John Batelle and his Federated Media Oublishing Group as well as Jason Calacanis and Nick Denton plan on creating their own respective ad networks that target blogs. Here is my break-down of how a blog ad network would work, and why it could be a bad idea. Some of the listed below are pretty obvious.
1) First of all there are too many blogs out there and an ad network would need to garner some sort of control over how the ads are shown. Blogs would need to be bundled into categories, and the ads would have to be served accordingly - obvious.
2) The ads should be contextual if at all possible, that would actually help erase the need for blog categories all-together.
3) Text based ads are out of the picture - Google has that covered. Obvious
4) There would need to be enough advertisers to fill their inventory. The whole idea of a blog ad network fails when the owners get lazy and start running 3rd party ads from the likes of Burst Media, Tribal Fusion, Advertising.com etc. Any blog owner can do that - or should be able to figure that out.
5) Ad rates would need to be low enough to attract advertisers. I am talking $3/CPM or lower… a lot lower.
6) Revshare with the blog owners would need to be in favor of the blog owners. Think 60/40 or 70/30 and you get the picture.
7) With revshare so low, you would need a TON of blogs in order to generate some real revenue. Obvious
8) Offer blog owners some more products. Do a deal with Shopping.com for example and offer blog owners their own custom merchant links on their sites. (this process is super easy to implement btw) Maybe emulate the mini-malls concept already out there?
In my opinion, this is a dead-end and these owners are simply behind the game. The tools to make money from a blog are already out there, will putting them all under one umbrella and presenting it to a blog owner work? Maybe. I just really think that a blog ad network would be hard pressed to beat Google this late in the game. Either own the blogs like Weblogs Inc. or think of another business venture.
I will give you all a big hint: Think video ads…it’s a new frontier there.