ChasNote

Kevin Rose announced big news for Digg: They’ve signed up Microsoft to sell their banners and text-link sponsorships. (FM will keep doing what we’ve been doing — the integrated sponsorships, custom programs and conversational marketing.) From Kevin’s post:

“We’ve signed on Microsoft as our new partner to sell and serve the ads on Digg. It’s a deal similar to the one Facebook signed with Microsoft last year. This move gives us an advertising partner with a larger organization and a more scalable technology platform to keep pace with Digg’s growth. Best of all, it lets the Digg team completely focus on new feature development. Federated Media, which has been an awesome partner for the last year and a half, will continue working with Digg focusing on integrated sponsorships and custom programs like the Arc project in labs.”

Here’s Battelle’s comment at FM’s blog:

“Today our partner Digg and our new partner Microsoft announced a deal to work together on advertising across Digg’s burgeoning site. At FM, we’re proud of our partners, and particularly proud when we’ve helped prove their businesses’ value. It’s no secret that Digg is the kind of property - like Facebook - that was bound to get the attention of the Big Guys as they continue to play an ever more fascinating game of Internet chess. That’s why I’m even more pleased that FM is continuing to work with Digg and with Microsoft to further Digg’s goals.”

And here’s the official press release from Microsoft, including news that FM and Microsoft will be collaborating around conversational marketing stuff:

“Microsoft and Federated Media Publishing, Digg’s current advertising partner, plan to collaborate to bring integrated programs to Digg’s users and advertisers. ‘Federated Media has unique advertising sales assets that dovetail with our efforts, and we look forward to working with them,’ Berkowitz said. [Steve Berkowitz is Microsoft’s SVP for the Online Services Group, ed.]”

Congrats, all around!

Here’s the press release. Reuters says the deal is $275MM in cash.

Nick Carr’s recent column for Guardian Unlimited is called, “How corporations still control the marketing conversation.”

I like the implied admission that these conversations — what we used to call publications — are controlled at some level by the corporations who pay the bills through advertising. (Excluding, of course, Ms Magazine and Consumer Reports.) Hey, admitting the problem is a great place to start! He even turns the mirror on his own sector of the media business:

“Even in traditional media, the line dividing marketing and editorial content has long been a blurry one. Many newspapers and magazines publish in their pages advertorials written by companies, even though they know that many readers don’t distinguish the paid content from the articles written by journalists.”

But, ironically, he concludes with this:

“It has long been assumed that the internet, by democratising media, would level the playing field, shifting power away from corporations and to individuals. A lone person, using a computer and a web connection, could broadcast his opinion about a company or a product to the entire world. There’s truth in that, but it’s not the whole truth. As the line between media and marketing blurs further, corporations are finding that the web may give them more power to influence what people see and do. In the end, conversational marketing is more about marketing than about conversation.”

When the NY Times let ATT wallpaper the print pages of the business section in January 2007, horrified readers didn’t have an easy channel to voice their feedback. Or when it has launched new sections of the newspaper — such as Automobiles or Small Business — not because there was suddenly more news about those topics, but because advertisers would pay the Times more if they wrote more stories on those topics, there was no forum for public discussion. When the Wall Street Journal promoted Dell advertorial videos as video news coverage (with another tech vendor’s commercials running before and after the advertorial, to make the ruse complete!) the traditional journalists at the Journal and its competitors looked the other way. When CNET, ZDNet, PC Magazine, CNN, Fortune, or Car and Driver have lent their voices, words, logos and names to advertisers for use in ad creative — it’s something we consumers just have to deal with, quietly.

When websites — especially the new generation of “conversational” sites that , oh my!, make it easy for their readers to express themselves right there in the publications (attached to the story itself, not on page 28 where “letters to the editor” are hidden) — explore more relevant approaches to advertising, they DO open themselves up for criticism, actively. They invite it, in fact, because they recognize their survival depends on listening to reader feedback and improving from it. Conversational media and conversational marketing certainly “level the playing field” and “shift the power away from corporations” more than old school media and marketing ever has. It ain’t perfect yet, but it’s a move in the right direction.

Congrats to Gil and the gang at Wikia! Today they announced a relationship with Looksmart for search, backfill ads and the technology to manage the display ads and conversational marketing programs us FM’ers are selling across the many Wikia sites. From the release:

“The LookSmart solution is comprised of a full-service ad serving and yield optimization platform and corresponding services to handle all forms of ad units and payment types (CPM, CPC and CPA). The platform and services will support Wikia’s sales of both CPC and CPM ads directly to their advertisers and will help Wikia optimize revenue and page yield among its various ad sources. Wikia will also become part of LookSmart’s distributed ad network, which provides relevant backfill for its partners to augment their own ad sales efforts.”

