The Sponsorship Model for Bloggers

I have been advising a blogger on her negotiations with three publishers for the sponsorship of her blog which has, in a relatively short period of time, accrued about 250,000 page views a month. This blog has a lot of buzz and attention paid to it, and she finds herself in the enviable position of considering multiple offers.
She has not filtered her feeds through Feedburner yet, so she has no idea what her subscription stream looks like. All she has is a SiteMeter bug which gives her a rolling 30-day view of the traffic. Based on that traffic, the publishers are coming back with offers more suited to the existing page-view/CPM model, looking for fixed placement of their message, a subscribe-link for their print products, and promotions for their own RSS products.

She has tried AdSense and a CafePress store, but essentially isn’t making a dime from her efforts. The content of this blog is unique, and is not comparable to any other source. It also has a significant barrier to entry for a competitor to move in.

My theory on what places downward pressure on CPMs is the concept of “fungible” — a twenty-five cent word for anything that is easily replaced by something else. In media terms this could apply to stock quotes, wire news, anything that is commodity content which the consumer would be hard pressed to identify its origin based on its tone and substance. In other words, if I covered up the source of a story on Reuter’s website about Apple’s earnings and showed it to a reader next to a similarly disquised story from the Wall Street Journal on Apple’s earnings, would the reader be able to identify the source?

Assuming the answer to the rhetorical answer is “no,” then one can see how a CPM on such a site will always trend lower as more venues begin to produce and publish the content. In the end, the most unique content that a publisher can claim is probably the opinion side — hence the movement of the columnists behind a cost wall at the New York Times with the TimeSelect program.
The question is whether a page view of a blog should be treated on an apple-to-apples basis with a page view of a magazine’s website. One offer values my friend’s traffic at an $8 CPM — which translates to $2000 a month. Chump change in my opinion.

I believe she can, and should, do two things to get maximum value for her efforts. First, avoid any ad network like Federated Media like the plague. Federated acts as a rep for traffic, selling it and managing the insertion of ads based on a demographic algorithm, and then reporting the results on the back end to the advertiser. They take a significant chunk of the revenue in the process. Anyone who has participated in an online affiliate program — Amazon’s for instance — knows what thin beer such programs can be. Second, she may want to consider an auction system where she lets the potential sponsors bid for the placement. How she can accomplish this, well, it’s beyond me.
So, what’s the recommendation? I felt in 1995, and I still feel today, that some online content will have such high value, and be so unique, that their creators will be able to eschew the tyranny of metrics and pageview economics and offer their stuff on a flat sponsorship basis sold purely on the basis of time, selling a patronage model that essentially lets the sponsor bask in the glory of the content and perhaps receive some business on the side. This is the PBS Nova model. Is the General Motors sponsorship of a PBS show an ad or a statement of corporate social responsibility or both? Expecting a low-traffic, high value content site to incorporate the kind of metrics and accountability and ad ops that a traffic behemoth has is ridiculous.
The hard part for my blogger friend who is on the verge of making some serious money, is how to negotiate these deals. She has published several books and has a longstanding relationship with a great book agent … who hasn’t the faintest idea how to represent her online efforts. There must be some agents out there who are emerging as strong negotiators on the behalf of online artists and talent, the question I pose is who are they and what are their terms?

Am I being naive in believing some web content stars can and should expect a sponsorship model, and that their efforts and pageviews are vastly different than a standard site’s?

Author: David Churbuck

Cape Codder with an itch to write

0 thoughts on “The Sponsorship Model for Bloggers”

  1. Good Lord,

    this is the best professional and most well reasoned discussion of building a commercial blog entity that I’ve ever seen anywhere on the web.

    In answer to the end question in your next to last graph, I wonder whether O’Reily or Gladstone’s Waterside ssociates are leaning in this direction?

    Does your friend have numbers from her blog’s TPS report yet?
    Eggcellent Post, Smithers!

    Jim Forbes

  2. Great post – and YES! I surmise there are people in the niche that should see sponsorship of her blog as an affinity buy, well worth putting their name on regardless of what she’s got to say.

    That belies our experience with RT – where we really should have had industry heavyweights throwing money at us. Is this something she’s going to really need to sell (or have someone competent sell for her)?

    We whine day in and day out, from both sides of the fence that the pageview model is broken, that cpm and cpc advertising isn’t the answer. Perhaps the market is ripe for a new way to sponsor.

  3. So let’s call it the PBS model (not to be confused with the “NPR Model” where the blogger or publisher asks for PayPal donations) where big marketers put up some serious cake for an exclusive ownership and take whatever traffic comes there way as a side benefit, not the main benefit.

  4. damn, i need to start working on ways to get more ‘the Diary’ more page views so I can quit my day job. I’m guessing stories posted from my chihuahua isn’t what sponsers are looking for. Not sure what the right answer is, but you’ve given me something to ponder today.


  5. this is definitely a subject near and dear to us at RedMonk, as this is somewhat similar to our own model. our “sponsors,” such as they are, receive tangible traditional services in return for payment – consulting hours, press services, and so on – but ultimately they’re “sponsoring” free content for the variety of communities we serve.

    i’m not sure what the reception has been for your blogger friend, but we’re finding that concept very difficult for some clients to grasp. even when we’re simply trying to give them additional public credit for something they’ve *already* paid for.

    i’m less pessimistic about the long term outlook here, given that the medium is quickly proving to be one of choice for even the mainstream, but in the short term the average would-be sponsor is having a tough time making the leap of faith.

    in our experience, anyway. best of luck to your advisee, and let us know if there’s anything we can do to help.

  6. Well you shot down my first thought,Federated Media. When I read Guy Kawasaki’s post that he only clocks two grand a month or so from adsense,I didn’t feel so bad about my paltry earnings. I think blogs may end up running you tube commercials or being sold completely to make the money you are talking about here. Hate it or love it, the gossip blog Perez makes his money via ad placements, and has come out from behind his blog to be a celeb and fashion world darling as well.

    Go Bears!

  7. Here’s an interesting sponsorship model which focuses on some new Euro Banking regulation. Not a blog as such but close.

    This suggests to me that those blogs that attract a certain niche of reader could attract serious sponsorship money to them. Let’s hypothesize that you had a blog that was read by just 1000 buyers and influentials of a very specific area of banking technology. Then vendors selling solutions would be natural sponsors.

    Perhaps those blogs that have evolved and have 250,000 readers are more difficult for a sponsor to evaluate and that results in no sponsorship. B2C has many outlets in the broadcast medium. B2B is not well served by broadcast at all, so nanocast sponsored models like that above are probably far better.

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