“All the stuff that’s done really well on mobile has been incredibly short form and easily scannable,” Mullenweg told AllThingsD’s Kara Swisher. “I think there’s a space … to sit down and read something longer than a couple of seconds. Rather than the coffee line experience, what’s the sitting-down-in-the-back experience? We’re going to keep experimenting.”

Mullenweg said that the average post on WordPress is 280 words long, and that’s remained “relatively constant” over the past few years. “Certain ideas need to be expressed and they just need more than 140 characters,” he said.

WordPress is taking steps to surface more of its users’ content. “We’ve been working a lot on wordpress.com to create an interesting reading experience,” he said. The site’s “Freshly Pressed” feed surfaces content from across users’ blogs. “You’ll see a lot more longform content and a lot more galleries [on the feed],” Mullenweg said, and traffic to that feed has grown by double digits in the past couple of months.

When Swisher noted that WordPress doesn’t link its users’ blogs together — suggesting what else to read if you liked a certain post, say — Mullenweg answered that “we’re really excited about starting to do that.”

And while Mullenweg criticized many forms of digital advertising — “print ads are still infinitely better” — he suggested that WordPress might look at offering more native advertising options. WordPress would consider a partnership with a company offering native ad units, he said, if it’s “something really compelling that doesn’t make readers block it…Native advertising is the most interesting thing I’ve seen. At the point where advertising becomes as good as the content that surrounds it, I will applaud it.”

Disclosure: Automattic, maker of WordPress.com, is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, GigaOm. Om Malik, founder of GigaOm, is also a venture partner at True.

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There’s no question Business Insider has grown substantially since the last time Blodget opened up about his company’s performance: almost two years ago, he released some public numbers, and at that point the site — which was then about three years old — was pulling in 8 million unique visitors per month and had revenues of $5 million. The site even turned a minuscule profit in 2010, Blodget said, of about $2,000 (that’s not a typo).

In the latest update, the Business Insider founder says the site has boosted its traffic substantially, and now gets an average of 23 million unique visitors per month, or more than a million on the average day — growth that he says puts it ahead of giants such as Businessweek, Mashable and TechCrunch.

While that’s impressive, however, Blodget hasn’t provided us with some of the most important data a media company needs in order to prove its health: namely, revenue and/or profitability metrics. It’s probably safe to assume that revenues are higher than they were almost two years ago, or the site would have shut down by now — and they may even be dramatically higher, since pageviews and unique visitors are still popular measurements used by many advertisers to determine success.

But as Blodget himself notes in his presentation, the profitability of digital advertising has been plummeting over the past few years. The amount of advertising is still growing rapidly, and ad revenues are also increasing, but it’s a little like the Red Queen’s race in Alice in Wonderland: media companies are having to run faster and faster just to stay in the same place — every incremental pageview is worth less and less.

This is the same dilemma that almost every media entity is facing, from traditional players such as the New York Times to newer stars like BuzzFeed and The Huffington Post. Some of the newer entrants like BuzzFeed — and even the more entrepreneurial of the old guard, such as The Atlantic and Forbes — are trying to use more “native” advertising formats such as sponsored posts and marketing-related content to combat this problem.

It’s not clear from Blodget’s presentation whether Business Insider is doing much of this, although he does say that social “is not the be-all and end-all” for digital news sites, and that the importance of social as a referrer of traffic is “grossly overstated.” And it isn’t clear what the site is doing instead of social or native advertising — which makes it almost impossible to say whether the company is financially healthy or not.

Huge pageview or readership numbers are nice to have, but they are not enough for a business in and of themselves (just ask Tumblr, which has 20 billion pageviews a month and yet is still facing questions about its business model) unless of course you are planning to flip your business to someone much larger who already has a business model. Business Insider is going to have to answer those kinds of questions somehow, whether Blodget wants to tell us the answers or not.

Post and thumbnail images courtesy of Flickr / TechCrunch

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We’re not just talking about digital advertising — Berg estimates mobile will be 15.5 percent of the total online ad spend. Rather, we’re talking 4.4 percent of all ads, whether they’re shown on TV, staring at you from a billboard or embedded in a website. What’s more, Berg said it was careful how it quantified “mobile.” Ads you view on tablets or other optimized browsing devices don’t count. This would be strictly adverting and marketing that appears on the mobile phone.

In real numbers, Berg estimated that mobile ads and marketing comprised a €3.8 billion (U.S. $5 billion) market in 2011, dominated by Google’s AdMob and Apple’s iAd platforms. But Berg is predicting that number will grow by a factor of five into a €19.7 billion market in 2017.

