All About... The monetisation of blogs

You probably won’t read about this on her blog, but Chinese celebrity Xu Jing Lei has a very difficult decision to make: should she include advertisements on her emoticon-filled website? After all, the host of her blog, Sina.com, one of China’s largest online portals, recently invited 3,000 of its top bloggers to make money through blog advertising revenue.

Sina will give participants in the monetisation programme half the revenue it earns from ads on the blog. Sounds like easy money for Sina, who claimed its non-monetised blogs earned US$1 million in revenue in the second quarter of the year. Xu is Sina’s most popular blogger, after tallying 100 million hits in the first 600 days of her blog’s existence, according to Sina. But will advertisements drive her readers away? Will Xu - and Sina - meet financial expectations?

1 You can’t blame a blogger for wanting to monetise. The top blogger in Singapore earns up to S$2,000 (US$1,300) a week for including a single display ad, says Timothy Tiah, CEO of Nuffnang, an ad serving company for blogs. Popular bloggers can pocket even more money by plugging a product in their entry. But such advertorials  can be costly and difficult to coordinate with bloggers. “No one’s going to run 400 effective advertorials at one go,” says Tiah. “We normally get bigger bloggers to supplement display ads with advertorials. It’s a lot more effective that way.”

2 Finding the right ad-serving tool is crucial from both blogger and advertiser perspectives. In Asia, the pickings are slim for bloggers. Google AdSense is the oldest and easiest way to pocket a quick buck. This system automatically matches blogs to display or text ads, which might explain all the Viagra ads you see in your favourite blogs. Malaysia is advanced in this field, as headquarters to two specialist agencies run by bloggers: Nuffnang and Adverlet. The benefit of specialist agencies, says Nuffnang’s Tiah, is to ensure that a blog doesn’t get overrun by irrelevant, distracting ads. “We don’t have rollover ads, and we try not to allow more than two ads on a site at a time.”

3 It’s easy to assume that once money enters the equation, a blogger loses control over his own content. However, Tiah emphasises that there are numerous levels of control, ranging from the client writing the entry for the blogger, to a non-intrusive text ad conspicuously placed at the bottom of a blog. “You need a balance between pleasing the blogger and pleasing the advertiser,” says Ng.

4 Sina’s success hinges on how it manages blogger and client expectations. “As long as the blogger is aware of what’s going on, I don’t see why putting banners and buttons on the page wouldn’t be successful,” says a China-based planner. “Corporations trying to harness the power of blogging need to be especially sensitive to how difficult these media are to control.” Sina’s plans may backfire given that in China, blogs are seen as one of the few ‘authentic’ media. “If readers in China believe that the blogger is getting paid to talk about a particular brand of shampoo, then Sina’s scheme could go wrong very quickly.”

5 Blog advertising remains niche, everywhere. In the US, PQ Media estimated that less than US$17 million was spent advertising on blogs in 2005. This is expected to grow to $300 million by 2010. In Asia, Malaysia has the most advanced monetisation system in place (the country’s top three bloggers, for instance, each have their own agents). “The industry is still trying to catch up with social networking measuring metrics,” says Ng.

“It’s still a very new concept with unproven effectiveness.” Although ads on blogs are purchased based on similar statistics and audience measurements as any website, advertisers are more wary of  intruding on a private interaction between blogger and reader. “General ad serving on blogs, such as through AdSense, might get lots of impressions - but not necessarily lots of click-thru.”  

6 While agencies in Asia-Pacific grapple to understand how to value blog advertising, media owners (and blog hosts) such as MSN and Yahoo have begun dealing directly with clients. In Singapore, Lenovo worked with Windows Live Spaces to build a blog, purportedly written by Melody Chan. Buena Vista International did the same to promote Ratatouille before its digital agency Profero could present the solution.

What it means for… 

ADVERTISERS

- Advertising on blogs is riskier and less proven than general online buys, but the benefits can be immeasurable.

- Given the perceived authenticity of a blog, it’s crucial to understand it inside and out. Who does it target? What makes it so popular? How does the blogger engage his readers? Do your competitors already advertise on the blog?

- Advertorials generally work best. Unsurprisingly, they are also the most expensive and difficult to coordinate. Don’t fall into the trap of expecting hundreds of a market’s top bloggers to speak positively about your brand.

MEDIA AGENCIES

- Given the pace of blog adspend overseas, it’s worth familiarising yourself for an early mover advantage. Most of the media agencies Media spoke to were only vaguely familiar with blog advertising.

- Think beyond display ads, which are more intrusive on a blog than on a typical website. Sensitively-placed advertorials can be as rewarding, as they have been for clients such as Apple and Nike.

PR AGENCIES 

- Pitching to bloggers is no different from pitching to journalists, says Benjamin Koe, new media specialist at Hill & Knowlton Singapore. Except for one crucial difference: bloggers are less focused. They can write about how the PR agency treats them, as Edelman knows after last year’s run-in with A-list bloggers who were sent laptops from Microsoft.

- Advertorials don’t come cheap. Target no more than a few top bloggers per campaign.

- Editorial integrity matters. Consumers will desert blogs if they feel they are commercially influenced.