PayPerPost Receives $7M Additional Funding & Launches Direct Marketplace

 

Just 2 weeks ago PayPerPost launched their PayPerPost Direct service and I wrote one of my typical in-depth reviews about why I believe that this new offering really changes the paid review landscape.

Not everyone agreed with my review and there were 4 major arguments against using the service from various corners of the blogosphere.

  • PayPerPost don’t provide a marketplace for their bloggers using PayPerPost direct, and that without a marketplace it would be hard for a blogger and an advertiser to connect.
  • Bloggers should sell direct – supporter of this argument suggested that the 10% additional fee that PayPerPost added ontop of what a blogger receives was excessive, and it would be better to have an advertising sales page, and handle any transaction directly
  • The icons provided by PayPerPost were ugly
  • No High Paying Advertisers – it was believed that all PayPerPost advertisers were “low budget” and that the service wouldn’t attract major brands with deeper pockets.

$7 Million in New Funding

Companies don’t receive a second round of funding unless investors have taken a very close look at the future of a company, and their ability to meet goals and deliver based upon their business plan.

Tomorrow PayPerPost will officially announce $7M USD Series B funding led by Draper Fisher Jurvetson whose Managing Director Josh Stein joins the board, and additional participants Inflexion Partners, Village Ventures and new investor DFJ Gotham.

With Series A funding last year of $3M plus initial seed funding by the founders, that brings total investment of over $10M USD.

PayPerPost mean business and are in this for the long haul, and with that much money in the kitty, they can afford to be generous to their marketplace of bloggers.

I notice Michael Arrington has already posted his views on the new round of funding. He seems to think the fact that the same investors are involved this second time to be a sign that other investors want to keep their hands clean.
That is possible, because Michael has been giving them constant bad press, and who knows, maybe the numbers don’t add up for other investors.

An alternative could be equally well said that the current investors don’t feel the need for a lot of fresh blood on the board of directors, are happy with the ability of PayPerPost to deliver based upon their development schedule, and they don’t seem to be having problems finding bloggers or advertisers.

Michael has also got a podcast available with Ted Murphey, CEO of PayPerPost and Josh Stein, the new board member.
Update:- I should have checked out the link first – it is actually the old podcast from back in November, worth listening to if you haven’t heard it, though a lot of it is now out-of-date.

New PayPerPost Marketplace

Time for some pictures:-

The initial PayPerPost Marketplace view is unfiltered. It allows you to sort through PayPerPost’s 28000 bloggers either by price in ascending or decending order, or by “tack” which is based on the rating a blogger has received from advertisers.

It should be noted that posties (the bloggers) who have been very active in the PayPerPost system prior to the launch of PayPerPost direct are more likely to have higher quality ratings at this stage. New bloggers who have been attracted to PayPerPost because of the new direct service may have been writing reviews for competing services. I would think it will be a while before this situation becomes balanced out, but it is great for those that have been supporting PayPerPost as bloggers for almost a year.

PayPerPost Marketplace Unfiltered

So lets apply a filter and see what we find, in this case we will go for primary categories Business and Technology, and set the filter between $50 and $200.

PayPerPost Filtering

The result for that filter is 30 bloggers sorted in alphabetical order (though you can still sort by price or quality), who match the category and price choices.

PayPerPost Filtered Results

The display only shows a snippet of information about each blogger, but it is possible to click through to a profile for more information.

Power User Tip For Posties – You will notice in this next screenshot that I did some experimentation, and that you can use some HTML in your description. Hopefully that will remain because it helps you improve your presentation.
Also note in the preceding screenshot that my snippet displayed isn’t very inviting. It will be important to optimize you first paragraph to encourage people to click through to a full description.

PayPerPost Profile

Statistics such as Pagerank and Alexa Traffic are available on the profile page – Technorati Authority is not used, because PayPerPost made the decision recently not to use Technorati ratings, because they can be fairly inaccurate. As an example a theme designer could have a much higher authority with Technorati than major blogs such as Techcrunch, Engadget and BoingBoing.