“Consumers are currently devoting a quarter of their media consumption time on mobile devices, yet the channel only attracts slightly more than 1 percent of the ad dollars,” Berg Insight Telecom Analyst Rickard Andersson said in a statement.

Of course, five years is a long ways out, and the track record on such long-term prognostication is mixed. But if Berg is right, that’s only good news to a company like Facebook which has found of its traffic and customers moving to mobile platforms but only recently began advertising on the phone.

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The company, which is best known for measuring TV audiences,  is now backing Pereg Ventures, a new venture capital firm that plans to invest in startups in the U.S. and Israel in market intelligence and advertising.

As part of the arrangement, Nielsen is taking a minority stake in the VC and its executive vice president for global business development, Itzhak Fisher, will serve as a partner and chairman for Pereg.

The venture firm will operate independently of Nielsen, but will use Nielsen insights and, Fisher told Crain’s New York that Pereg will help Nielsen focus on technology that helps marketers close the gap between “watch and buy.”

“You have the ability to get much better ROI for your advertising money [with these tools], and these are the kinds of services Nielsen is getting into,” he said.

While it’s clear that people increasingly consume all kinds of content on all of their digital devices, advertisers are struggling to monitor that behavior and reach them most effectively. The approaches to analytics are slowly changing – in October, Nielsen introduced its new Cross-Platform Campaign Ratings to measure the number of people who saw a campaign on TV and digitally and, last month, comScore unveiled a new set of metrics that considers mobile and traditional web traffic. But it’s still early days and Nielsen’s hope is that entrepreneurs and startups will be able to help them give marketers and edge.

It’s expected the Pereg will raise $50 million and invest in about 15 startups that are beyond the early seed stage, Crain’s reported. About 80 percent of the investments will be domestic, with the remainder in Tel Aviv – a hotbed of digital innovation, especially in ad tech.

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“Here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!” — The Red Queen, Alice in Wonderland

When it comes to the evolution of newspapers in a digital age, the New York Times is clearly something of a bellwether — and in particular, a sign of whether paywalls can (or can’t) make up for the ongoing dramatic decline in advertising revenue. Unfortunately for anyone in the industry who was hoping for a definitive answer, however, the paper’s latest financial results are a mixed bag. Subscription revenue rose, but both print and (perhaps most disturbingly) digital advertising continued to fall, raising the question of whether the Times will ever be able to close that gap, or whether it will have to become a much smaller and primarily reader-financed business.

The paper has already crossed the crucial point at which revenue from readers — whether through print subscriptions or digital subscriptions — has eclipsed the revenue the paper gets from advertising, a transition that other newspapers such as the Financial Times are also quickly approaching. But as more than one person has noted, there are two ways to reach that point: one is to have your subscription revenue increase, and the other is to have your advertising revenue decrease. Both of those are happening at the Times, and the only question is which one will slow down first.

Print ad revenue still falling, but digital down as well

As my colleague Jeff Roberts reported, overall advertising revenue for the company — which includes The Boston Globe — declined by 8.9 percent to $182 million, with print ads down by almost 11 percent and digital off by over 2 percent. For print, the story was the same as it has been for the past few years: continuing double-digit declines in real estate ads and other key classified categories that used to be bread-and-butter for newspapers. For digital, however, the picture was less clear. A spokesman for the paper said the drop in digital advertising was a result of:

“The challenging economic environment, ongoing secular trends and an increasingly complex and fragmented digital advertising marketplace.”

On the company’s conference call with stock analysts, the company tried to explain what one analyst called the “shockingly bad” advertising numbers, blaming “an abundance of inventory” and “efficient buying methods such as programmatic buying” offered by search engines and large advertising portals like Google and Yahoo. In other words, CPM rates — what advertisers are willing to pay for every thousand viewers of an ad — are continuing to fall, and the New York Times seems unable to shore that up at all (at least so far).

Subscription revenue was a much nicer story, since it rose by 7.4 percent to $235 million, but at least some of that has come from higher prices for the print product as well as an increase in subscribers to the digital product, where the paper now has 566,000 paying readers (although it’s not clear how many of these are subsidized in some way by discounts, etc.) And even though the boost in subscription revenue amounted to about $16 million for the quarter, that was still less than the $18-million or so drop in overall advertising revenue. So one of those factors is still falling faster than the other is rising.

The risk for the Times — and for a growing number of other newspapers that are making a similar bet on paywalls as a solution for their problems — is that advertising revenue could continue to fall, and even pick up speed, but the same probably can’t be said for the rise in subscription revenue. At some point, the number of people who want to subscribe to either print or digital will stop rising so quickly and begin to level off, the only real question is when.

