@ Networked J-Summit: As The Blogosphere Proliferates, And Inventory Grows, Expect CPMs To Drop

The ability of citizen journalism projects to attract self-sustaining ad revenue is still an open question. A morning panel at the Networked Journalism Summit conducted by the City University
of New York Graduate School of Journalism and held at the nearby New York Times (NYSE: NYT) Center, highlighted the potential and the limits that currently exist for local blogs to attract advertising.

Henry Copeland, founder and CEO of BlogAds: Putting it bluntly, Copeland said he tells bloggers that he can’t guarantee they’re going to make a living at it. This is more true as the blogosphere becomes increasingly crowded and differentiated. “We have 1,500 bloggers and we are sometimes able to help them make money – how many are making a living? I wouldn’t say hundreds, but I would say more than dozens.” As for the impact the growing number of bloggers will have on advertising: “CPMs are likely to go down because there’s more inventory and there’s more and more ways to slice and dice it.” Copeland did say that advertisers are becoming more comfortable with blogs as they develop their own brand identities but it’s the unpredictability of commenters that cause advertisers to recoil. At the moment, to reduce marketers apprehension, bloggers will have to promise advertisers that their messages won’t have to appear on pages that have comments on it.

Jeff Burkett, director of Sales Development at Washingtonpost.Newsweek Interactive: As we noted back in July, the Washington Post (NYSE: WPO) has sought to enhance its metro coverage with hyperlocal content from area bloggers. It’s still in the experiment, learning stages, Burkett said, voicing a degree of uncertainty about the levels of ad success bloggers can achieve. For the moment, the main benefits are the mutual promotion WaPo’s bloggers share with the main site. He demurred when asked about the kind of CPMs its bloggers are getting, saying only: “We have solid double-digit CPMs. But aside from that, brand advertisers are not interested in how many clicks do they get. What they care about is ‘Am I reaching my target audience?’ We have higher CPMs on our own site, there’s more control. The only way to survive is to have what we have or what Henry has, which is allowing agencies to efficiently buy across thousands of sites. And that’s what we offer.”

Stephen Smyth, VP, mobile and emerging media, Reuters: The use of video and developing systems that provide better targeting is where Reuters (NSDQ: RTRSY) is concentrating its blog-related ad efforts. “It’s gotten easier. When we started this two years ago, many sites were so small, they didn’t know what their demos were composed of. But we’ve come a long way since then. We’re now getting to a place like the Washington Post, where we’re creating an ad system that can tap into that volume and insight about their own audience and produce better programming and info that’s useful to advertisers, that will help target brand campaigns in particular.”

Rick Waghorn, My Football Writer: Waghorn emphasized a personal approach to building ad revenue, in particular, focusing on local merchants who can have a more direct relationship to the blogs readers and its content. He expressed some disdain for Google’s AdSense, which he felt isn’t always accurate in matching the content and location of a blog and its ad system. “We’re sustainable. We lost money the first year, made about $70,000 last year.”