It is a significant step, though not as many seem to think unusual.
Afterall, Google started as a search engine, then monetized search, and finally introduced their own publisher program Adsense.
Lots of discussion related to the often reappearing Microsoft Yahoo deal mention that display advertising is highly lucrative, and Technorati are in a prime position to serve advertising to a very specific demographic of publishers – bloggers.
Technorati know exacty what bloggers are talking about on a day to day basis, so in aggregate they can offer publishers targeted display advertising, at least in theory.
Also it is important to understand that instead of selling the vast amount of data they have, they are using it to provide an added value service.
From the official announcement:-
Our first step was a private beta. We assembled a core of like-minded sites, founded to provide community and services to bloggers and to surface the best of blog content to consumers, and were successful in attracting advertisers to the network including: T-Mobile, Toyota, and Verizon.
These sites form the base of the Technorati networkâ€™s vertical content channels and reach an audience of 17 million (with that audience increasing very shortly with several other sites about to sign). Over the next several months, weâ€™ll be adding blogs from the mid and long tail within those verticals. Hereâ€™s some of whoâ€™s in so far:
The site itself is a little short on real information, so I thought I would try to pry some out of Tony Berkman from Blogcatalog. I was aware of some of the details at the beginning of March, but it has taken far longer than I expected for the news to finally emerge.
Andy: Hi Tony, thanks for taking the time to respond to my request to chat about the new Technorati Advertsing platform. Whilst I knew you had a deal with Technorati some time ago, it was felt best not to discuss it in detail.
Tony: My pleasure Andy
Andy: When did Technorati first approach you about their new advertising platform?
Tony: Around the beginning of January was when we started discussions. They started running ads on BC in February.
Andy: Up until that time Blogcatalog was primarily monetized using Google Adsense. Did you find Adsense was providing enough income to meet your growing development and hosting needs?
Tony: Exactly. AdSense was our primary income source. We do have a number of other sources such as premium membership and directory category sponsorships. For the first year of operation AdSense and these other sources of income enabled us to pay for hosting and developer costs. Around November 2007, BlogCatalog’s traffic exploded and bandwidth costs started to eat into the portion of income that we were using to fund development. At that point I started looking for ways to monetize the site that wouldn’t ruin the user experience.
Andy: So you decided to test Technorati Advertising?
Tony: Exactly. We entered into a relatively short term agreement so that we can see if it is beneficial and whether they can deliver on their promises. The contract term expires in November. It is really too soon to say whether we will continue after that time, but we will give them the chance to prove they can deliver.
Andy: When did you start displaying Technorati Advertising on Blogcatalog, and does it appear in all sections of the site?
Tony: We always want to avoid obtrusive advertising for our members, thus we currently display light advertising in the following sections
1. Directory Categories
2. Search Pages
3. Blog Detail Pages
And if you are a premium member, which costs $6 a month, all ads are removed from the site.
Andy: Can you elaborate a little on their performance?
Tony: The first few months were nothing to write home about as the Technorati team was getting their infrastructure together. During this time we were only displaying one vertical ad on each directory page. Recently though we have seen a move to higher paying ads that are more targeted to our audience – a win / win situation for both advertisier and publisher.
Andy: Whilst Blogcatalog gains very little mainstream coverage, it is quite a high traffic mainstream internet site with over 4M monthly pageviews. I assume that means Technorati are giving you a fairly decent deal?
Tony: We have a favorable split. Mainstream coverage is rather limited, however we certainly get a fair share of internet traffic. Traffic – BC is now closer to 9M pageviews though not all of those views are available to Technorati. For now, provided they continue to improve their offerings, Technorati is a great deal for us, and makes sense as we are able to monetize the directory withouth having to build up a sales infrastructure.
Andy: No yardsticks? Ah well… the other important aspect for any publisher is communication. Do they respond to emails?
Tony: Personally they are outstanding to work with. Their support has been first class. Though at the end of the day it comes down to whether it makes sense to have them representing our ad units, or whether it makes more sense for us to hire an ad team. There is always a balancing act and a desire to concentrate on core competence.
Thanks for taking the time to answer my questions, it is good to have some direct feedback from someone who has already been using Technorati’s new advertising platform for some time.
At this time I don’t intend running display ads (on this blog anyway) unless it is in the form of some specific sponsorship, though it might be more interesting for some niche sites.
Display advertising is much more suited to more mainstream sites with broader topics.
On the advertising purchase page for Technorati I also noticed the following:-
You can also enquire about Technorati Conversational Marketing, the next step in entering the global conversation on the web.
That could be PR service targeting bloggers, or maybe something akin to Social Spark.
Disclaimer – I do a little consulting with Blogcatalog