A paywall can also reduce advertising revenue

There’s related risk with a paywall that the NYT and other newspapers face, but it’s one they don’t talk about much, and that is the effect that charging readers — which necessarily involves pushing some readers away — itself has on advertising. The Times has said that the decline in digital readership (and therefore the potential impact on advertising revenue) has been relatively modest, but results from comScore suggest otherwise: the numbers appear to show that pageviews have fallen by about 15 percent and unique visitors by almost 20 percent.

Newspapers like the Times could theoretically argue that each of their visitors or readers is much more valuable because a large proportion of them have paid to view the content, but it’s not clear whether advertisers will buy that argument, or be willing to pay higher rates for the privilege. It could be worse for the New York Times, of course — it could be reporting results like McClatchy, which saw both circulation and advertising revenues decline. But the question of what the NYT does as ad revenues fall and subscription revenues slow remains to be answered.

It’s true that no one is really doing a booming business in digital advertising right now, even Facebook, because the business is in the process of being disrupted. That’s why it would be nice to hear about how the Times is trying to change the way it does advertising as well as resting its hopes on a paywall — which is part of the reason why I think that if a paywall is your only strategy, you are probably doomed to be a much smaller business than you are now.

I’ve argued in the past that a membership model that provides added benefits for valued readers — whether it’s ebooks or live events or some combination of such features — is a better approach than a paywall, and the experience of some publishers such as The Atlantic seem to indicate that this is so. To me, newspapers like the Times would be better off trying to get to know their readers better so that they could offer them advertising or other features, rather than simply hitting them with an undifferentiated paywall.

In the end, newspapers watching the Times have to ask themselves not just whether they can duplicate the short-term revenue success of the paper’s paywall (which some or all of them may be unable to do), but also what happens when that still doesn’t make up for the decline in ad revenue.

Post and thumbnail images courtesy of Flickr users jphilipg and Flickr user Giuseppe Bognanni

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To address that, the company last year launched a full-service marketing platform for local businesses and today LocalVox is announcing that it has raised $7.4 million in Series A funding from Talus Holdings, a local media holding company backed by Blackstone affiliate GSO Capital Partners LP.

With the new funding, LocalVox said it plans to expand from New York and Hartford to the top 20 markets nationwide, as well as build out its products and strengthen its network of partners.

“Marketing, we feel, is one of the most misunderstood terms in business for SMBs,” said LocalVox co-founder and CEO David Pachter. “SMBs think about marketing inherently as something that big companies with marketing budgets and marketing directors do and not something that’s important for local businesses. What we’ve built is something that makes marketing an essential tool for local businesses.”

On a mostly subscription basis, LocalVox helps SMBs do everything from updating their own websites and publishing email newsletters to posting on and monitoring Facebook and Twitter to establishing presence on Yelp, Foursquare, Google Places and more. The company also enables clients to market across its network of publisher clients, which include Manhattan Media properties, CT1 Media (a Tribune company) and other local publishers in New York and Hartford.

Local online marketing is certainly a growth area – research firm BIA Kelsey expects it to grow from $27.1 billion in 2011 to $42.5 billion in 2015 and tech giants like Facebook and Google have repeatedly expressed their interest in going after more local dollars. While other companies offer solutions targeting specific channels in local marketing, LocalVox said it’s the most comprehensive platform for SMBs. But particularly with its recent acquisition of social marketing firm Wildfire, you could expect Google to offer a wider range of advertising products to SMBs. Other startups, such as ThriveHive and MarketMeSuite, similarly target SMBs with marketing platforms.

LocalVox said the 50-person company has hundreds of clients, including Whole Foods and Chelsea Piers in New York, and plans to further expand its mobile products in the coming months.

Image from Zinchuk_Oksana via Shutterstock.

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The redesign expands Vibrant Media’s in-text ads – which pop-out when people mouse over double-green underlined words in an online article – to “in-context” ads that also surface under relevant editorial images. The new strategy also includes additional visual cues for consumers to signal that an ad is about to pop up and a wider range of ad formats for marketers.

In an interview, Irvine said the redesign is meant to make Vibrant Media’s ads more transparent and interactive so that the company can win over consumers and, ultimately, advertisers.

“Consumers are becoming more demanding in their expectations about advertising – especially digital advertising,” she said. “They want control and choice with how they interact with ads and they would also like to see more engaging ads with higher production value.”

She also said that even though people are learning to ignore certain parts of a web page and fast-forward through TV commercials, through social media and other digital channels, users are also learning to interact with advertising.

