For the past six weeks, b5media has been actively trying to hiring an advertising sales manager so we can grow revenue and become less dependent on things such as text links and AdSense. In talking to potential candidates, one of the things we’ve highlighted is the huge potential of the blog-vertising market as advertisers begin to allocate some of the budgets to the user-generated content market.
There is little doubt blog-vertising is going to see huge growth over the next few years as advertisers become adopt more aggressive online strategies. We see evidence of this trend in our business every day as email inquiries appear in our in-boxes. The question is how quickly will the blog-vertising market grow. According to a study done by PQ Media earlier this, the blog-vertising will climb to $120-million by 2010 compared with $16.6-million in 2005. That’s impressive but it strikes me as conservative, although I could easily be accused of being biased. 
What has struck me over the past three months since joining b5media is how many advertisers are still cautious about the online market, which seems strange give the strong growth that Internet advertising has seen over the past two or three years. Many advertising realize they need to be on the Internet but they’re still unclear about where to do it (mainstream sites, niche sites, blogs, podcasts), how (banner ads, CPM, CPC, CPL) and how much of their budgets (1%, 5%, 20%).
In terms of the blog-vertising market, a major challenge facing advertisers is who to do business with given there are 50 million blogs and counting. My sense is advertisers will approach the market in a pragmatic way and do a lot of experimenting with a variety of players to see what works. Part of this go-slow approach is many advertisers still see the blogosphere as the Wild West where anything goes. This is great for readers looking for lively writing but not ideal for advertisers that want editorial content they can count on.
As a result, advertisers initially do business with blog networks such as b5media, Federated Media, Gawker, Weblogs Inc., 9Rules, GigaOm and PopSugar where there are editorial standards and the media buys are easier than trying to pick off individuals blogs even those that are popular.
For more thoughts on the blog-osphere and the advertising market, check out Canadian Business writer Andy Holloway’s recent column.
6 Comments
“What has struck me over the past three months since joining b5media is how many advertisers are still cautious about the online market”
Follow the money. It has nothing to do with them being cautious or not. Main stream advertising agencies and their media departments haven’t changed their business or their business models and therefore it’s not in their best interest to recommend online. I have a rant about here.
http://leighhimel.blogspot.com/2006/12/devaluation-of-interactive-media.html
“What has struck me over the past three months since joining b5media is how many advertisers are still cautious about the online market”
As always just follow the money.
It has nothing to do with them being cautious or not. Mainstream advertising agencies and their media departments haven’t changed their business or their business models and therefore it’s not in their best interest to recommend online. I have a rant about here.
http://leighhimel.blogspot.com/2006/12/devaluation-of-interactive-media.html
So how long do you think it’s going to take for their business models to change? I’d be interested in your views on who’s advertising now online.
Mark
From what I am hearing from a number of clients, they are dissatisfied with the traditional thinking they are getting from big ad agencies and want to break out. It is just some of them are fearful that since they don’t “get it” themselves they want to make sure they have a partner that will (AKA how can I avoid the Walmart Flog scandal). I think of it as a marketing generation gap.
I think as soon as we start to see this clients move their business (and of course their media/ad dollars) to pure play digital agencies and/or companies that focus on non-traditional approaches to brand, that’s when you will see them scramble.
(sorry for the dble posting by the way)
The biggest problem facing blog advertising is with measurement. As Leigh says in his thoughtful rant, most of the advertising spend still goes to TV with the rest split across “everything else.”
If a firm wanted to reach through blogs what it used to through broadcast media, its not a matter of adding up the reach results from a small list of channels, but trying to add up thousands or millions of individual blogs. With that many operands, there is a great risk that the numbers will be at best gamed or at worst fradulent.
I’ve been selling online advertising for the last 3 years from free sites, user generated networks and now some blogs. If you stand by your stats and demographics, then target the buyers that are a good fit for your traffic, you will have long term residual advertising income.
One thing I have realized.. if you have volume traffic they will buy, if you have productive traffic they will stay. Most large companies implement a % of the campaign budget for branding then ROI.
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