You will also note that tags are displayed, but there currently isn’t a way to sort blogs based upon tagging – hopefully this is something that will be added in the future. I also hope they move away from having bloggers enter space separated tags, and them being displayed comma separated.
It would be much more accurate to have comma separated tags being entered, and then displayed without adjustment. This would allow tags to be multiple words, such as used by Technorati.

Lets look at the other shortcomings raised 2 weeks ago by other bloggers

Bloggers Should Sell Direct

I thought in my review of PayPerPost Direct 2 weeks ago that orders that will be coming from a new direct marketplace would have a higher charge for processing payable by advertisers. It looks like that is currently not going to be the case.
A 10% fee for order processing, technology, and providing a marketplace and escrow service really isn’t a major concern, especially with the way PayPerPost promote their bloggers to advertisers.

I imagine the level of blogger promotion is set to increase, and that bloggers will be rotated through the system.

The Icons Are Ugly

You could always include them on an advertising sales page rather than in your blog sidebar, and that might be an option I will consider in the future.
The system also allows you to use your own custom icons, or just a text link.

I think a more valid argument, which I don’t think I have heard anyone raise is the ability to customise the popup when someone clicks on a link.

If I only want to allow neutral tone orders, I don’t want any other option available to an advertiser, and I would also prefer to give links in an editorial context, and not have advertisers specify link text – I have a fair amount of SEO experience, and I am not going to give people junk links, but I want to have the choice.

No High Paying Advertisers

In the press release going out tomorrow, PayPerPost confirm they currently have over 6500 advertisers, and those advertisers have ordered, and PayPerPost have delivered 125,000 blog posts – that is probably a turnover of over $1,500,000 in the last year. Not huge by any means, but that number is increasing. I am sure more than $1m of that is in the last 6 months.

Zookoda

PayPerPost purchased Zookoda not too long ago and that business has a lot of potential if they expand into a similar territory as that previously occupied by Feedburner.

Feedburner were recently acquired by Google

Ted, Dan & The PayPerPost Team

Investors invest in people, not just ideas. Dan is one of the investors in PPP, but in many ways is also one of the marketing team, and highly dedicated.

Ted is charismatic and smart, and doesn’t seem phased by anything. Whilst many startups are founded by geeks and don’t have a business plan, PayPerPost was founded by a marketer who saw a need for a certain product in the marketplace.

My blogging friend Jim Kukral frequently calls Ted a Marketing Genius and PayPerPost have certainly capitalised on the controversy that they have caused since they were launched.

The PayPerPost team seem to be very dedicated, and you can tell if you watch any of the videos on RockStartup that they are a well oiled machine, and having fun and delivering development milestones like clockwork.

Calling Microsoft & Yahoo

PayPerPost is a disruptive business model, not just to the blogosphere, but also to advertising. It could be argued that it is also disruptive for search results, but generally it is successful companies who offer good products who can afford to advertise on a large scale, and bloggers who work for Microsoft or Yahoo, and even Google effectively promote their own company products all over the blogosphere whenever something is launched.

Surprise surprise, there are some major companies who offer great product who don’t already have 1000+ bloggers on their payroll, and they would like bloggers talking about them as well.

If Microsoft or Yahoo buy PayPerPost, it would be extremely disruptive to their major competitor, Google, both by offering an advertising model Google can’t touch because of prior criticism (though not official), and one that affects Google’s search quality (supposedly, though there is very little proof)

6 months or less to a major acquisition?

Expect more information on the PayPerPost blog tomorrow and here is a direct link through to the new PayPerPost marketplace.

Update:

Think I covered everything? Think again…

Kat for instance pointed out how well PayPerPost are promoting their bloggers, with the rotating spotlight on bloggers at the top of the bloggers page in the new design. She also highlights some very interesting demographic information that is currently available.
To give you some idea of the misconceptions among the tech sector that “mommy bloggers” are not a worthy audience for advertising, I know Kat gets more traffic than I do every month.

I think the Forbes reporter has been reading Techcrunch too much, and should maybe vary his reading habits more. Whilst the coverage is reasonably accurate on the facts, there is a definite negative slant without looking at what really happens in the blogosphere by employees of INC500 companies who happen to be bloggers.
Colleen again was being misquoted by the press, but in what must be a fairly unique situation, actually gained 2 links from Forbes.

