Federated Media Archive

Reports from PEHub and Mashable indicate a new $4.5 million Series B round of funding for Federated Media. Congrats! Federated Media provides advertising for some of the world's largest blogs including: TechCrunch (TC is in "open warfare" and looking for a replacement), Read/WriteWeb, GigaOm, Mashable, ArsTechnica, TechDirt and about 100 other blogs. We have written several times about Federated Media and their "envelope-pushing" ad campaigns.

But I am left wondering, why do they need so much money and are they having difficulty filling their inventory?

First the "why" question. I have to assume that an ad network makes money (not profit perhaps) from day 1. Each ad view brings in some amount of revenue for FM. And since they are the provider of ads for many large blogs with mega CPMs, wouldn't they be bringing in oodles of cash? Perhaps this new investment round is to create other FM video shows like the Morgan Webb tech news show. And naturally towards hiring more sales execs and/or more ad-serving technology. Anyone else have ideas about where they would use this type of cash influx?

Secondly, Is FM having a difficult time selling ads/filling inventory on the top tech blogs? Over the past couple of weeks, as I browse their network of sites, I see a good number of bottom of the barrel ads running on their sites. It seems like they might not be able to fill the inventory that these sites need. Here are some examples over the past 10 days:

Some kind of download utility – TechCrunch

Supernova from GigaOm – this conference was 3 months ago?

Free iPhone with 1000 offers – Various

Two "we help you break the law speeding" ads – TechDirt and TechCrunch

On the plus side, there are the WebbAlert (shown right)/FM network banners running on many FM sites. These ads makes sense and I like the idea a lot. When you can't fill ads with paying ads, show house publisher ads. I wish all ad networks offered this type of publisher barter. Remove all of the ads listed above and only show the FM network ads. This is a great way for readers of x blog to learn about y blog and vice-versa. These banners also look 1000x better for a site's image than a "punch the donkey, win an iPod" ad. I would recommend they either explain what "SMB" means or change it to something else that people will understand.

Yesterday, I discussed the potential issues of disclosure with FM's new TV show, "Webb Alert." The feedback I have received (mostly on Skype and in email) agrees with me that there is something wrong here. So I thought I would provide some additional information.

First up, is the official reply to my post by FM. Neil Chase provided the following reply (snipped):

Federated Media's relationship with WebbAlert is explained in this morning's posts on the FM Blog and on John Battelle's SearchBlog, and in the press release we issued. We helped Morgan Webb develop the site, using the same technology from Castfire that we had used to help AskANinja. We love helping our authors develop new sites and expand existing ones.

When Morgan came to us with a proposal for a show using blogs as primary sources and asked us to help develop it and sell ads for it, we jumped at the chance. We didn't need a secret plan to get our sites mentioned. Eleven of the 21 tech sites in Technorati's Top 100 are FM authors, so our sites will show up in any tech news roundup.

Our financial arrangement is like the ones we have with all FM authors: We sell the ads, provide all the services related to ad serving, and take a commission.

While I completely understand that FM authors are the "big boys and girls" of the tech sector, I can't imagine that Webb walked into FM's office and said, "I want to link to your blogs more than other blogs." And Neil's link to John Battelle's blog makes my point crystal clear. The post on John's blog contains only the video. Check it out and tell me if you saw the disclaimer about the links contained within the video.

My continued issue with this program is simple: there is no disclosure. If I embed her video on my site, the only way a person would know that its a "family-link-network" show is to:

• first click on the video,
• then scroll way down on the page,
• then click about the links,
• then try to understand her statement. Here is my (sarcastic) take on the statement piece-by-piece:

The blogs listed on my front page are among the blogs that I read daily, and they're all blogs that I strongly endorse and recommend to you. They're not the only blogs that I love and endorse – but they're all among my favorites, and if you haven't already spent time with them, I recommend that you pay them a visit.

