Barry Ritholtz posed an interesting question for bloggers in Blogonomics: A New Chapter

I had a good blogonomics idea several years ago. I pitched it to numerous media outlets, but to no avail. The, NYT, Conde Nast, WSJ, CNBC. The idea was for a mainstream media outlet, with their ready-built ad sales team, to extend their advertising umbrella to the blogosphere. We bloggers provide content/inventory/page views for free — remember, the MSM is spending millions to crank out content themselves — and they provide high CPM adverts. The bloggers capture 50-60% of the revenue, and the balance goes to the MSM ad teams. For them, its cost-free content to serve the ads they sold anyway — it not only brings the MSM deeper into the internet, it should be found money for them.

No brainer, right?

Only, not so much. There were very few takers. Wired, to their credit, tried it with the Big Picture, but one blog was too small to move the needle much for them.

But the idea makes sense. The next step is to do this with a cooperative of sorts – a network of blogs that perhaps individually may not have huge traffic, but collectively match the traffic of the NYT or the WSJ. A handful of the larger blogs, a substantial run of the up and comers, some established mid-traffic blogs, and collectively you could end up with 25 million page views per month. THAT has to be worth something to advertisers.

And if the blogs are selected carefully – avoid the SEO sites, content farms, and click whoring articles on 20 pages – you would have a tremendous grouping, with a very worthwhile audience. Well-educated, high net worth, discretionary spending, substantial investment portfolios — an advertisers wet dream.

Gee, might a network of Market/Trading/Economics blog reach that desirable audience? What is that worth to an ad buyer?

Indeed, it seems almost obvious.

So why hasn’t this been done yet? What am I missing here?

Forbes Tried and Failed

Hello Barry

Recall that Forbes tried and failed. To your credit, you spotted problems with Forbes in advance. Calculated Risk and I did give Forbes a whirl. It did not work out particularly well and you stayed away from it.

Ironically, Forbes was not even a good model for bloggers but a good model for Forbes. They took 55% and gave bloggers 45%.

In spite of an advantageous split for them, Forbes struggled to fill ads. I bet Forbes filled 10-15% of my space at most although they insisted they be listed first in hierarchy. After Forbes, I cascaded to Tribal Fusion, then to Google. I now have a different sole-provider relationship with a few exceptions.

Here is my question: If Forbes could not fill ads, could a group of bloggers?

In terms of size, beyond the top 5 or so there is not much size. I assume you have seen these Blog Traffic Rankings, perhaps not.

Notice how sharply traffic drops off. The top 3 are clustered (Calculated Risk, Big Picture, Mish). Naked Capitalism and Marginal Revolution are clustered at 4-5 with 50-60% of the top blog traffic.

The number 6 blog drops dramatically and only has 20% of the traffic of the #1 blog. The number 10 blog has 14% of the traffic of the #1 blog.

That number 10 spot barely enough traffic to interest an ad network like Tribal Fusion.

Those rankings do not include aggregators or content providers like Seeking Alpha, ZeroHedge, or Minyanville. Nor does it include corporate blogs like Krugman. The list is restrictive, on purpose, to compare individual, non-corporate sponsored bloggers.

It is not easy to break into the top 10 or even top 20. Yet the number 20 blog only has 5% of the traffic of the top blog, and little traffic to interest any advertisers other than Google.

Thus you are really seeking a consortium of say 10 bloggers at most, and possibly only 5. Otherwise you are back to the failed Forbes model.

Maybe this is your answer, maybe not, but arguably it explains why Forbes going after hundreds of bloggers failed.

Excellent Content

The thing is, there are some really excellent blogs out there. I read articles all the time and wonder why isn’t this person’s traffic higher. To answer my own question, I have a list of reasons:

  • Inconsistency in posting quality
  • Inconsistency in posting frequency
  • Content too similar to what the top few blogs post
  • Site too new to attract a large following
  • Blog author gives up

It takes years to attract a following although there are some exceptions like Zero Hedge. However, ZeroHedge has a dozen authors or guest bloggers (at least) and cannot realistically be compared to an individual blogger.

Word of Thanks to Barry

On a side note, Barry Ritholtz is a friend. Many read too much into our disagreement regarding regulation. We simply disagree on the issue of regulation in general. However, we do agree on some pieces of individual regulation. Moreover, we agree many other things, including the role and responsibility of the Greenspan Fed and Bernanke Fed in this mess.

Barry was an early proponent of my blog. He helped build my traffic at a critical time. I have publicly and privately stated that on many occasions.

Thanks again Barry.

Mike “Mish” Shedlock
Click Here To Scroll Thru My Recent Post List