October 29, 2010

The Business Case behind the ComputerWeekly IT Blog Awards

In 2008, when I still wrote for Capgemini's technology blog, that same blog became the runner-up (no.2) for ComputerWeekly's (CW) IT Blog Awards in the Corporate Technology Blog category. When I heard our blog was shortlisted, I immediately started to proudly spam my entire social network to ask them (actually, it was more like begging) to vote for my blog. That must have been very annoying for a lot of people. I find it very annoying myself now.

When the blog I was part of became runner-up and even winner in the year after, I was, of course, thrilled, but also, a second thought started to nag inside my head. A cynical thought. I couldn't get rid of the feeling that my pride was very smartly being taken advantage of. And the more I think about it, the more I am starting to admire what is going on. Why didn't I think of this myself!!?

To prove my point, I did a little research into web advertisement. A web ad rates from about $0.50 (for banner ads) to $2 (for skyscraper ads) per 1000 views. CW's IT Blog Awards pages generally have 2 banner ads, a skyscraper add and several other ads. If I counted correctly, there are 15 pages about the blog awards: the home page and 14 category pages. Each of these pages is worth about $5 per 1000 views in terms of ad value. Now, all that these pages need are visits, lots of them. And how do you achieve that? Well, by convincing people to visit your pages, or even better: by convincing other people to put big, red "Vote for me" buttons on their own web pages (blogs and such) and have these people beg their own audience to please click on that button because it will help boost their already enlarged ego.

These buttons are nothing more than web ads rated $0! Yes, that vote button is a free web ad that you, the vain, proud and rather gullible blogger, are only too eager to put on your blog, at no cost.

So, how much money could CW make with this? Let's see, there are 14 categories, each listing 10 or more nominees, amounting to about 150 blogs. Of course, these blog's owners are flattered and will gladly put the vote button on their blog and spam their valued audience (moms, dads, colleagues, friends) through Twitter, Facebook, Google Buzz, and whatnot to boast about their nomination and invite people to click on the button. Suppose that each of these buttons generate an average click count of 1000. That adds up to 150.000 page views on CW's IT Award pages, leading to a transfer of a total of $750 to CW's bank account. And as a reward, the winners and runner-ups get to put yet another zero cost ad, now called "badge", on their blog that will definitely get a very prominent spot for at least a year (till next year's blog awards). In the end, there are 14 badges that could well get at least 5000 clicks throughout the year, earning CW an extra $250.

So CW could make $1000. It could be a lot more, or less, but that's not the point. My calculations are completely based on wild guesses. The point is that CW is an online magazine, which is a company for which advertisement income forms a major component of it's business case. CW has simply found an ingenious way to make some money off of bloggers at no extra cost. They are just milking a long tail. And they are nurturing that same long tail as well, because the winning blogs will grow more popular and get larger audiences that CW can milk in the next year. Very clever, CW obviously understands how to make Web 2.0 work for them. 

2 comments:

Steven Finch said...

Most of the blogs in the competition arent really worried about the CW awards. Im yet to see a blog that has the banner on their site.

Plus, its good that CW could make $1,000, but Im sure hosting the awards will come at a much greater cost. I think they are simply trying to run something fun.

Mark Nankman said...

Steven, thanks for your comment. I agree with you on the fun part.

I am not saying this is a bad thing. I am just saying that there is a smart long tail based revenue model behind it. And, of course, I am being a total cynic, but that is fun too :-)