The blogs listed are those that are in FM's network. You should visit these using my links because by doing so I help support those sites and then those sites will continually link back to me. Oh yea, and they are the best!

I also have a traffic-sharing relationship with each of these blogs. In other words, we link to each other. The important thing to stress is that there's NO editorial element to these traffic-sharing relationships. In other words, I have made no commitments to cover stories on their blogs, nor have they made commitments to cover what I do. But since these are all blogs that I endorse, respect, and read daily, you'll probably see me talking about stories in them on a fairly regular basis.

I will post links to lots of sites, it will just so happen that those links will mostly be to sites in FM's network.

Mike Arrington from TechCrunch has given Webb two posts in two days. Today he notes, "Some will comment below that I’m only giving the show a thumbs up in the hope for TechCrunch mentions (there was one today for our Amazon/Webvan story, for example). They’re right, but for the wrong reasons." When Mike embeds this video into TC, the FM disclaimer doesn't follow. So to the untrained eye, it looks like Mike found a great piece of content or an awesome story. I believe Mike when he says he thinks the show is awesome. While the content might be great from his point-of-view, he is no-doubt linking to this video show because of what he expects in return. Mike has linked to me a few times, I have linked him as well, that's how the open Web works. Could you imagine if a site like TC was to link only to FM blogs?

Mike went on to say, "bloggers are going to see a mention on the show as a badge of honor and buzz about it." Sure, the FM network will blog about it. Let's be honest here. More links from FM sites = more traffic to Webb. More traffic to Webb = more impressions for FM to sell. More links back to FM sites = more ads to sell on those FM sites. It's a great marketing strategy, I can't fault them there.

So to be fair, let's look at who Webb links to today (similar to what I did yesterday):

• The Sun UK – n/a
• Rate My Teachers – n/a
• WSJ – n/a
• TechDirt – FM
• Ars Technica – FM (both shows)
• Kotaku – Gawker (both shows)
• Insomniac Games – n/a
• Read/Write Web – FM
• TechCrunch – FM
• NewTeeVee – FM (both shows)
• Boing Boing – FM
• O'Reilly – n/a

Today we have 12 total links, of which 6 are FM sites, which is 50%. However, what skews these numbers is that the sites she links to for non-FM are the only ones she could basically link to.

So here are my net concerns with this TV show. There is no real disclosure on either end. Embeds carry no disclaimer and the on-site disclaimer is hidden, wordy and hard-to-read. I would think they would want the best stories reported on the show, not just those that the FM family covers.

From the FM bloggers who link in perspective, should they disclose? This is a bit tougher for me to answer but wouldn't this type of post be considered a paid post in the same vein as Payperpost and ReviewMe? What do you think?

In any event, keep your objectivity Morgan, the Web is a big place, and this will help you build a bigger fan base.

Update: Added follow-up post

Over the past few months, we have debated the campaigns that Federated Media has run. Most recently the heated debate was over the "conversations" that FM and Microsoft partnered on. I applauded the efforts by FM to try new advertising mediums. Fast-forward to today and the buzz all over the tech blog scene is the launch of WebbAlert, a daily video show by FM publisher Morgan Webb. After checking TechMeme on the buzz, my brain started twitching so I did a little bit of investigation on the new video show by Webb and here is what I have found.

First, let's take a look at a good deal of the blogs listed on TechMeme. The ones listed here are all FM blogs:

• GearLive
• TechCrunch
• A VC – Fred Wilson
• Venture Beat
• Gadgetopia
• NewTeeVee

I am not trying to insinuate that FM requested postings for Webb, but sure seems like the overwhelming percentage of posts are coming from FM authors and are positive. In addition, several of them have references to Rocketboom, which makes me believe that Rocketboom was included in the FM communication. I am by no means suggesting that the posts were "paid" but just seems a bit odd that none of these high-ranking tech celebs have any constructive criticism for the show. Maybe she is just that damn good. With all of the discussion about transparency/disclosure online over the past year, should these type of posts come with a disclaimer? I think this is interesting food for thought.

