Outside the Beltway

Blog Ad Boom

James Joyner · Monday, July 12, 2004 · 1 comment

Chicago Tribune – It’s officially a living: Bloggers find ad boom can pay their rent [otbblog-jamesotb]

A year ago, blogger Glenn Reynolds joked to the Tribune that he was making “burger-flipping” wages from the trickle of funds readers donated to his popular Web site, Instapundit.com. These days, Reynolds can afford to order steak. Since he began accepting advertisements on his site five months ago, Instapundit.com has been bringing in several thousand dollars a month.

It’s starting to look as if bloggers can make a living from their sites, thanks to an advertising boom. Companies who want to reach specific consumers — current-events mavens, conservative PhDs, cell phone fanatics — are hooking up with blogs that can deliver those eyeballs. Some politically oriented blogs are also riding an election-year advertising wave, but industry experts expect the trend to last well beyond November. “One of the big overriding themes over the last few quarters has been the shift from traditional media to the online space,” says Carlo Alvarez, director of media planning of the New York firm Special Ops Media, which creates non-traditional and Web-based marketing campaigns for film studios, record labels and consumer product clients. A year ago, however, many bloggers, especially the more politically oriented variety, were unsure that they’d ever do any better financially than collecting occasional cash “tips” from readers to spend on maintaining their sites — costs that can range into hundreds of dollars a month for the bigger blogs.

For folks such as Reynolds, a law professor who blogs for fun, making money didn’t matter much, but to other bloggers such as TalkingPointsMemo.com’s Joshua Marshall, finding a way to make blogging pay the rent was a more pressing concern. Marshall told the Tribune last November that he had “thought about all sorts of ideas for funding the site,” but he doesn’t need to rack his brain any longer. He’s got more than a dozen ads on his site now, and by the looks of things he’s making much more than Internet server costs and burger money.

Reynolds, who teaches at the University of Tennessee, says he didn’t have high hopes when he started taking ads. “I honestly was not convinced anyone would advertise on my site,” he says. “I mean, I had a few people e-mail me [about ads] and I got porn people who wanted to run banner ads. While I have nothing against porn, to quote Monty Python, it’s not really my idiom.” But in February he signed on with a firm called Blogads, which describes itself as a service connecting bloggers and advertisers. The results have been a pleasant surprise, he says; “I’m quite pleased to be wrong.”

“It’s really just taken off the last few months,” says John Hawkins of RightWingNews.com, a Blogads client who says he cracked $1,000 in monthly ad profits for the first time in June.

Quite remarkable, indeed. I’m not taking in anything close to enough to pay my rent, but then I never expected to do more than break even from OTB. I was hoping to sell a $10 ad once a month; now I’m selling the two premium ads for $150 a month each (although I make considerably less after BlogAds and PayPal take their cuts). In some parts of the country, that would indeed pay the rent.

Blogads offers ad rates tied to its clients’ Internet traffic — the more visitors, the higher the rate for an ad on that site. Given that some sites have been running as many as 15 ads at a time, a little back-of-an-envelope math shows that several of Blogads’ top clients are likely clearing as much as $3,000-$5,000 a month.

I’m a little skeptical of that envelope. There can’t be more than a half dozen sites clearing that kind of money. If one looks at the BlogAds order page, most of the high priced ads are multiple strips from the same few sites. TalkingPointsMemo alone has six adstrips!

But is this burgeoning advertising boom — and it is a boom, since the top premium ad on Escaton cost $100 per month a year a go and $2,500 per month today — built to last? After all, not all advertisers are convinced that blogs are the place to be.

“Every week for the last year, I had at least one advertiser say to me, `Who reads these things?'” says Henry Copeland, the founder of Blogads. “I wanted them to see for themselves that it’s not just unemployed teenagers.” Far from it. In May, Copeland created a demographic survey and asked several of his blogging clients to alert their readers to it. Copeland had hoped that 10,000 blog readers would volunteer to click on the survey and answer its questions, but more than 17,000 did so. And though the survey isn’t a scientifically accurate sampling of blog readers, the folks who filled out the form appear to be a mature, well-heeled group. Sixty percent of the Blogads respondents said they are more than 30 years old, and almost 40 percent reported they have a household income of more than $90,000.

Perhaps most important to advertisers, half of those who took the Blogads survey said that over the last six months they spent more than $50 online for books and more than $500 for plane tickets; 25 percent spent between $100-$500 on electronics via the Web.

