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 network’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, we’ll be adding blogs from the mid and long tail within those verticals. Here’s some of who’s in so far:

• blogtalkradio
• Blogcritics
• blogcatalog
• BlogTV
• GeekAlerts
• GPSMagazine
• NerdApproved
• Technabob

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.

My Take

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

But that has changed somewhat overnight

OpenAds are adding a free hosted version of their sofware, though it is currently in closed beta.

Even with the improvements they made with version 2.4, and certainly those changes were critical for this move to make it more resource efficient, they are going to need some hefty infrastructure in place to serve all the ad units for multiple sites.
So that is one area the new series b funding by new investor Accel Partners will be used.

The big questions are who they are going to decide to go up against, and how are they going to generate revenue?

OpenAds Competitors

Potential Adserver competitors on the upscale side include:-

24/7 Real Media Open AdStream
Advertising.com ACE Serve
Engage AdManager
ValueClick MOJO Publisher
DART (DFP)
Atlas
Google

But at the same time they could also be looking to compete with or effectively wipe out the lower end market

Hitsconnect
Hypertracker
Adminder

AdSense Detective (monthly fee)
AdSense Gold (one time fee)
AdSense Tracker (one time fee)
asRep

It is really a question of who they decide they want to compete against

Google have the potential to offer a definitive solution that could be looked on as conclusive proof for protecting your Adsense account, and combining Analytics and Adsense with Doubleclick would have many advantages, though that level of advertising integration would be scary.

The low end market is pretty much underserved, the majority of bloggers and web publishers do not use any advertising management solution, and a great number probably don’t use tracking either.

A hosted solution is ideal because it lowers the barrier for entry – you could use the code on any platform without server knowledge, even for bloggers using blogspot.

How Would They Earn Money?

• Advertising other affiliate programs
• 2 Tier affiliate programs
• Middleman for CPM based advertising and affiliate JVs
• Become their own affiliate network
• Additional payments for “pro” features

They won’t be able to make any money from Adsense referrals as I believe OpenAds is UK based, though it is always possible to change commercial location.

Scott from OpenAds says in the comments on the blog

Openads will always be GPL, and a download version will always be available. The hosted version is a simpler way for publishers to get up and running without the hassle of installing, configuring, maintaining, etc.

- The hosted version of Openads is free (and of course the downloadable version). In the future, we may offer commercial services to users of either version of openads (downloadable or hosted) if they want additional support.

- We will try to release new features to both the downloadable and hosted versions at the same time.

Like James mentioned above, this is a major step that we are undertaking, and we are very excited about future prospects for Openads. I know that our team has been very focused on this project, and they have been doing a tremendous job so far.

We look forward to offering this huge new offering to more and more people as our beta rollout progresses.

Adage Power 150

Over the last few days for instance I noticed that Advertising Age have rejigged their Adage Power150 which I previously discussed a few months ago. It is great to see that Google PageRank has a lot less importance, and the inclusion of Yahoo link data, but there is an over reliance on Technorati.

Technorati is easily gamed, because they count links from the sidebar and footer, which can easily be encouraged by creating widgets and WordPress Themes. They do try to clean up their own Top 100 list, manually removing blogs that seem to have an overbearing number of links from viral content.
There are also some aspects of how a theme is designed that have a huge affect on how many links Technorati claim from a single blog, or the number of blogs that Technorati think are at a single domain.
Technorati currently accounts for 70 of the possible 150 total points a blog can receive, and the top ranking blogs can gain close to a full quota, unlike PageRank for which only 6 or 7 points can reasonably be attained.

You will notice that a lot of the Yahoo references show zero – values returned from an API need to be cached and discounted if they are zero, or return a number that is a significant change. I have seen Yahoo numbers drop from 30K links down to less than 9K, only for them to rebound.
It should also be noted that Yahoo also give credit for nofollow links from places like Delicious, Stumbleupon, and even blog comments. Not all links are created equal.

There is a bonus with the changes – I have gone from around 30 on the list to 17 or 18, and Adage is a low but consistent traffic source and has certainly extended my reach with new subscribers.

Top 100 Make Money Blogs

Another list that sends traffic daily is Mark’s, but again it suffers from a number of anomalies.

First of all PageRank plays a visible factor, or I am sure Yaro would be placed a few points higher, he used to be a PR6, and whilst it might not affect position so much, I have highlighed the other sites that currently have a penalty.

There also seems to be a problem with the Technorati rating on a number of blogs being much lower than it should be. I am not sure if this is a canonical domain problem, or some kind of new factor being applied to specific domains for data accessed by API.

Niches

Many niches don’t link out as much as meta blogging and technology blogs, and those in related niches such as venture capital.

As an example regular reader Lucia also has a knitting blog – I know that at times she gets 3 or 4 times as much traffic as me, even without social media influence.

PR3 (I remember it being a 4?), Technorati rank 44,000 (141 blog reactions), Alexa around 200K

The current statistical measures people use just don’t relate to the vast majority of bloggers.

Existing Stats Are Not Accurate?

Alexa is based upon toolbar usage – though their own toolbar isn’t very useful for many people, webmasters in the meta blogging niche can recommend the highly useful Search Status toolbar for Firefox that feeds Alexa with the same data.

Compete used to suffer from poor uptake of their Firefox toolbar because of problems with Firefox, but when Compete was added to the Search Status toolbar, again meta blogging and SEO blogs saw a boost.

With Technorati being used as a factor in so many monetization services, various methods have been used to boost links from other bloggers. Whilst they might get manually edited out of the top100 blogs on Technorati (and I have written how to avoid this several months ago), their numbers still get reported through the API though there is no guarantee that will last forever.

What would top bloggers do if the API for Technorati starts to report zero for anyone that Technorati feel is gaming the system?

