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http://www.nytimes.com/2005/11/26/technology/26blog.html
November 26, 2005

As Corporate Ad Money Flows Their Way, Bloggers Risk Their Rebel Reputation

By LOUISE STORY
The New York Times

When Anita Campbell started her Web log about small-business trends two
years ago, she thought it would simply be a service for her clients and help
her consulting business grow.

Instead, she said, the blog "just took off," attracting more readers than
she had dreamed of. Then, companies offered to pay her to post
advertisements and product mentions on her site. There were enough offers,
she said, that she could choose to work with only the ones relevant to her
readers. And so, her blog, once just a marketing tool, became a money
generator on its own.

"I never try to hide the fact that I am writing about an advertiser," she
said in an e-mail statement. "But I also don't apologize for accepting
advertising, and I make it clear that just like everyone else I have to earn
a living and pay the expenses of keeping the site going."

After beginning as a vehicle for anti-establishment, noncommercial writers,
many Web logs have laid out welcome mats for corporate America in the last
couple of years. No one tracks how much advertising money is flowing to Web
logs. Nor is it clear how many bloggers, like Ms. Campbell, disclose their
sponsors. But when writers have not been completely open, their fellow
bloggers have been quick to criticize.

Businesses have noticed the growing readership and influence of these
Internet postings and are spending $50 million to $100 million this year on
blog advertising and marketing, said Charlene Li, an analyst at Forrester
Research, a company that looks at the impact of technology on business and
consumers. Recognizing that blogs have become more mainstream, companies are
paying for advertisements or mentions on blogs, courting blog writers with
public relations efforts and inviting writers to come blog on one of their
corporate sites.

The blogosphere, companies said, is an important place to have a presence,
and blog writers are not shying away from the attention.

"The attitude has completely changed from where it was two years ago and
even a year ago," said Jim Kukral, the publisher of ReveNews, a site about
making money from Web logs. "People have started to realize that, hey, this
is fun; we've proven it's fun; I enjoy doing it; now let's apply a few
advertising techniques and make some money."

There is now an annual Blog Business Summit and several books on how to make
money blogging.

Many blog writers have signed up for Google's AdSense program, which started
in 2003 and pays Web publishers based on how many times advertisements on
their sites receive clicks. Google places the ads on participating Web sites
using contextual word matching, in an attempt to ensure that the
advertisements relate to the content on the page.

Bloggers are also making money through "affiliate networks," which, in
contrast to Google's automated system, allow blog writers to choose which
advertisements to put on their pages. They also can be paid based on how
often ads on their sites lead to sales rather than how often the ads receive
clicks. Shareasale, Commission Junction and LinkShare are three such network
companies.

"You have all these self-publishers, people like the bloggers, who suddenly
become business partners with Fortune 500 companies," said Heidi S. Messer,
the president and chief operating officer of LinkShare, which connects Web
writers with companies like Dell, Wal-Mart and Apple Computer.

Sometimes blog writers make money by simply linking to companies' home
pages. Companies come up higher in Google, Yahoo and other search engines
when they are frequently linked to and mentioned on many sites, including
blogs.

USWeb, an online marketing firm, has run campaigns this year that pay people
$5 to mention a company or link to its site. Most of the companies USWeb
works with do not allow the company to identify them, said Ed Shull, the
chief executive of USWeb, but some that he can mention include Lussori.com,
a watch and jewelry company; Dot Flowers; and Terra Entertainment.

Currently, USWeb is asking people with personal profile pages on
myspaces.com, a social networking site, to include a trailer from Terra
Entertainment's coming release of the film "One Perfect Day" on their pages.
In exchange, these Web users will have their names listed on the end of the
credits on the film's DVD, Mr. Shull said.

USWeb has been criticized by some blog writers for not requiring its network
of about 5,000 blog writers to disclose payments. It is currently completing
guidelines on how bloggers should disclose that they were paid to mention
products, Mr. Shull said.

"We are still leaving this as an option to bloggers," he said in an e-mail
statement, "but we do recommend that they disclose to readers that
advertisers do support the site through paid mentions."

To be sure, most blog writers do not make any money, and those who do often
make only enough to pay their site fees. There are now at least 21.5 million
Web logs worldwide, according to Technorati, a company that tracks blog
postings. Many blogs remain primarily personal postings that Internet users
pursue purely because of their own interests.

Still, large numbers of online writers are interested in making money.

Large blog Web sites like Gawker Media and Weblogs have offered blog writers
another opportunity to cash in. These sites display their postings alongside
that of many other writers, increasing bloggers' abilities to attract
readers and advertisers.

So far, the idea seems to be working. Jason McCabe Calacanis, chief
executive of Weblogs, a site acquired by the America Online unit of Time
Warner this fall, said the site would generate a few million dollars this
year. Weblog's 140 bloggers are paid based on how often they write, he said.
A Forrester Research survey found in February that 64 percent of national
marketers are interested in advertising on blogs.

Audi, for example, paid for about 70 million ads about its A3 compact model
on 286 Web logs in the spring. Many of the blog ads featured links to other
blogs that mentioned Audi's campaign for the A3, not to Audi's site, said
Brian Clark, chief executive of GMD Studios, an experimental media firm that
worked with Audi's advertising agency to create the campaign.

"It was a substantial buy, and it was a really effective buy for the
campaign in terms of the response," Mr. Clark said. "You find that blogs are
these series of citational records of what bloggers read. People with blogs
read blogs. You get a feedback cycle."

Web logs also give advertisers the chance to aim at specific readers. If you
want to advertise to New York Mets fans, for example, you can easily find
blogs that cater to those readers, Mr. Clark said.

Last spring, Volvo spent several million dollars to sponsor Microsoft's MSN
Spaces, a site that offers free Web logs and personal pages. The blog
investment was worth it, said Anna Papadopoulos, the interactive media
director at Euro RSCG 4D, a division of Havas that is running Volvo's Web
log campaign. Since April, about five million pages have been set up by
individuals, and a million people have visited Volvo's home page directly
from the blog site, she said.

"These are people that we wouldn't have gotten through other marketing
efforts," Ms. Papadopoulos said.

SBC Communications, which adopted the AT&T name on Monday, has found that
advertisements on the blog site it started last fall, ProjectDU.com, have a
higher click-through rate to its home page than its advertisements have had
on other Web sites, said Michael Grasso, associate vice president for
consumer marketing at AT&T.

Companies are also starting Web logs on their sites written by their
employees. General Motors, for example, created two within the last year.
Blogs may eventually replace many of the company's news releases, said
Michael Wiley, director of new media for General Motors.

General Motors has also started to treat some Web log writers as it does
traditional journalists, and is deciding which bloggers to invite to media
showings of its new cars.

"It's very similar to media relations, but it's a little more grass roots,"
Mr. Wiley said. "The level of respect for certain influential bloggers is
certainly growing."

When Piaggio USA, the makers of Vespa scooters, decided to include a Web log
on its site, the company recruited Vespa customers who were already blogging
about scooters. The two Vespa blogs, which started posting last summer, do
not pay the writers and ask the writers not to sell later the material they
write for Vespa.

One Vespa writer, Neil Barton, said he was willing to blog on Vespa's site
free because of the visibility it would give his blogs, formerly published
only on his own site, UrbanNerd.com.

"I just thought, well you know, no one really knows about UrbanNerd, but a
lot of people know about Vespa, so it will be a cool way to get what I'm
writing out there," said Mr. Barton, who lives in New Jersey. "The only
limit I could see with Vespa is if I wanted to write about a competitor's
scooter. I probably would post it on my blog as opposed to Vespa's."

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# posted by newshare @ 7:33 AM