What really led me to think about this was the following comment on the FM blog:

She uses the top tech news sites, including a number of FM authors, as sources for the stories and offers her viewers links back to the full posts on those sites.

Does this mean that the links that Webb points to will be FM authors? I certainly hope not! But let's look at the links from the first show:

• Fred Wilson – FM
• ArsTechnica – FM
• VentureBeat – FM
• TheDailymac – not associated from what I can tell
• Comscore – no ads
• Make – FM
• Kotaku – Gawker

Out of the 7 links, 4 are FM blogs or 57%. And the ad in the middle comes from FM blog ArsTechnica. This is disappointing at best.

So does this mean that the show is really the FM network show? I will be watching the links over the next few shows and will report back but for some reason this just doesn't sit well with me. If it is the FM network show, then call it that.

What do you think? Should this type of video show come with a disclaimer that the links within the video show are coming from within a network of sites and not from the entire Internet?

Is this Federated Media's new conversation?

I have spent a lot of time thinking about my views on this weekend's events around the Microsoft "conversational advertising" being run by Federated Media (FM) on sites such as TechCrunch, GigaOm, ReadWriteWeb and others. I am a bit pissed off at not just what happened but also by the sheer number of posts about the subject. I am going to tell you exactly how I feel and what I believe in a somewhat condensed version. No fluff.

Also check out Tony Hung and Matthew Ingram for some excellent, intelligent insights.

First, if you don't like what a blogger/journalist/whatever does, remove his/her feed, remove the favorite on del.icio.us and move on to another. Whatever blogger does not follow the values you believe in, you should not do business with. Yet, I find that people bitch and moan for days and weeks about x blogger or y blogger and still go back to his or her site. In the "late breaking news" category, today there are loads of substitutes out there. Even if the leader, currently TechCrunch, does get a story first, no doubt it will be on ten other blogs within a few minutes. And frankly lately, TC hasn't been the only site to get the story first. It seems more companies are working with more journalists than ever before.

Way too much fu****** drama. In the time of all this bitching and moaning, we could have build 10 new web apps. It's like "Days of our Bloggers", "All My Bloggers", or for the Brits, "BloggerOaks." It seems like every few months this crap happens again. If you want this kind of crap, go to PerezHilton or TMZ. Let's be business people dammit.

So let's start with a brief recap. The Microsoft "people-ready" campaign has been running for weeks. The Ask.com campaign also running for weeks has quotes from bloggers as well. And hakia's "human search" appears to be the first in recent time. My impression was that the Ask.com campaign just pulled some text from TC and used it. I am not sure if TC was paid for this. The A-listers for FM were paid for both hakia and Microsoft. Valleywag comes out with a story last Friday that "Microsoft pays star writers to recite slogan". Now frankly, reading the text by the various bloggers, it looked like someone said to x blogger, "what does people ready mean to you" and they answered. It didn't (and doesn't) seem like a Microsoft shill. For example, had the comment been something like, "I knew I was people ready when I used office 2007 because I love Microsoft." Fine. But it's not like that.

After the Valleywag post hit the news wire, it seems like all hell broke loose. Om Malik apologized and took the ads down immediately. Richard MacManus posted some general comments and Mike Arrington seemed to have the most heated reaction. Side note, Fred at Wired has a great piece about Mike and his success. Well worth a read.

Since Mike had the most gusto with his replies, I am going to focus here to make my points.

We do these all the time…generally FM suggests some language and we approve or tweak it to make it less lame. The ads go up, we get paid.

So Mike doesn't write the words that he puts in the box? To me that really is disappointing, especially for someone who values his opinion. It's accepted for an actor or sports star, I guess I am not used to it from a tech blogger. It makes it appear like he is a ventriloquist dummy which he isn't. Certainly will make me think twice about what's up in all those "conversational ad boxes" from now on.