Quantcast

Quantcast is accurate, but only if you include their tracking code on your blog and get “Quantified”

If you don’t, you end up claiming they are inaccurate in your end of year stats ;) – sorry Rand, I couldn’t resist that one.

If you compare our data and the SELand data to what Compete, Quantcast or Alexa are reporting, you can see how tragically inaccurate those services are. Sadly, that’s no anomally. Everytime I get access to a client’s visit data, I’m always curious to check the three and have not once found accuracy, even on a relative basis. Third party traffic metrics still have a very, very long way to go.

Just to give you an idea of what happens if you don’t add tracking code to get quantified, here is a comparison between this domain and DoshDosh, Search Engine Journal, Search Engine Land & SEOmoz.

note:the Quantcast images will display much clearer in a feed reader, they are limited on display width on the blog and forced to a smaller size

Search Engine Land traffic is directly measured, as is my own, the other sites are just a panel estimate. As SEL effectively makes the others almost invisible, lets replace SEL with Marketing Pilgrim

You can see some clear traffic spikes in the panel estimates, probably due to click traffic from other sites which have Quantcast code embedded such as Digg

In fact of the major social news and bookmarking sites, only Digg and Propeller are Quantified.

Why IzeaRanks IS Needed, But Might Be Rejected

When you create a page on a blog to help you sell your advertising inventory, how can an advertiser trust the traffic figures you give them, and why should they have to research whether you in some way gamed the statistics?

If you are a large publisher and it is a significant advertiser, you might be willing to give them access to some real statistics, such as Google Analytics through shared access, or your advertising administration system might provide reasonable stats to advertisers. As an example B5Media use Valueclick – I would hope Valueclick have some tools to provide statistics that can be verified before an advertiser makes a purchase.

Certainly Problogger isn’t listed as Quantified

For smaller publishers it would be possible for them to use existing services like Quantcast, but they don’t, because using Quantcast isn’t being encouraged by the people that count… the monetization services and advertisers.

For all the negative publicity Izea has had due to their PayPerPost service, one thing remains clear – they are an advertising company looking to help bloggers make money. They are not a competitor.

I would be more worried if I was placing tracking code on my blog if Izea in some way were a competitor creating content, such as Performancing with their Metrics service, which Izea themselves almost purchased though then it was a different animal, and not just a branded version of an existing tracking service.

I am a firm believer in not making things too easy for competitors, well with this blog I don’t care so much, but certainly for niche sites. I don’t worry too much about monetization services gaining stats, and I never looked on MyBlogLog having access being a problem. I am not sure if Blogcatalog are collecting anything, but again, they are not exactly running a blog network.

The IzeaRanks interface is honestly pretty basic compared to what is offered by Quantcast as far as raw traffic stats, and you are certainly missing all the segmentation data (though I am not sure how reliable that is).

Izea’s “RealRank” is based upon the following factors (from their announcement)

• 70% weighted towards visitors per day
• 20% weighted towards amount of ACTIVE inbound links per day
• 10% weighted towards pageviews per day

I am not sure whether Izea have come up with a way to have only “Real” pageviews and visitors counted, as many stats packages have problems with the pre-fetching of pages from Stumbleupon causing massive errors.

The active inbound links is an interesting statistic. Links that deliver real traffic. It is relatively easy to build up links and gain PageRank from obscure sites, or to game rankings with themes and widgets, but those links rarely get clicked on by visitors. Even blogrolls are pretty much ignored by visitors unless you have an unfair advantage of your sitename starting with the letter A ;)

Many people state that the value of RealRank will be based upon how many bloggers use it. That is partially true, but the real traffic and unique visitor values will be valuable to advertisers even if just one blogger signed up for the service.

I am disappointed that Izea are not doing anything with feeds, though it is much easier to do that with WordPress blogs than blogs on Blogspot, especially with the way Google have now integrated Blogger and Feedburner. The technical skill that would be needed to feed a feed into izea and back out to Feedburner would cause countless technical support problems, and Izea have enough technical support problems with some of their other services, and no end of headaches.

There is an API, I am sure some smart people will jump on it and use it to provide something useful, though I am not sure how quickly that will happen. The usage restrictions of 5000 calls per day is generous.

It is true that Google might currently look on javascript from Izea as an indication of writing paid posts, but hopefully with Social Spark that will be cleared up. Social Spark will offer total transparency. If you are doing nothing wrong, it probably isn’t going to be a major problem even if Google clock up even more false positives for a short while. If you are doing something naughty, you are probably going to be caught anyway.

Do You Have An Advertising Sales Page?

If you have an advertising sales page on your blog, have no doubt that advertisers will start to expect the availability of real statistics, not something you quote from AWStats.
AWStats typically reports around 6x as many page views compared to javascript based tracking on my blog, and quite a few more unique visitors.

You could include Quantcast, but you might as well include IzeaRank at the same time especially if some smart people come up with a way to present the stats effectively.
I can see Paul’s point at Mashable, that Izea maybe should have concentrated on the whole of the internet, and not just the blogosphere, but you could argue that the BBC or the Washington Post should be included in the Technorati Top100 as well, because they offer RSS feeds.

In my mind the individual rating of blogs by RealRank is meaningless unless it it put into context of their topical niche, such as I could compare Mashable with Techcrunch on Quantcast and discover that neither are quantified, so the statistics are totally worthless.

I can understand why Darren doesn’t necessarily need it, or other B5 Media Blogs, but many niche bloggers do need something they can use to demonstrate their relative worth. Just a week ago a key tip from Shoemoney on Darren’s blog was about a clear advertising page.

Is there a difference between clear and transparent/honest/uncoloured ?

How much creative license should people use to sell advertising?