The Web has become deeply embedded in our daily lives, for business and pleasure. Today, 71 percent of American households have Web access. Americans, ages 13 to 24, now spend more time online than they do in front of the TV.
Weblogs, or 'blogs', have exploded: There are 50 million of them, and two new ones are launched every second. Blogs are so cheap to create and operate that a lone blogger with the ever-expanding reach of the Internet, can amass vast audiences and generate levels of profit on a per-employee basis that traditional media companies can only fantasize about.
Blogs offer a personal touch in the mediascape with small sites becoming our guides to a content-saturated world. As such, their recommendations are highly valued by readers--which naturally has made advertisers take notice. Says, Thom Campbell, head of media strategy for Intel, "The audience on blogs is the cream of the crop."
The monetization of blogging can trace its roots to late 2002, when Google created a revolutionary system that allowed anyone with a website to run ads like those on this blog. The technology, called AdSense, matched ads with a site's content. Each time a visitor clicked on a licked ad, the site's owner got paid (a model now referred to as cost-per-click advertising). At the same time, display ads--the banners, buttons and skyscrapers that had fallen into disfavor with the bursting of the Internet bubble in 2000--began to make a comeback on major destination sites such as Yahoo and MSN. Marketers pay for those kinds of ads based on a formula know as CPM, which stands for cost per 1,000 impressions.
The blogging-for-advertising-dollars phenomenon is only in its infancy, and already blog ad spending is roughly twice what it was last year. With the overall Web advertising expected to grow by 50 percent to $23.6 billion in 2010, it's certain that more and more ad dollars will land on blogs.
Source: Business 2.0, September 2006