It looks like Jules has found the press section on the new PPP site and is taking advantage of the photos provided.

Update2:

Compensated reviews can be of high quality, all you have to do is take pride in what you write. This article by SapphireKnight in a sponsored post for PayPerPost about the latest funding goes into detail about the difference between the original PayPerPost Marketplace and the new Direct Marketplace.

 

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Comments

  1. says

    OK well here’s a thought. PPP reviews could be viewed by Big G as being paid links under their more clearly defined guidelines regarding link policy. Tagging the “nofollow” rule would alleviate that problem but, as a fellow believer in the power of DoFollow, how would that affect things?

    • says

      Mike I am not sure that is really clearer.

      I have reported myself some time ago for paid links although I believe my links have more authority and editorial control than might be possible for a reviewer in a paid directory.

      Matt Cutts has said the quality paid directories are OK, because you are paying for the review process and there is no guarantee of inclusion.

      Based upon what I have seen, most bloggers are more likely to link to another blog with “here” or “click here” than an SEO friendly link that is good for a reader, not just for search engines.

      Anchor text helps the search engines know what a page is about.

      PayPerPost allow advertisers to specify anchor text probably for a number of reasons.

      1. It cuts down on irrelevant anchor text that is bad for users
      2. Being able to change anchor text in theory allows some split testing for more popular terms. Maybe a phrase linked will get more clicks than 2 keywords.
      3. PPP is a large marketplace – it is important to keep administration to a minimum, so the fixed criteria are much quicker to determine acceptance.

      An employee of Google can write 50 words about a new service and link through.
      An investor in a startup can link through to their new investment every day

      Someone writing a comprehensive review about a service with a small amount of compensation has to use nofollow on the links – sorry I don’t accept that logic

      • says

        I know they haven’t made it that much clearer but they’ve now spelt it out on their official guidelines rather than just on Matt’s blog so it’s pretty obvious that it is now a lot higher on the Big G Agenda for world domination .

        As you say in your linked post, they’re on a slippery slope with this particular train of thought but by adding it to their webmaster guidelines it’s obviously not something that is going to go away.

        Did you ever get a response from them?

        • says

          Yes it has been updated, though they are not being specific.

          Google have a monopoly position for both search and monetization.

          In many ways that “official” position is more FUD (Fear, Uncertainty, Doubt) and not only affects paid posts and reviews, but what I want to create with my startup which I would class on the whiter side of grey.
          I could possibly get investment despite Google, but it would always be tainted by the Google situation.

  2. says

    Okay you have me there, but it’s already hard enough to find posts I can do with 28,000 posties! Must work on a PR5 more than ever now!

  3. says

    Any word on how they are planing to improve the followup/reminder system (much needed in my opinion)for the new sign usp from RMP pages? I have referred few bloggers but none of them took on the “opportunity” that referred them there. The strange thing is that when I first signed up for Pay Per Post I was not qualified for any other opportunity before I reviewed the post that sent me there. Good post. They are definitely moving in the right direction, in my opinion.

    • says

      I have a few (5 ?) signed up as well who haven’t taken their opportunity, and I know you found it difficult to navigate.

      I am not sure if it has been improved, I would hope they would send out email reminders.

  4. says

    I think the strength of Pay Per Post is that it’s structured to be able to provide advertising for both larger and smaller advertisers. Both exist, and there is money to be made on both and I’m betting Pay Per Post will make money on the full range of advertisers.

  5. says

    No Andy. That was just a pic that Ted sent me one night after we found each other on MySpace and started cybering. HA!

  6. says

    This was a great review of PPP. I’ve goofed with their service some but I don’t like having to put their mess in my source code and template. Review Me doesn’t do that.

    • says

      The code you need to include can be added to your footer, and isn’t a requirement for PPP Direct (but maybe for the marketplace – I am not sure)

  7. says

    Good Post Andy -

    Years ago I used to manage small mutual funds and a couple hedge funds and also have many associates who raise smaller amounts of capital like PPP has just done.

