing opportunities spinning out of this radical departure from a weekly trade tabloid. "I've drunk the Kool-aid," says Blansfield, "The medium is the message."

Yet another novel way to wring revenue from blogs is to push the medium's message out to all of those addicted blog-watching niches and then target market them like crazy. MessageCast's new LiveMessage service issues alerts about new blog postings via a subscriber's instant messaging, RSS, cell phone, PDA or email. Pushing blogs out to the readers will increase repeat traffic, promises MessageCast CEO Royal Farros, and it gives MessageCast the opportunity to drop in contextual text ads for a self-defined, highly interested audience. This "alert message marketing" is a step beyond search engine marketing because the audience is so highly targeted, he says. LiveMessage does not yet sell ads, but 500 blogs already let users subscribe to the alert service, and within a few months the number of alerts it sent grew exponentially from 10,000 to 3.5 million. "Our desire is to cut the content producer in," says Farros. "It's their content."

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