Rather, it’s usually an answer to some lame slogan created by the advertiser. It makes the ad more personal and has a higher click through rate, or so we’ve been told.

Boy, I wonder how Microsoft, hakia or ask.com feels after reading that?

Heather, TC CEO, posted her first ever comment and here are some points of note:

Internet advertising needs more innovation and experimentation, not less.

I agree completely, see my comments below.

The ads are presented within IAB standard ad units, and I believe they are easy to distinguish as ads vs. posts on participating blogs. I’m all for transparency and disclosure, but when something is clearly an ad, I believe that’s sufficient disclosure that it’s an ad.

I disagree partly. Just because something is in an IAB size, does not always mean it is an ad. Some use those sizes for standard graphics and so forth. Also what happens when TC reports on MSFT news now? That's why disclosure is important.

Here is my belief on how this should have been handled. Valleywag post comes out. John at FM reads said post. John then immediately gets the affected bloggers together for a discussion on how this should be handled. All bloggers give their opinions and together the group provides an opinion. Instead what we saw was publishers fighting in public with their ad rep. These are businesses people, handle your affairs behind the closed doors. I am not sure Om took the right approach either but people think very highly of Om so overall I guess it was the right move.

In a post later this week, I plan to dive into the "paid buzz" topic and look at what qualifies as a paid post where disclosure should be required. Feed readers get it first!

Over my 11 years selling ad space, I have turned down probably 100 deals because they didn't feel right including one that would have taken care of me for at least a year. As I have said a million times, think before you hit the publish button, same thing goes for approving ads.

Part of this leads me to Suze Orman, the supposed financial guru. I won’t go into whether she is or is or is not a guru but she is a marketing machine with Digg-like fanboys/girls. About 4 years ago, she signed on to do a deal with GM for their cars and loans. Within weeks the backlash started. You are supposed to be non-biased and now you are pushing one car or loan over another came the cries. The ads seemed to stop pretty quickly.

Lastly, is there a male/female thing going on here? When Amanda goes out and becomes the "face" for DuPont or American Express, no one cares. She is a journalist right? She sat in the "press" row next to me at the SXSW awards. She reports for big media ABCNews and is their leading online star. But if she goes out and endorses something, it's "ok". I don't get it.

John notes that FM is trying new things when it comes to online advertising. I applaud his efforts. Pushing the envelope is what helps us as a group to move further. Someone has to be the first one to take the step into the unknown. The key is how we all react to the envelope pushing. It seems the learning here got lost somehow. Many writers said that Microsoft was the winner here. I don't think so. It's like they were sitting in the middle of everything spinning around them.

The bottom line is this. Bloggers, journalists, etc. can do whatever in the hell they want on their properties. It's up to you as the reader to determine if the site is one you want to return to. Period. Simple as that. I think by now you know my stand on ethics by now. I will never accept an ad that doesn't feel right, even if it means that I have to eat ramen noodles or get a second job. I guess it goes back to my accounting experience and having to sign hundreds of financial documents that say what I am signing is the truth. It has carried over to my writing here. If you ever feel like I am doing something past the line, let me know.

Here are my notes from the presentations by Chas Edwards of Federated Media at the Future of Online Advertising conference. I will post my complete commentary plus audio files tonight so please grab the RSS Feed.

• Chas believes there are only a small number of professional media sites that marketers should care about. (shows Cnet, Digg, Wired, PC Mag)
• Discusses how blogs are becoming more influential than traditional media sites
• Shows inbound links in Dooce vs. BabyCenter/iVillage and how Dooce is more influential in Google
• Shows the benefit for co-branded and "author-driven" creative performed 4x better than the indusry standard
• He basically pushed Digg and TechCrunch for the entire presentation.
• Best Practices
  – Locate your brand communities
  – follow the leaders, partner with them
  – add value to existing conversations