    In my opinion this is a terrible investment. Granted, I’m not an internet or SEO expert, but clearly Google is not a fan of paid links.

    I think this is on the fringe of paid links and it will not surprise me to see G decide it doesnt like it.

    Will PPP then need another 10M to revamp its business model everytime Google decides it doesnt like it?

    Personally, I think G has its mind made up about anything but natural links. Now you and I both know there are ways around that for the individuals, but not for companies who must advertise to earn revenue like PPP does.

  8. says

    Interesting stuff. Not really paid much attention as I don’t want to use them for my blog, but I can see the advantage from an advertiser postion.

    What would be interesting to see is some advertiser to drop $1k on a range of blogs in a specific niche and then leverage the buzz from dominating the niche. In fact, if I was to readjust my budget that is exactly what I would do.

    It’s a shame I am such a tight git.

  9. says

    You did not mention in your post why I would go for PPP direct instead of ReviewMe. ReviewMe takes a larger cut, but that aside, what other incentives?

    • says

      Hamlet I think a lot of that I covered in my previous post on PayPerPost Direct which I did link to a couple of times in this writeup.

      I still have a ReviewMe profile, and a Sponsored Reviews profile but before PayPerPost direct it was no longer converting, partially due to a significant bug in their system.

      Do you think there is a difference for an advertiser in paying $143 and $260? I certainly do.

  10. says

    Great Post. I have been following PayPerPost since they first launched. I’ve used them in the past as an advertiser, but wasn’t much of a fan from the blogger side since they usually paid out so little. However, their recent changes have made me consider becoming a PayPerPost blogger.

  11. says

    Thanks Andy for the link. I knew you beat me again. :)
    But I don’t want to tag along all the time. Does not look good on me.

    I wanted to do more but the requirement for the Press Release make my post too long. So, I have to make some short cut.

  12. says

    Great post Andy.

    Just a terminology suggestion. I believe PPP is using the term “directory” instead of “marketplace” for their advertiser-selects-blogger listings. The PPP Marketplace remains as the place full of advertiser opps; whereas the Directory is full of blogger descriptions. Make sense?

    Thanks for the coverage!

    • says

      PayPerPost Direct Directory didn’t work for me in a headline and the terms used by competitors is marketplace because you are selling something.

      In some ways it is similar to why some of my posts have included PayPerPost with spaces between the syllables such as “Pay Per Post”.

      I know the company name is PayPerPost, but I can rank easier for one than the other, and the version with spaces does get search traffic.

  13. says

    Hey Andy, thanks for the link.
    Yeah, the whole mommy blogger thing gets on my nerves.
    I’m a stay at home mom, a single mom at that, but I have just as much traffic as the “big guys” who are slamming mommy bloggers.
    They don’t seem to realize that moms are the ideal way to market a product.
    Why?
    Because we ARE the consumers for our families, we ARE the ones who tell all of our friends and families if a product is good or not.
    We have been doing word of mouth marketing since the dawn of time.
    Those diapers any good? No, they suck.
    Is that HDTV good, yes, it rock.
    We buy and use more of the products that people sell more than any other sector.
    There may be more men in the PPP system according tho those demographics, but the mommy bloggers are racking up the visits and hits.
    Don’t count us out as having only a handful of visits a month at all.

    • says

      You are welcome to the link.

      Whilst I don’t want to sound sexist, I certainly know who makes the majority of the purchasing decisions in my own household (yeah my wife).

      I would actually question the demographics slightly as well. Whilst more men might have signed up, from what I have seen among posties the women (in general) are more active.

      That could be partially due to the kind of opportunities available, though there are certainly a number of opportunities I could have written something about, I just didn’t have time, or I would just prefer someone else get some money.

      It is strange in many ways, I am one of the biggest supporters of the PayPerPost business model, yet one of the lowest earners.
      I don’t have to be making a lot of money from something to support it.

  14. says

    I am a bit disappointed with the quality of advertisers through PPP of late. It seems plenty of movie advertisers are featured, plus several ads about The Police. I haven’t stuck the widget to my main blog yet, but I’ll consider doing so when the market heats up.

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