It sounds like my colleague Bernie Albers lit it up at last month’s “Innovators Roundtable Dinner,” hosted by the IAB.  He proposed an eBay-style rating system for ad agencies where publishers and other partners would vote them up for good service (frank and open communication, etc.), or vote them down for poor service (delinquent payment of invoices, late delivery of creative, etc.)  Scandale!!

But perhaps it’s more likely — and beneficial — than it sounds. Industry by industry, the internet has forced a new level of transparency to business practices that have been intentionally obscured from consumers and business partners. Inflated brokerage fees and retail pricing met this fate in the 1990s, thanks to online discount brokerages and comparison shopping engines. Google has begun the process of “rationalizing” direct-response ad rates online; and, ironically, their own black-box approach to sharing revenue with publishers is facing inevitable pressure.

As we saw in other industries, best-of-class agencies will force this issue — since a system that rewards better-than-average service gives them competitive advantage in winning new business. Change can be uncomfortable, especially for the incumbent leaders. But I say, bring it!

Data from Compete.com puts Digg ahead of Facebook in unique visitors, both a bit above 20 million in May 2007.

My alma mater CNET Networks announced today that they are launching their own network of blog sites, with clusters — what some may call “federations” — of sites covering tech, graphic design, parenting and sports. Where have I heard that concept before?! (Hint: Here’s a link to FM’s site.)

Two years ago I left CNET to help start FM.  Here’s what I wrote then under the heading “ChasNote Has A New Address”:

“Well, I should have guessed it would lead to this.

“About a year ago I started ChasNote as an excuse to talk to all of you about trends and innovations in online marketing. And, through these conversations, I’ve convinced myself — or maybe it’s your fault! — that I need to move out to the front lines. I am leaving CNET Networks to join John Battelle’s “record label for bloggers,” FM Publishing [updated, FM is now called Federated Media], as VP of sales and market development, starting July 11 [2005]. It’s been a very tough week saying goodbye to the innovators, trend-setters and good friends among whom I’ve worked here at CNET for the past six years. But I’ll tell you what I’ve been telling them — why my heart and soul required me to enlist with Federated Media.

“A few thousand, maybe a hundred thousand, of the 10 million bloggers are doing something remarkable. In today’s media-saturated, viewing-multiple-channels-at-once climate, they have grabbed the undivided attention of an audience. For all the talk of “audience engagement” by Big Media, it’s a handful of moonlight publishers who have actually pulled it off. They’ve created intimacy, authority and real live dialog with their readers. While three-fourths of PVR users skip commercials and everyone else has learned to tune them out, certain bloggers have convinced their constituencies to tune in.

“Two big challenges remain, though. First, most of these bloggers haven’t figured out how to quit their day-jobs and pay rent at the same time. Second, marketers — who are willing to kick in rent money for the opportunity to participate in this high-energy connection between blog publishers and their audiences — don’t have a scalable mechanism for doing so.

“I won’t pretend that I know exactly how these issues will resolve, but I’m signing up — by way of Federated Media — to work on the solution full-time.”

Gosh, what starry-eyed optimism.  How cute!  But my belief in conversational media (and conversational marketing) hasn’t tapered a bit.  In fact, the marketers who have helped shape this new kind of marketing — and have supported FM’s business — have convinced me that I’m right to believe.

So CNET, welcome to the party!

Full report at PaidContent.

I’ll be speaking at FAST Search & Transfer’s Future of Media conference on Thursday afternoon. If you can make it to West Hollywood that day, come join us!

The latest research from TNS finds that ad spending was down by 0.3% in Q1 versus Q1 2006 (Ad Age). Last year’s Winter Olympics gave Q1 2006 a boost that 2007 didn’t have. Online and other sectors, though, were up:

“…of 19 measured media tracked by TNS, only six posted gains over the prior first quarter: outdoor, up 2.4%; Spanish-language TV, up 3.7%; cable TV, up 6.3%; consumer magazines, up 7.1%; Spanish-language magazines, up 14.3%; and, of course, the web, up 16.7%.”

Of course.

Update: The IAB issued their numbers today, too, and they put year-over-year online ad spending up 26%:

“New York, NY (June 6, 2007) – The Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers LLP (PwC) today announced that Internet advertising revenues reached a new record of $4.9 billion for the first quarter of 2007. The 2007 first quarter revenues represent a 26 percent increase over Q1 2006 at $3.8 billion and a 2 percent increase over Q4 2006 at $4.8 billion.”