How Quickly Will Blog-vertising Grow?

For the past six weeks, b5media has been actively trying to hiring an advertising sales manager so we can grow revenue and become less dependent on things such as text links and AdSense. In talking to potential candidates, one of the things we’ve highlighted is the huge potential of the blog-vertising market as advertisers begin to allocate some of the budgets to the user-generated content market.

There is little doubt blog-vertising is going to see huge growth over the next few years as advertisers become adopt more aggressive online strategies. We see evidence of this trend in our business every day as email inquiries appear in our in-boxes. The question is how quickly will the blog-vertising market grow. According to a study done by PQ Media earlier this, the blog-vertising will climb to $120-million by 2010 compared with $16.6-million in 2005. That’s impressive but it strikes me as conservative, although I could easily be accused of being biased.

What has struck me over the past three months since joining b5media is how many advertisers are still cautious about the online market, which seems strange give the strong growth that Internet advertising has seen over the past two or three years. Many advertising realize they need to be on the Internet but they’re still unclear about where to do it (mainstream sites, niche sites, blogs, podcasts), how (banner ads, CPM, CPC, CPL) and how much of their budgets (1%, 5%, 20%).

In terms of the blog-vertising market, a major challenge facing advertisers is who to do business with given there are 50 million blogs and counting. My sense is advertisers will approach the market in a pragmatic way and do a lot of experimenting with a variety of players to see what works. Part of this go-slow approach is many advertisers still see the blogosphere as the Wild West where anything goes. This is great for readers looking for lively writing but not ideal for advertisers that want editorial content they can count on.

As a result, advertisers initially do business with blog networks such as b5media, Federated Media, Gawker, Weblogs Inc., 9Rules, GigaOm and PopSugar where there are editorial standards and the media buys are easier than trying to pick off individuals blogs even those that are popular.

For more thoughts on the blog-osphere and the advertising market, check out Canadian Business writer Andy Holloway’s recent column.