Bloggers blend business with stuff they like
Advertisers take notice of Web logs, especially those that draw large audiences, loyal followers
chicagotribune.com
By Mike Hughlett
Tribune staff reporter
Published February 20, 2005
John Campea started The Movie Blog, a Web site for amateur movie critics, as a labor of love. Now he's making up to $400 a month running ads on the site.
It's not enough cash for him to quit his job as a law clerk, but it shows the blog world's potential as an advertising venue, a potential that big ad companies have noticed.
Take Starcom MediaVest Group in Chicago. It recently commissioned one of its executives, Dan Buczaczer, to find out how to make blogs attractive to clients like Best Buy.
Starcom figures that blogs, despite their sometimes anarchic nature, are a key way to reach a powerful group known to advertisers as "influencers."
Faced with more skeptical consumers than ever, marketers and advertisers like Starcom are finding that word of mouth carries more weight than a product endorser or, in some cases, even a newspaper or magazine article. With their ability to form personal connections with readers, blogs are drawing interest from advertisers who would pay dearly to piggyback off the bond between blogger and reader.
Blog is short for Web log. It is generally a site featuring a journal or report, written by the blog keeper, or a forum for visitors to post opinions. For instance, the other day at The Movie Blog, one group of visitors debated the merits of actor "The Rock" playing a superhero while another speculated on who would be the villain in the next Spiderman flick.
The Pew Internet & American Life Project recently estimated that the share of Internet users who claim to read blogs jumped from 17 percent at the beginning of 2004 to 27 percent at the end of the year. That means about 32 million Americans read blogs, the organization said--enough to catch the attention of some fairly sizable advertisers.
"We need to monitor these sites to at least know what the hell is going on," said Rishad Tobaccowala, an executive vice president of Starcom MediaVest, one of the world's largest advertising buying firms.
Starcom is trying to get the pulse of this emerging medium with a small team in Chicago, called Reverb, that is headed by Buczaczer. Aimed at informal media-like blogs, Buczaczer's team is part of Starcom's growing online unit, which employs about 80 in Chicago.
Internet advertising is making healthy gains these days. Just look at Internet search engine Google Inc., which recently reported a seven-fold jump in fourth-quarter profits, well above Wall Street's expectations. Google makes its money from advertising.
Overall, online ad spending grew last year at an estimated rate of 32.8 percent, well above the growth rate in total ad spending of 6.7 percent, according to a report by Merrill Lynch stock analyst Lauren Rich Fine.
That strong growth is coming from a small base--online represented only about 3.7 percent of all ad spending last year. But the base is growing quickly. By 2009, Fine forecasts online ads to comprise 7.4 percent of all ad spending, up from a previous forecast of 5.3 percent. Blog ads are a small piece of that pie, small enough that measurements are hard to come by.
The 32-year-old Campea started The Movie Blog about 18 months ago. It averaged 200 hits per month then; nowadays, he gets more than 300,000 page views per month.
As traffic grew, Campea needed more computer server space to host the site. He started running ads to help pay the $10 to $15 a month in hosting costs.
Like many bloggers, he uses Google's AdSense, a service that automatically matches advertisers with sites based on the content of each. Google splits ad revenue with sites like The Movie Blog, and revenue is based on the number of clicks each ad receives. Campea says he gets about 7 cents per click.
Campea, of Hamilton, Ontario, has no plans to make a living off his blog. Still, he said that would be tempting if traffic to the site--and ad revenue--keeps growing at a strong pace.
The self-sustaining blogger is a rarity. But it can be done, as Richard Brome of Philadelphia has shown with Phone Scoop, a site for cell phone enthusiasts.
It features news culled from magazines and newspapers, but also original reporting by Brome. Plus, it has a forum where readers debate the merits of individual phones and discuss issues ranging from ring tones to government auctions of the electromagnetic spectrum.
The 26-year-old Brome launched the site three years ago while he was working for a Web-based business that tracked shipping containers through cargo terminals. Phone Scoop started as a hobby, but Brome thought from the beginning it could amount to more.
Cell phone blogs weren't common at the time, he said. And the potential advertising base looked promising: Wireless carriers are among the nation's larger advertisers, whatever the medium.
Within 18 months, Brome had enough viewers and advertising revenue to make Phone Scoop a full-time venture. Now it gets more than 20 million page views per month, and Brome needs six servers to handle the site's traffic. He just brought on his first employee, a contract worker, and recently hired a consultant to build a better business plan.
"The growth has surprised me but in a good way," Brome said.
He estimates about one-third of his readers are from the cell phone industry. They are regulars partly because Phone Scoop is teeming with news on their industry, but also because the site's forum gives them insight into their most enthusiastic customers.
"They're free opinions," said Starcom's Buczaczer.
Advertising agencies might sink $10,000 to $20,000 into a formal marketing study to dredge up the same sort of information, he said. The feedback element of blogs, their word-of-mouth character, is what Buczaczer finds intriguing.
To better get the feel of blogging, Buczaczer set up his own site, Lullablog.com, to catalog his nightly dreams. On a professional level, he put his theories to work during the holiday season with an Internet campaign for Best Buy.
It started with a Web site for "Kevin Kringle," Kris Kringle's supposed ne'er-do-well brother. At first, the site didn't mention Best Buy. Starcom dropped references to the site on several Web sites and blogs that cater to electronics, video gaming and pop culture buffs.
The goal: to get visitors at those sites to pass around information or questions about Kevin Kringle, creating a buzz in the process. "We had a lot of people trying to figure out who he was," Buczaczer said. People found out when Best Buy rolled out Kevin Kringle in a television ad campaign.
"We think people got the joke," Buczaczer said, who also noted that some people thought the Kringle bit was "stupid" or "not funny."
But at least it didn't provoke outrage, which is a possibility when bloggers and other heavy Internet users feel they are being hoodwinked.
Witness the Raging Cow fiasco. In 2003, Dr. Pepper/Seven Up Inc. introduced Raging Cow, a milk-based drink aimed at teens and young adults. The firm set up a blog and signed up teenage bloggers to write about drink, giving them free samples.
The problem: Dr. Pepper's sponsorship of the bloggers wasn't disclosed, stirring enough anger in blog land to spark a Raging Cow boycott.
"People were upset with the premise that marketing dollars were invading the blog community," said Todd Copilevitz, who worked at the time for The Richards Group, the ad agency on the Raging Cow campaign. "We were one of the first down the path and suffered a slew of arrows."
That hasn't stopped Copilevitz, now director of digital initiatives in Dallas for the TracyLocke agency, from going down that path again.
TracyLocke, owned by global ad giant Omnicom Group, is working with telephone industry giant SBC Communications Inc. on a Web site called "Project D.U." (for "digital universe"). The site, launched in October, is a portal to a network of blogs, including sites for music and sports.
The campaign clearly states its sponsorship. "Presented by SBC" is written below ads for Cingular Wireless, a cell phone network 60 percent owned by SBC.
The bloggers are paid a small licensing fee for the content of their sites, Copilevitz said. But SBC has no control over the content of the blogs, and that's a risk for any advertiser.
"What makes [blogs] cutting edge and appealing makes them dangerous and unpredictable," Copilevitz said. "This is marketing not for the weak of heart." |
