Blogging 2.0 and Advertising

One of the most common arguments against Blogging 2.0 is that it threatens advertising revenue by diluting a blog as the ultimate point of conversation around a topic.

Blogging 2.0 brings new challenges and distribution models, but does it necessarily affect advertising, and if it does, how might the game change?

Blogging 1.0: the electronic newspaper model

It may surprise some to know that the blogging 1.0 reveune model wasn’t really original. The first wave of blogs relied on selling advertising on their site while giving away the content for free, the exact same model used by free newspapers around the world today. Blogging also borrowed from traditional newspapers through RSS and email subscription models; sure these were free subscriptions but like traditional newspapers subscriptions deliver guaranteed traffic to the content, either directly or sometimes indirectly through RSS (although as the chart notes RSS can have advertising as well).

Blogging 2.0: a new ball game

Blogging 2.0 builds on the blogging 1.0 model but takes the conversation to many sites, not just the original site. As noted in the chart services like Disqus and FriendFeed do feed back to the original site, but they also cross each other as well; conversations can and do occur independent of the original site and in a way that (currently) advertising has no role.

The question for anyone aiming to make money from blogging is whether giving up some of this conversation can overall improve the standing and long term traffic of a site. I’ve already argued in the affirmative on this, but the question then becomes, can we monetize the conversation?

Distributed revenue: the 99 million dollar question

There is no current model for sharing wealth across the 2.0 blogging services yet. A traditional model may have the external service placing contextual advertising against the conversation, but then you get the leach problem highlighted best by Shyftr: a service that republishes full content and keeps the conversation to itself, becoming nothing more than a copyright infringer. Services like FriendFeed walk a fine line around this: they are doing the right thing by not republishing the full feeds, and subsequently driving traffic back to the original source, but they are also building a user focused business on top of external content. Currently FriendFeed doesn’t show ads, but eventually they’ll have to unless they’re a flip or flop play like Twitter (no business model, built only to be acquired).

When I spoke on a panel at CeBIT earlier this week on Future Trends one of my main points was the build it and they will come philosophy of user generated content was dying. Companies that wanted users to contribute, or even as we’ve seen with Microsoft this week, users to simply use the service, have now got to give back. Why cant the model apply to something like FriendFeed or Disqus?

Revenue Sharing

Revenue sharing is an old fashioned concept, but as the build it and they will come days pass the model is spreading throughout the greater 2.0 world (its been prevalent in blog networks in CitJ sites for years). What if Disqus and FriendFeed tomorrow said we need revenue, we are going to show ads, but because we value our users and the access to content (but directly and indirectly) they provide, we’re going to share a percentage of every dollar we make against that content (comments, personal or group) or the content you seed (the link/ headline + threads on FF). Maybe even for good measure throw a usage factor in there that rewards users based on their direct participation as well.

For Now

For now the advertising rules of blogging 2.0 don’t differ that much from blogging 1.0, it’s still all CPM, CPC and CPA. We are seeing some 2.0 styles of advertising such as widget based advertising and this is changing the game from older style advertising to ads that contribute to the user experience as opposed to take away from it. We will see even more new and innovative advertising ideas in the coming year, and I predict we’ll also start seeing advertising solutions that tap into the blogging 2.0 cloud. 2008 for Blogging 2.0 will be a repeat of 2004 for Blogging 1.0.