As part of the redesign, users won’t just see double green lines under ad-enabled text, they’ll also see a new icon (a double-facing arrow) that Irvine said serves as an extra signal of an upcoming ad. After a user mouses over the ad-enabled text, they’ll first see a progress (or countdown) bar, which gives them an opportunity to disengage, before the ad opens. The process, Irvine emphasized, is user-initiated, as a user needs to hover over the text for a little under three seconds before it activates (in Europe, it’s three seconds).

The new design also features a full-screen rich media ad unit, called Mosaic, that includes branded videos and photos, social media commentary and the option for users to participate in social conversations.

Irvine said about 4 percent of users stay on the countdown bar to launch the video and then 40 to 50 percent of users complete viewing a 15 second spot.

Given consumer “banner blindness” and the ease with which Internet  users ignore web ads, Vibrant Media’s in-context ads certainly give brands a better shot of getting noticed. And their expansion in rich media makes plenty of sense given the growth in online video and social media marketing. The risk is that consumers could continue to find the in-context approach to be too obtrusive. The extra signals do give consumers extra time to stop an ad before it fully opens but, within three seconds, a consumer could still accidentally hover over ad-enabled text and feel annoyed by the extra activity on the screen.

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But Savveo, a Charlotte, N.C. startup, has raised $2 million to help it tackle a different opportunity in local advertising: providing an online marketplace for buying all kinds of traditional advertising, from out-of-home and print to radio and television.

“The virtual world has done a fantastic job to drive efficiencies,” said Shafi Mustafa, CEO of Savveo and founder of OverstockAds.com, a company that sells remnant advertising space for traditional media. “But in the real world… that ad market lacks efficiency and his highly fragmented.”

The $2 million Series A round included several U.S. and international investors including David Jones, the CEO of cloud company Peak 10, Tim Biltz, CEO of fiber-based service provider Lumos Networks, Australia-focused fund BayCrest Capital and others.

Given the momentum behind mobile and online local advertising, it seems like a curious time to invest in a platform for offline advertising. But Mustafa insisted that “the death of traditional media has been greatly exaggerated.”

BIA/Kelsey, a local media and advertising consultancy, expects mobile and online media to account for the largest increase in local ad spending, nearly doubling to $21.8 billion between 2011 and 2016.

But, the firm also projects that as local advertising expands about 14 percent to $151.3 billion by 2016, traditional media like television and radio will continue to remain relatively strong. In the next few years, traditional mediums like television, radio and out-of-home aren’t expected to experience the same dramatic growth as digital media, but they are still projected to increase incrementally.  In 2015, BIA Kelsey estimates that three-quarters of local ad dollars will still go to traditional media.

The field is incredibly fragmented – it includes more than 34,000 local media outlets nationwide, by Savveo’s estimation. But the company’s bet is that, if it does the heavy lifting of consolidating those outlets, it can profit by providing local business and agencies a single platform for pricing, buying and tracking advertising across those mediums. While other sites might provide an online marketplace for ad space in a particular medium, Mustafa said they’re not familiar with sites that provide cross-medium buying opportunities.  The company said its platform, which is set to launch in 2013, will include both mechanisms for buying and pricing, as well as research and planning tools.

(Image by Roman Sigaev via Shutterstock.)

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For the first time, the U.S. will spend more on mobile advertising than any other country, including Japan, which had been the reigning leader, eMarketer said Wednesday.

According to the research firm’s forecast for worldwide mobile ad spending, advertisers will spend more than $6.43 billion globally in 2012, with the U.S. contributing $2.3 billion and Japan following with $1.7 billion.

“The big underlying reason is that smartphone growth and mobile Internet usage is growing very quickly in the U.S. and  you’re starting to see a tipping point where a majority of people are starting to use smartphones… or mobile Internet,” said Clark Fredricksen, vice president of communications for eMarketer. “That’s causing a lot of interest from advertisers.”

Additionally, he said, the increase in mobile spending is stemming from the fact that many advertisers in the U.S. already spend heavily in digital and are moving more money into mobile and from consolidation among U.S. ad publishers (for example, Google’s purchase of AdMob and Apple’s acquisition of Quattro).

The research firm expects the U.S. mobile ad market to grow 96 percent in 2012, which is a decline from the 126 percent growth in 2011, but Frederickson said they expect growth to slow because the market is maturing.

Despite the booming interest in mobile advertising, it’s important to note that mobile advertising still accounts for just one percent of the total ad spend in the U.S. and worldwide.

In terms of global ad spending across all categories, eMarketer projects that total media ad spending will grow 7.4 percent this year to $542.3 billion, with help from a small bump from the Olympics, and decline next year to 6.4 percent. Next year, ad spending in China will reach $53 billion, surpassing spending in Japan for the first time, and placing it behind the U.S. as the country with the second highest amount of ad spending.

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