Understanding Izea’s Sponsored Blogging Service

My role as an analyst is to find out what types of social media are effective for Forrester’s clients, this weekend provided a unique opportunity to watch how sponsored blog posts are now emerging.

Understanding Sponsored Blog Posts
I posed some questions on Twitter when I learned of it on Sat (I embedded them below for any late-comers), and then got on the phone (yeah that old thing) with Ted Murphy the CEO of Izea to get the facts, and then talk to Chris Brogan, one of the bloggers who participated and is also on the Board of Advisors of Izea, who has since explained his actions in this lengthy and active post (over 170 comments and 17 trackbacks). Ted said “the call was balanced and open”, and Chris Brogan said “He’s a very fair and good analyst.”. Let’s stay with this theme as this is a very charged topic.

Izea (and social spark), a spin-off the heavily criticized Pay Per Post has launched a campaign offering influential bloggers gift cards to go shopping, and then share the wealth with their community via a contest. This is good, I’m all for bloggers getting paid. Update: I just discovered the inventory of bloggers, where you can purchase sponsored blog posts.

Let’s examine why Izea campaigns are likely to be successful

  • Recent research shows that corporate blogs are not trusted, but we know that consumers trust their peers, so savvy brands will want to benefit from word of mouth.
  • The economy is sinking, consumers, bloggers, well everyone, can use extra cash in the hand.
  • Pay Per Post did not require disclosure, Izea requires up front disclosure –this is ethical.
  • It’s doubly attractive as each of the bloggers can hold a contest, offering additional prizes to their readers, this spread like wildfire in Twitter –reaching a large audience.
  • I learned from Ted that the bloggers that would participate would receive traffic, as the advertising network within Izea would point to the blogs that are sponsored.
  • Click through rates will be far higher than banner ads, Ted shared me some numbers, and if he’s right, they are significantly higher. This makes sense as the source is higher trusted than an ad.
  • It’s inexpensive for the brand, while I hear of many soical media campaigns for Fortune companies being 50-100k, the payout to bloggers and community is a mere 5k, although I’m sure there’s many service fees going to the marketing team at Izea.
  • But what are the risks?
    With every benefit comes a risk to each party, and this one is no different.

    Risks to bloggers and their communities
    Bloggers will simply have to ensure that they are delivering trusted content to their audience (transparent), and it’s relevant to their current topics (authentic). If readers are going to a tech blog, and expecting tech content, they may be surprised if the content shifts to a different medium –like consumer goods. Ted explained that the bloggers will choose the content they will write about, so in theory, this will work. The good thing about the blogosphere is that it self corrects, the community members will let the blogger know what they do and don’t like –it happens every day. Update: Julio Fernandez notices that the tweets are generating spam, and takes a screenshot.

    Risks to Izea
    The other risk is the inventory may not be sustainable (long term). What’s the inventory? The bloggers. Izea will need to ensure that the blog posts are spread out so the sponsored posts. If bloggers continue to do sponsored only posts, they do run the risk of losing editorial trust from their community, and then losing audience. As Izea gains popularity, expect the demand to increase for these campaigns.

    Risks to Brands
    For brands, they should realize that this is not the only way to reach customers, many brands are reaching customers in social networks, building online communities, and using corporate blogs. Brands shouldn’t put all their resources into sponsored blog posts.

    Bottom Line: Sponsored blog posts to proliferate
    Getting bloggers paid is good, word of mouth for brands is also good, as the prizes and content spread to the readers of the blog they win too. The only risk is if the editorial becomes trusted, but we should expect bloggers to self-police themselves. Two years ago, I never imagined that I would write a positive post for anything coming out of Pay Per Post, but I think this model is getting refined.


    Clarification
    Twitter is in an interesting beast, information flies so quickly, that some may misunderstand or distort what really happened in the first place. For some reason, people think that I was against sponsored blog posts or specific bloggers, that’s not true, you can read from my tweets, that I was asking questions to learn and did due diligence to get on the phone with the parties involved, any of the risks I mentioned in the tweets, I’ve also outlined in this post.

    The tweets are listed in chronological order, so the first is at the top, I removed any tweets not about this topic.

