Why blog networks are worth millions



October 7th, 2005

It had been bugging me all throughout yesterday. Why are blog networks suddenly worth millions? Well, last night, around 2 am (I'm a night owl and I work best at night - by about 8 am I've de-evolved a few million years) it hit me. At the same time it hit me as to why big media is more interested in spending millions assimilating existing networks rather than establishing a brand for themselves. It came to me when I remembered this post I made a few weeks ago in response to something Joël Céré said:

Joël Céré makes a post that the hosting company Hostway surveyed 1,100 consumers found that 77% use information from blogs to influence their purchasing decision.

So, it seems that UK consumers trust bloggers and you can logically extend this to a more general statement that consumers trust bloggers. The reason for this is quite easy to understand and advertisers have been exploiting the advantages that "one-to-one" advertising has over trying to sell big, faceless corporations to the public. Let's call this one-to-one the "Betty Crocker effect". Let's face it, most people knew that Betty Crocker didn't make all those products with her name on them (in fact, she didn't exist) but our brains are hard wired to deal with individuals that have faces and names, not companies. We want to relate person-to-person. This is one of the reasons why blogs have been so successful - it's an example of people dealing on a one-to-one basis (OK, not always true, but on the whole the idea was sound). Blogs started out as a few people talking and others reading what they had to say. Slowly though, this changed and blogs became a vehicle for ads and they turned into mini-businesses. Now posting a blog entry wasn't about just talking about what interested you but it was about getting eyes on the page to see and click on the ads. This pretty much took us to where were were a few weeks ago - there are a lot of blogs out there that are money making entities and not posting is no longer an option (that's why you see many blogs just regurgitating news and press releases and adding little value to the information themselves). Nonetheless, most of these blogs were being steered by bloggers that had good intentions at heart. Yes, maybe they recommended products that they had ads for but that's no real evil because if you didn't like what blogger A said you could see what B said instead. It was unlikely that you'd be manipulated by multiple blogs.

But the rules are changing now that big business and big media is involved I would start to urge consumers to be cautious of trusting some blogs - a few million here and there and big media suddenly have a hand in the blog game, steering them in directions beneficial and profitable to shareholders. It's the Betty Crocker effect but this time the Betty Crockers will be a real people who are being paid for their content by big media. This turns blog networks into targeted news outlets and ad streams. If nothing else, big media having a hand in blog networks will create a news conduit between the boardroom and the blogs.

I don't expect any change to be a sudden one - no, it will be slow and I would imagine that there would be a resistance to change at the early stages, but the allusion of more cash for the bloggers will almost certainly change how some look at the blog they write for and make them reassess their relationship with readers.

So why grab existing networks rather than create a brand? Simple, a new network coming out of the blue would attract attention and questions would be asked, especially if big business was paying the bills and there would be suspicion. Far better to buy up networks with an established brand and loyal readership. That way they can keep the friendly faces facing the public (notice how often stories relating to these take-overs mention that nothing is changing ...) and make any changes behind the scenes while the rest of the blogosphere congratulates the networks would have been bought and secretly wish/hope that they are next.

Expect more knee-jerk buys over the next few weeks and months.

Trust no one ...

This entry was posted on Friday, October 7th, 2005 at 12:04 and is filed under PC Doctor's Thoughts. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

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