At the March 2004 Politics Online conference at George Washington’s Institute of Politics, Democracy, and the Internet, Henry Copeland from Blogads posed a question to the panel on Internet advertising: “Have you considered placing ads on blogs?” I was on that panel, along with Cliff Sloan from The Washington Post, Nick Nyhan from DynamicLogic, and Charles Buchwalter from Nielsen//NetRatings.

All of us on the panel had heard of blogs, perhaps even visited one or two before. But who would actually pay money to place a tiny tile banner alongside of someone’s random thoughts? We all thought Henry was crazy, along with everyone who agreed with him.

As it turns out, we were all wrong. This past year, these inexpensive, static ads provided many candidates and organizations with an effective way to reach activists and thought-leaders on both sides of the aisle.

But after enjoying a remarkable ride from relative obscurity to trusted media vehicle, are paid Blogads a thing of the past?

According to Copeland, Blogad’s CEO, over 200 political campaigns placed ads on blogs in 2004, accounting for 40% of his company’s revenue. However, Site Meter reports that traffic to top sites like DailyKos and Instapundit has dropped by half since October, and revenue from Blogads has likely dropped by as much. While the most popular blogs still attract hundreds of thousands of pageviews everyday, can the average blogger – who keeps 80% of the revenue generated from Blogad buys – adjust to the possibility that the cool stream of welcome cash is likely to dry up, at least until the 2006 cycle begins?

Here are some suggestions for Henry and the Blogads folks to keep the money coming in while waiting the next cycle to arrive:

1. Branch out

If you visited a blog in October, you couldn’t have missed TBS’s ads promoting reruns of “Sex and the City.” And rumor has it that TBS is planning another large Blogad campaign around their new reality show “Gilligan.” In addition to TBS, Blogads were also purchased by Sharp Electronics and a handful of other non-political advertisers. Blogads should proactively market themselves to online ad agencies as a way to reach influential and engaged consumers. Just don’t let the non-political advertis
ers buy up all the ad space!

2. Team up with Google

Blogads should approach the folks at Google AdSense to discuss a multi-year partnership to place contextual links within blog content. While you run the risk of having untargeted and seemingly arbitrary ads appear within alongside articles, Google will do all the work while you make money in your sleep. It’s a no brainer.

3. Move to a bidding model

If eBay and Google have taught us anything, it’s that demand-driven pricing models work. Rather than set your own prices arbitrarily, let the marketplace set them for you. Allow advertisers to bid on placement and/or the amount they’re willing to pay per click. Although it requires more work on the advertiser side to manage an ever-changing campaign, the ability to control where your ad falls on a page was a feature that was sorely missed this year.

4. Label blogs based on their ideological slant and physical geographic location

Here’s how you go after incremental dollars. Help those purchasing ads on one blog know about other blogs that also match its particular ideological or geographical slant. When someone checks out, take a cue from Amazon.com’s playbook: “People who purchased ads on DailyKos also purchased ads on TalkLeft. Click here to add TalkLeft to your basket.” While local campaigns are prone to buy placements on well-known blogs, they might consider others if they can easily discern their ideological or geographical slants.

5. Create a “Run of the Blogosphere” ad opportunity

Rather than sifting through definitions of hundreds of blogs when trying to select those you want in your campaign, create some catch-all options to make Blogad purchases easier for political and non-political advertisers. Some obvious ideas include: “Run of Liberal Blogs” and “Run of Conservative Blogs.” Do this, and you’d be my hero. This might take the fun out of Blogad buying, but purchasing a “Run of the Blogosphere” sounds too cool to be a bad idea.

6. Allow for multiple creative executions

Blogads only allow an advertiser to run one banner creative at a time. While this might not directly impact revenue, it sure would make it easier to test and optimize various creative options. If an advertiser was able to know which ad would drive the most site traffic or revenue earlier in the campaign, they might be more likely to renew when the week is over.

7. Publish more metrics

While 2004 was a break-through year for Blogads, still only 200 campaigns across the country invested in messaging on blogs. If we are going to convince more campaigns to spend money on this new medium, we need more hard data on the impact of Blogad buys. We have all read about incredible fundraising returns from Blogads, but what’s the bigger picture? We need the data not only in terms of dollars raised, but also in terms of generating buzz and signing up activists.

8. Set up an affiliate network partnership

Affiliate marketing is a simple concept that, for some reason, is difficult to explain. Basically, affiliate networks enable a website owner to receive a commission for driving traffic to – and purchases on – a specific merchant’s website. Say, for example, I sell used political books. A blogger could agree to promote my site and collect a percentage of the profits for each book I sold that was directly attributed to the link he or she promoted. Bloggers would have total control over the types of offers they’d promote. Rather than leave it to individual blogs to set up and manage the affiliate process, Blogads should take the lead in formalizing relationships with leading affiliate networks, such as Commission Junction, and charge a small percentage for each item purchased.

Kudos to Henry and the Blogads team for helping the political community efficiently and effectively reach activists and thought-leaders in 2004.