A May poll of 20,000 readers of Talking Points Memo — a different survey conducted independently of the Blogads poll — reveals a similar level of prosperity. Forty-five percent of TPM’s survey respondents said they have advanced degrees, and 52 percent claimed incomes of more than $75,000 a year.

The juxtaposition of advanced degrees and high salaries is interesting; they must not be PhD academics. Otherwise, that data doesn’t surprise me much. One suspects news magazines and, especially, opinion journals have similar demographics.

Nick Denton, whose Gawker Media empire employs the waggish writers behind the popular sites Gawker.com, Defamer.com, Gizmodo.com and Wonkette.com, says savvy advertisers are starting to realize they have to follow their customers to the Internet because those customers might not be reachable anywhere else. “We have an 18-34-year-old reader, and the average household income for that age group is $75,000, which is high by any measure. And this 18-34 tastemaker audience is extremely hard to find through traditional media,” Denton says of his own firm’s market research findings. “They don’t read newspapers and they’re reading fewer magazines, and, as everyone has been talking about, men aged 18-34 aren’t watching as much TV.” To reach those elusive consumers, liquor firms, electronics companies and companies promoting independent films have taken out ads on Denton’s various sites, which collectively get about 1.7 million unique users every month.

To keep those potential consumers coming back, and to protect the cachet of his sites, Denton won’t subject his readers to obnoxious or just plain ugly ads. “We actually turn away advertisers if the creative’s no good,” Denton says. “It’s amazing that this far into the Internet era, so much advertising is so badly designed.”

Indeed. OTB has a policy of refusing ads with animated graphics and vulgar images. In a couple of borderline cases, I’ve managed to suggest image modifications to advertisers, persuading them that they’d have better luck with my readership with a cleaner approach.

In recent months, some of the most urgent and edgy blog ads have come from political candidates, who’ve turned to the medium as a cheap and effective way to reach potential contributors. Back in January, the campaign of Ben Chandler, a Democratic candidate for a U.S. Congress seat in Kentucky, placed $2,000 worth of ads on a dozen politically oriented blogs.
Two weeks later, his campaign had raked in more than $80,000 in donations from hundreds of blog readers, some of whom lived nowhere near Kentucky. Chandler went on to defeat his opponent in the Feb. 17 special election, and the political world, especially the left-leaning side, took note. Increasingly, blog advertising has been part of politicians’ now-mandatory online outreach. George Aldrich, campaign manager for Sen. Russ Feingold’s (D-Wis.) re-election bid, says that Feingold’s recent blitz of blog ads has been “a very cost-effective method” of drawing people to the candidate’s Web site and bringing in donations.

For now, that may be the biggest draw of blog ads — compared to a 15-second TV spot or even a small ad in a large newspaper or magazine, blog ads are dirt cheap. “What we’re saying to clients is that you don’t necessarily need to increase your marketing dollars, you need to change the allocation,” says Alvarez of Special Ops Media. He points out that a typical marketing campaign can cost $5 million, often with only a 10th of that set aside for online initiatives. But those online efforts, he notes, often give clients a much bigger bang for the buck, not to mention a more measurable return on investment, because ads on Web sites and blogs can be targeted to reach very specific audiences. “In my experience, and this is often attributed to a smaller and more targeted audience, ads on blogs and smaller niche sites tend to perform better” than those on the home page of a giant search engines, Alvarez says.

That makes sense. Blogs are a very targeted medium and, even on the most high traffic sites, ads are cheap in comparison to any type of broadcasting.

Even some bloggers have yet to get on the advertising bandwagon. Andrew Sullivan, whose Daily Dish is in blog-world top 10 according to the blog-ranking site Technorati.com, has not yet taken any ads, but not because he’s philosophically opposed to them. “I don’t have a staff to do advertising, and I rely entirely on reader donations,” he said via e-mail. “But if someone offered me some money for an ad and with no strings, I wouldn’t object. I just don’t have the time to pursue it.”

Dude, you blog full time. Most of us have jobs and no staff at all. And there are no strings to BlogAds.

Update (1339): Jesse Taylor notes that, unlike the law professors and professional journalists interviewed for the story, “I actually do make a living blogging. In that it is my actual, full-time job.” Heh. Indeed, it occured to me while reading the story that Glenn Reynolds could afford steak before taking ads on his law prof’s pay.

Dan Drezner observes, “At this point, maybe 5-10 bloggers can earn a decent living from blogging. It’s nice that there’s a new job category for the BLS and IRS to consider, but we’re not talking about a huge economic impact here.” Yep.