Fact or Fiction: The Long-Tail of Advertising
With all of the talk about the long tail of advertising, you might start to wonder: is it sustainable? Does it really work? Can niche publishers (aka blogs) actuallly make money, and continue to do so?
Panelists in this session from Digg, Google, AOL, Technorati, and Associated Content address the challenges of monetizing niche properties, applying Chris Anderson’s much-talked-about theory to the blogosphere.
Bobby Figueroa fielded most of the questions, as I’m sure many of the search product and ad reps from Google have been doing at this conference. He spoke mostly about quality, reassuring the audience that ultimately, ads should be information, and hopefully relevant information. You may be tempted to run, say, tooth whitening ads on your site because they far outperform any other kind of ad. In the long run, it’s much better to have high quality ads on your site to maintain viewership.
Figueroa also emphasized the importance of advertising tools (platforms, measurement) for publishers. In order to reap the most benefits (i.e., revenue) from your inventory, you’ve got to get your systems to “talk to each other” and minimize the amount of disconnect. To lower the barrier to entry in the display ad market — which many advertisers shun because they don’t have the budget to create customized creative — Google began offering a display ad builder. More than 80% of its users are brand new to the market.
Jennifer McLean from Technorati then sharing some blogger data. The average blogger is a hobbyist, not a professional — no surprise there. Though 28% of bloggers make money from their property, a very small percentage of those support themselves with that income. The average income from blogs that do generate revenue is about $1500.
For those that invest more time and money into their blog (more than $10k annually), the ad revenues sharply increase. A part-time blogger can make between $20k and $120k a year, and though banner ad fatigue is affecting the industry, CPMs are still consistently fairly high, she said. New, effective “conversational” ads, with live feeds, for instance, will push them even higher.
Patrick Keane of Associated Content agreed: with better targeting and new technologies, they are having more success with inventory. Maybe it’s the economy bouncing back, but it could also be a true sign of the long tail paying out for small publishers. Advertisers are starting to feel more comfortable with authentic, user-created content, and they are demonstrating that those sites can be valuable, too. For example, who’s to say that Paul Krugman is any better than a budget-conscious mom in Iowa to talk about the economy? If people find value in something — specifically because of its usefulness — then that’s all that matters.
