The Race to Embrace

Online marketers and merchants are quickly adopting new technologies such as blogging to help drive traffic and sell products.

Buzz Bruggeman, founder and CEO of ActiveWords, says his company has spent just $600 to advertise its ActiveWords software application. Yet thanks to his blog-centric marketing philosophy, ActiveWords was named the Third Best Software Product of the Year by Jupitermedia. The application has also been downloaded more than 100,000 times. Speaking in San Francisco at the Business Blog Summit in August, Bruggeman said more than 60 percent of those downloads come after people read the blog.

“It’s been a blessing,” Bruggeman says.

He’s not the only one getting good results. D.L. Byron, principal of Textura Design, says that his blog gets more than 1.5 million page views per month and the company has sold more than 50,000 of its Clip-n-Seal gadget as a result of the company’s blogging efforts. They have also expanded their markets to Ireland and the Caribbean, as well as into new industrial market spaces – such as getting orders from NASA – based on people finding them via the blog.

Blog On

New research is coming out rapidly, and figures are changing quickly. And while the exact numbers on the size of the market vary widely, most agree that the blogosphere is growing by leaps and bounds.

Perseus Development Corp. randomly surveyed 10,000 blogs on 20 blog-hosting services and found that as of June 2005 there were 31.6 million hosted blogs created on services like Blogger, LiveJournal, Xanga and MSN Spaces. Ten million were created in the first quarter of 2005. By the end of 2005, Perseus expects there will be 53.4 million blogs.

In August, some research reports put the number of blogs at more than 70 million worldwide.

According to a study conducted by Pew Internet & American Life Project in early 2005, 6 percent of the entire U.S. adult population has created a blog.

Technorati.com estimates there are approximately 900,000 blog posts every day, or 10.4 posts per second. The blogosphere continues to double about every five and a half months. A new blog is created about every second; there are over 80,000 created daily. About 55 percent of all blogs are active, and close to 13 percent of all blogs are updated at least weekly.

So there is no doubt that blogs are being created, but who is reading them?

According to two studies by Pew, 16 percent of U.S. adults, or 32 million, are blog readers.

A June report from market researcher comScore, sponsored by SixApart and Gawker Media, states that 50 million Americans, or 30 percent of all American Internet users, visited a blog in the first quarter of 2005. Traffic to blogs increased by 45 percent from the first quarter of 2004, according to the study.

The average blog reader viewed 77 percent more pages (16,000) than the average Internet user who doesn’t read blogs (9,000 pages) for the first quarter of 2005. The report also found that blog readers average 23 hours online per week, compared with the average Web user’s 13 hours.

The comScore study also found that blog readers are 11 percent more likely than the average Internet user to have incomes of or greater than $75,000 per year. Similarly blog readers are 11 percent more likely to visit the Web over broadband either at home or the office.

The good news for online marketers is that blog readers tend to make more online purchases. In the first quarter of 2005, less than 40 percent of the total Internet population made online purchases. By contrast 51 percent of blog readers shopped online. Blog readers also spent 6 percent more than the average Internet user, the comScore study reports.

Mind Your Business

So it’s no surprise that businesses are trying to leverage this phenomenon. For merchants and online marketers, using the Internet journal format of blogs allows businesses to talk directly to customers, generate product buzz and encourage consumer loyalty, while bypassing traditional media outlets such as newspapers and magazines.

At press time there were no exact figures on how many companies, executives and employees were blogging. Pete Blackshaw, chief marketing officer for Intelliseek, estimates that there are more than 150 official corporate blogs, with hundreds more in the works.

Big companies are getting into the act. General Motors Corp. Vice Chairman Bob Lutz has a blog (FastLane.GMBlogs.com) that gets between 150,000 and 200,000 unique visits a month. So does Sun Microsystems President Jonathan Schwartz’s (Blogs.sun.com/jonathan), who often uses his blog to take on Sun competitors and market analysts. His blog gets about 300,000 visits a month.

Both Lutz and Schwartz have written several blog entries that raised eyebrows, but corporate blogs don’t have to be controversial to attract attention. Stonyfield Farm, a New Hampshire company that sells organic yogurt and ice cream, has five blogs (www.Stonyfield.com/weblog). Aircraft manufacturer Boeing also uses a blog to promote its brand. Randy Baseler, vice president of marketing for Boeing Commercial Airplanes, made his first entry in Randy’s Journal (www.Boeing.com/ randy) the day before rival Airbus unveiled its A380 super jumbo jet.

