Chas Edwards talks about Federated Media, Comscore, and advertiser innovation

Chas Edwards is the CRO and Publisher for Federated Media, the author driven ad network founded by Boing Boing band manager and Web 2.0 proponent John Battelle.
Written by Alan Graham, Contributor

Chas Edwards Chas Edwards is the CRO and Publisher for Federated Media, the author driven ad network founded by Boing Boing band manager and Web 2.0 proponent John Battelle. I always thought that Federated was an interesting company because they  had a focus on talent, not just page views. In fact, many of the small bloggers I featured in my book back in 2003/2004, ended up web celebrities and Federated clients.

Chas maintains his own blog ChasNote, but he'll also be guest blogging here this week. First, let's start out with an interview.


Alan: Give me a little background on Federated.

Federated Media is an online media company that pulls together the leading independently-published websites (such as Ars Technica and PROTRADE), blogs (such as Boing Boing and Dooce), social-media sites (such as Digg, Newsvine and Metafilter) and video podcasts (such as Diggnation and Ask A Ninja) into portfolios or "federations" of properties reaching similar audiences. Each site and video producer is hand-picked for quality, influence and reach so that brand marketers can do business with FM-affiliated websites or video programs with the confidence that they are associating their brands with quality content, marketing themselves in relevant and safe environments, and doing so with a high degree of scale and marketing efficiency.

Alan: You seem to have more of a boutique approach to advertising than say Google Adsense. Can you tell me more about your philosophy and approach to publishers and advertisers?

Very much so.  Somewhere in the range of 500,000 websites have joined Google's AdSense network.  Even a smaller ad network like AdBrite has more than 20,000 sites.  FM has just over 100.  Because many of those sites (say Digg or Instructables or Boing Boing or AutoSpies) attract large audiences, FM can provide marketers with scale -- visitors to those 100 or so sites view nearly 400,000,000 pages per month. 

But FM is very much a "quality boutique."  We offer independent publishers services beyond ad sales, such as business planning, marketing and business development and tech services, so we need to be very selective about the sites we take on.  And because we work with marketers on brand programs -- as opposed to the direct-response and CPC campaigns handled by Google and the ad networks -- we need to vet each site that we take on.   This kind of vetting still requires humans, and we think this is a good thing!

Alan: Tell me a little more about your deal with Comscore.

We view Comscore as the best in the business when it comes to ad-buying metrics online, so we've been engaged with them since the inception of FM.  Even the best methodologies in place today -- techniques pioneered by Comscore -- struggle with accurate measurement of vertical-content sites, mid- and small-sized sites, and sites that more engaged audiences who participate in the content creation like blogs and social-media sites.  Comscore and FM have teamed up to build a methodology that will do a better job following audiences as they spend more time in a more fragmented, more participatory media landscape.

Alan: Traffic is a large part of your business, so do you participate in helping your publishers grow to make them more appealing to advertisers?

The first part of the equation is sharing knowledge -- from one FM author to another or from an in-house FM expert to a member of the broader FM family.  For example, understanding how search engines index and organize digital content -- and publishing your site in such a way that the search engines can find you -- can double the traffic at a mid-sized site in a few months.  FM sites within the same federation also cross-pollinate in a variety of ways, including a widget on each site that introduces readers to other similar sites in the FM family.

Alan: So besides page views, what are advertisers who work with Federated looking for in a blog/site?

Traffic is on the list, but not at the top of the list, when marketers work with FM.  In the case of Absolut, they attached their brand to thought leaders in a variety of categories to get their customers thinking about -- and sharing -- their absolute (with an "e") favorite things.   For example, Absolut ran co-branded ads on Metroblogging's city sites that excerpted previous Metroblogging posts on the "absolute best" bars and restaurants in certain locales.  Similar units ran on Boing Boing ("absolute most wonderful things") and trend-tracker site PSFK ("absolute style").  Because the co-branded ads included internal links back to editorial stories on each site, engagement, ad clicks, and participation in Absolut's "tell us your Absolute" site was higher than traditional banner ads, but a simple "cost per click" metric might look less efficient than buying keywords across tens of thousands of sites via Google AdSense.

In a similar vein, Cisco worked with a dozen FM authors who are business and tech thought leaders to prepare the wider tech / business audience for their "Welcome to the Human Network" campaign.  A month before the official campaign launched, Cisco invited FM authors to write copy for the Cisco pre-launch ads that would run on their own sites.  But rather than "ad copy" touting Cisco products, the authors were invited to pen their own definitions of "the human network" -- very, very broadly defined.  Readers at each site could view other authors' definitions, vote on their favorite, and edit a definition Cisco posted to an open wiki page.  The campaign drove PR coverage at dozens of blog sites, stimulated an entry for "human network" in Wikipedia, and increased PageRank (ie, organically affected "search engine optimization") for the Cisco landing page.

Alan: Are they more willing to take chances or try new things with you?

Brand advertisers love innovation, provided that innovation comes with scale, quality and safety.  Two years ago, the only scalable platforms were the portals and the ad networks like Google AdSense or AOL's Advertising.com -- and the ad networks can't guarantee quality of safety.  This is why the brand advertisers have done business with a limited set of top names -- ESPN, CNET, Disney, etc -- and the rest of online advertising has been pay-per-click direct response where the only metric has been the cost for that click.  FM's "quality boutique" approach has been very appealing to brand marketers, which gives us an opportunity to partner around innovative, integrated programs without a lot of risk.

Any advice you want to drop here for publishers?

There's been a lot of talk lately -- at the Blog Business Summit in Seattle last fall and by Jason Calacanis earlier today in a Business Week article on FM, to name two -- that independent publishers should hire their own sales, marketing, ad-serving and AR collections staff as soon as they hit a million pageviews per month or $500,000 per year in ad revenue.  On the whiteboard, that math works fine: 1,000,000 pageviews per month, 3 ads per page, $15 CPM, assuming you sell out 100% of those avails, that's $45,000 per month or $540,000 per year. 

That would pay the salary and commission for two strong sales reps with a modest salary left over for the site's author (but notice there isn't any money for the person to chase down collections on that revenue!).  In reality, it's hard for even the top digital brands to sell out 100% of their inventory at $15 CPMs.  The bigger challenge, though, is that marketers and media buyers don't have the bandwidth to meet with thousands more media partners each month, each with limited audience.  They need media partners with scale, which is why we've gone with a "federated" approach.


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