    Kmart paid Shoemoney $500 resulting in buzz from paid blog post 300+ comments http://snipurl.com/7yi5w “Buying” social media is effective 4:37 AM Dec 13th from web

    This may not be a scalable model however, as buying placements could reduce credibility of bloggers, reducing marketing inventory. 4:38 AM Dec 13th from web

    Bottom Line: Expect more brands to ‘buy’ bloggers and tweeters as the economy dips, this truly is cost effective marketing 4:39 AM Dec 13th from web

    @moon Yes, I’m fully aware of Ted, and Izea. Paid product placements are nothing new, what are impacts to individual bloggers and tweeters? 4:49 AM Dec 13th from web in reply to moon

    @tedmurphy (Founder of Izea/PayPerPost) have you considered the brand damage this could do to your inventory (bloggers)? 5:06 AM Dec 13th from web in reply to tedmurphy

    @moon @tedmurphy is this true? @Chrisbrogan used a seperate blog for the paid Kmart post? What’s the URL? 5:21 AM Dec 13th from web in reply to moon

    Here’s @chrisbrogan ‘s paid post for Kmart http://snipurl.com/7ynb1 Transparent, Yes. Authentic? Debatable. Sustainable? No. 5:26 AM Dec 13th

    Got off the phone with @centernetworks discussing and debating IZEA paid blog posts. More news on that soon. 5:59 AM Dec 13th from web

    @RevzNexus I need to learn more, I requested meeting with Ted Murphy and also with Chris Brogan, I may try to talk to Kmart too 6:02 AM Dec 13th from web in reply to RevzNexus

    Just talked to @tedmurphy, asked him many questions, I’ll blog my analysis if brands and bloggers should to this on Monday. 6:30 AM Dec 13th from web

    Had a good call with @chrisbrogan He’s on board of advisors for Izea. They model is getting refined. More brands will certainly use Izea. 7:19 AM Dec 13th from web

    Expect more bloggers to sign up for sponsored posts as the economy takes a downturn, this is just the start. 7:22 AM Dec 13th from web

    @chrisbrogan Thanks Chris and @tedmurphy, I’m trying to understand all sides of the issue (short and long term) before advising my clients. 7:28 AM Dec 13th from web in reply to chrisbrogan

    I highly respect @chrisbrogan as usual, he gives a thoughtful and transparent post explaining Advertising and Trust http://snipurl.com/831w6 about 15 hours ago from web

    I hope this shows why Izea is going to grow, and explains my stance.

    Related Posts: (I’ll be updating this)
    I’ll be adding links to posts that add to this discussion, on both sides of the fence.

  • Lucretia M. Pruitt: What is Your Time Worth? What’s Worth Your Time? (who’s actually one of the unpaid Wal-Mart Mommy Bloggers)
  • Aaron Brazil: IZEA, Social Spark and Redemption he’s one of the bloggers in the program
  • Mashable: Do Brands Belong on Twitter? Related, as the blogging campaigns spill over to twitter.
  • CenterNetworks: Allen Stern does a deep thought piece on paid sponsorships, read my comments at the end.
  • Jennifer Leggio of Zdnet has posted her thoughts, and suggests the campaigns are sustainable, she always has a good perspective.
  • Karl Long: Brands in Social Media and Selling Influence suggests that there are different questions we should all be asking
  • Podcast: Chris Brogan was interviewed by Six Pixels of Separation, hear his opinion.
  • MediaPost: Shows actual numbers how the Kmart brand has benefited from this campaign.
  • Duncan Riley gives a reasoned perspective why sponsored posts are not that bad –and why you should not do them.
  • David Churbuck: Shooting Fish: Blog Whores, David’s heading the social media programs at Lenovo, and discusses why he’s unsubscribing from some folks
  • Stowe Boyd: Izea: Where Is That Line Again? Stowe lays a very balanced post on where the ethical points start and stop.
  • Julio Fernandez took a screenshot of “twitter spam” and gives his thoughts
  • Mistress Mia: Chris Brogan Firestorm Begs a Big Question “No one does anything for nothing.”
  • Ross of crowdSPRING compares advertising to sponsorships, and points out the differences.
  • Dave Taylor: Is Jeremiah Owyang an analyst or is Aaron Brazell right to call him out? Dave addresses some discussions that I had with Aaron.
  • Adam Singer: Paid Blogging Is A Lose-Lose Situation a very comprehensive analysis
  • Steve Spalding, a blogger who participated in the Izea program responds that he’s not a journalist. (edited)
  • Esteban Glas: Riding Every Single Wave