Google has launched a blog explaining the ins and outs of its AdSense program (adsense.BlogSpot.com) to publishers. The effort to make AdSense’s workings more transparent offers optimization tips and features descriptions to prospective and existing publishers in the AdSense network and is updated three times a week by a variety of “engineers, product managers, product marketing managers, and operations staff” on the AdSense team. Google’s AdWords program has had its own blog since May.

For online marketers the idea is to be part of the conversation in your space and to get noticed, according to Dave Taylor, author of The Complete Idiot’s Guide to Growing Your Business with Google and well-known business blogger at www.Intuitive.com/blog.

Taylor suggests online marketers offer something of value to visitors. “Communicate with people to show them you are an expert in your area and give them a reason to buy from you,” he says. “So if you are an affiliate that sell laptops, write laptop reviews and blog about that. Include how-to’s or product guides. Blog about maintenance issues. You will give people a reason to trust you. It builds credibility.”

One often-cited story of a blog propelling someone to success is Thomas Mahon, a Savile Row tailor with a blog at www.EnglishCut.com, in which he discusses in great detail the specifics of creating expensive, custom suits – everything from buttons to selecting the right wool. Hugh Macleod, a top-10 blogger, wrote about his pal Mahon, who at the time was having trouble just paying his rent. That gave Mahon’s blog a huge traffic spike and suddenly his sales started to climb. He went from making two suits per month (at $4,000 each) to making 34 suits per month.

Mahon has also been able to expand his market beyond London. In fact, now when Mahon wants to travel to a specific location, such as New York, Los Angeles or Hong Kong, he simply lets his blog readers know and once he’s gotten orders for at least four custom suits he books his travel – a far cry from scraping by to pay his rent.

While these types of success stories are not uncommon, there is a limit to how many times lightning can strike.

“Blogs will help some affiliates become more important,” says Shel Israel, coauthor (with Robert Scoble) of the forthcoming book Naked Conversations: How Blogs are Changing the Way Businesses Talk with Customers. “A few will increase their sales by orders of magnitude. Then they will be imitated to death and, suddenly, no one will be unique anymore. It’s very important to be first with a unique story to tell. It becomes much harder to be second or third.”

Say No to Faux

Unique is good. But Taylor advises against getting too personal in a blog related to your business. “This is a business communications tool. You need to stay on topic. Talk about movies and personal things in your personal blog. Some bloggers think it should all be intermingled. I don’t.

“What if I have strong religious beliefs? That might conflict with the views and opinions of some of my readers and then I would lose business. That’s bad business. Use a blog to build credibility, not the cult of personality.”

Most agree that showing authority and knowledge about a topic as well as passion help make a good blogger.

“Personality is a word that makes me flinch,” says Israel. “You want to be professional and authoritative, but not boring. Boring is death in the blogosphere.”

Taylor says it’s the same principle that should be applied to traditional advertising – it’s about the product, not the personality. “That was the problem with the Dell ad campaign: ‘Dude, you’re getting a Dell.’ It was counterproductive because you want people to think Dell, not dude.” That issue proved to be particularly problematic for Dell when its spokesman for that campaign was arrested in New York and charged with possession of marijuana.

Some big companies are employing corporate bloggers. Microsoft hired Robert Scoble, whose blog Scobilizer is one of the most popular. Though for most affiliates and online marketers it might not be financially feasible to hire a blogger.

But there’s nothing that will destroy your credibility quicker than creating a fake blog. Most industry watchers and blog experts agree consumers can spot a fake blog immediately. They pick up on the insincerity instantly. Fake blogs simply stir up the ire of blog readers by disguising the fact that they are really ad campaigns. McDonald’s made this misstep when the company posted a new blog in advance of a Super Bowl campaign about a Lincoln-shaped french fry.

Steve Rubel, vice president of client services at CooperKatz & Co., a New York public relations firm, who also had a blog (www.MicroPersuasion.com) suggests avoiding fake blogs or just regurgitating press releases.

“It’s about finding the intersection of your passion and what people care about,” Rubel says. “Hopefully, they overlap.”

Spreading the Word

If they do, you’ll likely get other bloggers and consumers talking about you or blogging about you. That buzz can help. If other bloggers are linking to your business, it increases your ranking on Google. That helps people find you.

Clip-n-Seal’s Byron says, “Sales come from search, not ads.”

But Bruggeman adds, “Blogs are not about eyeballs. It’s about the conversation.”

“Word of mouth is very important,” Taylor says. “It’s important to know how people are getting to you, not just how people are searching for you.”

But word of mouth can be a double-edged sword. Many fear the consequences of letting consumers freely express their opinions. Those with the fear aren’t sure about allowing readers to post comment in their blogs.

However, some bloggers allow comment, even negative ones, as a way to add a level of credibility. It’s an individual choice. Israel says he uses what he calls the Living Room Policy.

On his blog (www.ItSeemsToMe.com) Israel writes, “If you come into my home and you are rude to me or my guests, I will ask you to be more polite. If you persist in being rude, I will throw you out of my home and will not allow you back into the house. If you begin with the clear intent of being offensive, you will be tossed out and banned without warning. I also take a dim view of anonymous comments. I am suspicious of people who take a position and will not demonstrate the courage to reveal who they are. I often just dump out those comments whenever I feel like it. This does not mean that I don’t welcome disagreement. But if you’re going to come onto this site with a spray paint can in your hand, you’re out of here.”

While you can control whether to allow others to comment on your blog, you have no control over what others say about you or your company on their blogs.

For example: Jeff Jarvis, the creator of Entertainment Weekly magazine and a high-profile blogger (www.BuzzMachine.com), took Dell Computer to task for the company’s alleged refusal to fix or replace Jarvis’ broken computer.

BuzzMachine frequently receives more than 5,000 visitors a day, and an open letter that Jarvis wrote to top Dell executives was the most linked-to post on the blogosphere for that day, according to Intelliseek’s BlogPulse. The post was also either linked to or discussed by at least .01 percent of all blog posts written that day, according to BlogPulse.

Back before the Net, Jarvis might have been just another dissatisfied customer. But today his widely circulated criticism triggered dozens of other bloggers and hundreds of others to publicly complain about service they’ve received from Dell’s technical support.

That problem is not unique to Dell. Many companies are not prepared to handle how their customers can share their experiences virally, says Intelliseek’s Blackshaw.

In the end, complaints that appear in blogs can do as much damage as a negative advertising campaign. Prompted by the incident with Jarvis, Dell’s public relations department began forwarding complaints with personally identifiable information to the customer service department so that representatives could contact dissatisfied consumers directly.

Mark Cuban, the owner of the Dallas Mavericks basketball team and an investor in IceRocket, wrote in his August blog (www.BlogMaverick.com) that blogs have changed customer complaints.

“It used to be an old customer service mantra that ‘one upset customer can tell 20 people about how poorly your company performed, and those 20 people could tell 20 more, and your business could really suffer.’ Keep all your customers happy, and you won’t have to worry,” Cuban says.

“Those numbers are miniscule compared to today. In today’s world, one upset customer can write in their blog about how upset they are about your product or service and it could be linked to by any number of other blogs, which in turn are linked to by any number of blogs, which is in turn picked up by a TV news show. In 24 hours or less, tens to hundreds of thousands, if not millions, of people have heard the complaint, and your business and brand are at risk.”

Searching for Blogs

But before you can handle a potentially problematic situation, you have to know what is being said about you or your company and where it’s being said. It’s a good idea to subscribe to blogs with RSS (really simple syndication) feeds as well as use RSS to send out your feeds. As of August, just 11 percent of blog readers, or about 2 percent of U.S. Web users, were using RSS tools to manage blog feeds, according to a report released by Nielsen NetRatings.

Nearly 5 percent of blog readers use feed aggregation software, and more than 6 percent use a feed aggregating Web site to monitor RSS feeds from blogs, according to a Nielsen NetRatings June survey of 1,000 online users who had visited blog sites.

The report also found that 66 percent of blog readers either did not understand RSS or didn’t know it existed, according to the report, which is titled, “Understanding the Blogosphere.”

Another way to monitor who is saying what about your business is to use niche search engines like Feedster, IceRocket (to be renamed www.BlogScour.com), PubSub and Technorati. These search engines are already monitoring and indexing millions of blogs so they can be searched. Technorati tracks more than 15 million blogs, and that number is growing every week. In July IceRocket claimed to track 18 million blogs, up from about 15 million four months before.

Many speculate that paid search and contextual advertising will progress into the context of customer-created dialogue. Search will be less about acquiring customers and more of a tool to insert brands into conversations between individual people, markets and groups of like-minded folks.

So monitoring, analyzing and archiving that conversation is becoming valuable. And like most other areas of the Net, where there is great opportunity there is also the potential for fraud.

Another obstacle in the efforts to organize and search blogs is that some companies appear to be using computer programs to create spam blogs or “splogs.” The sole purpose of these splogs is for posting links to their websites. The problem for blog search engines is that when users query certain terms the served results can end up being links to these splogs, instead of to the consumer-generated content the searchers were looking for.

Cuban says these blog search engines are being spammed in monstrous proportions in the blogosphere because it’s so easy to do. He writes, “Blogs are coming at us left and right. We are killing off thousands a day, but they keep on coming. Like Zombies.”

He puts some of the blame on Google, which owns Blogger.com. The service enables users to set up free blogs. However, some say the onus is on search engines to come up with better algorithms, not on the blogging software to stop splogs.

Making Money

There are lots of blogs, but are online marketers making money?

Weblogs Inc. is a network of 80 blogs. It is generating a steady stream of revenue from network ads and direct ads. The network ads are automatically served by Google and Tribal Fusion, and direct ads are the result of contracts with such advertisers as Equifax, Pacific Poker, Palm, Subaru and Volvo. According to founder Jason Calacanis, the majority of the company’s revenues come from direct ads, which currently command a CPM rate of between $4 and $12, whereas network ads generate CPM between $1 and $4.

Weblogs Inc. generates more than $1,000 per day from Google AdSense alone and has recently surged as high as $2,000. More than half of Weblogs’ advertisers end up buying space on more than one of the network’s blogs, says Calacanis, but to interest a direct advertiser, a blog’s traffic must exceed 1 million page views per month.

John Battelle, co-founding editor of Wired magazine and founder of The Industry Standard, has started Federated Media, which will serve as an ad and marketing network for high-quality blogs. FM will function much like a book imprint or record label, aggregating like-minded blogs, (about 10 to 20 per category to start). The categories include technology, media, pop culture, entertainment/gaming and sports segments.

BlogAds has a network of 750 blogs. Advertisers have run the gamut from carmaker Audi to political and other special interest groups. BlogAds expects to have 2,400 ads on blogs for the month of August, up from 700 a year ago. The average blogger makes $50 a month from displaying BlogAds, but some bring in more than $5,000 monthly, CEO Henry Copeland says.

Advertisers can find the separate groupings, along with traffic numbers and prices, and do a partial or full network buy. The theory behind the new networks is that bloggers can group themselves together much better than a top-down organization – because of the large volume of blogs – and advertisers get to select blogs by category, and on top of it reach millions who don’t read the top blogs but do read myriad others.

And while blogs will never replace other forms of content on the Web, they do have a distinct role to play, according to Jon Gibs, senior research manager at Nielsen NetRatings. “While these sites will likely never have the traffic of some of the larger ad networks, blogs do have a specific role to play in the online advertising mix,” Gibs said in the report.

“Advertisers should look to blogs as a way to organically grow trends by leveraging the role of bloggers as peer influencers. By associating their message with the blog’s image, advertisers can legitimize new trends they are hoping to promote to a niche audience.”

It’s a Commitment

Israel says that most bloggers like to take the position that every business should blog, “but that’s just not true.”

“There is a tremendous time commitment. It’s not just about doing your own blog, but about seeing what others are saying and being part of the bigger conversation. If you don’t have the time or the inclination, then you shouldn’t be a blogger,” he says.

Rubel say it’s a lot of effort but “you get what you put into it.”

Still, even if you don’t have the resources or commitment for blogging, you can’t just ignore it.

“You can no longer ignore the blogosphere,” Israel says. “It’s here and it’s where the fastest-growing news is taking place. Its influence is enormous, and it’s continuing to grow. And it’s not going away. It’s only going to get bigger.”