Is Ad-Supported RSS the Next Big Thing?

  |  February 3, 2004   |  Comments

Publishers like RSS because it gets through spam filters, but will itmake them money? A new ad network aims to help.

The use of RSS technology has been touted as a spam-free alternative to e-newsletters but the concept of has been dogged by certain limitations. Chief among them, for publishers, is an advertising model to support the popular feeds. A new online ad network, RSSAds, is gearing up to help publishers get over that hurdle.

The San Francisco-based company is hoping to capitalize on the growing buzz surrounding RSS, the XML-based technology that pulls headlines and text from Web sites and displays them on users' desktops or Web sites in RSS readers, or aggregators.

The four-employee firm is still two months away from an official launch, but it has already signed up publishers numbering in the double digits, founder Chad Williams told this publication. Williams is currently CEO of another Bay Area Internet start-up, PayDemocracy, and says formal leadership of the new venture hasn't been determined.

RSSAds has developed technology that will insert ads into relevant content such as news stories and headlines, which can then be seamlessly downloaded by Web users and bloggers and displayed on their desktops and sites. The ads appear as text, "so it's less intrusive," Williams said.

A number of publishers, such as InfoWorld, LockerGnome and PaidContent.org already have ads in their RSS feeds, but RSSAds appears to be the first to aggregate publishers into a network.

RSS feeds are getting a lot of attention from marketers and publishers these days, since they avoid often spam-clogged email inboxes. Adding fuel to the fire, RSS feeds are growing more accessible to average Internet users. Yahoo just launched a beta test of a module incorporating RSS technology. It lets users pull headlines and text from other sites and display them on their My Yahoo pages.

RSS stands for Really Simple Syndication or Rich Site Summary and was developed in the 1990s by Netscape. The technology has been widely adopted by bloggers as well as by established publishers such as the BBC, Yahoo, CNN and JupiterMedia, this publication's parent.

"We've signed up some entrepreneurs who have blogging networks and people who have individual blogs on various topics," Williams said. He declined to give more specific information because the contracts are still being hammered out. The company will not confine itself to blogs, he said.

"Our site is a central hub connecting buyers and sellers of advertising in RSS feeds," said Williams. "We're providing a service for publishers to easily sell ads in their RSS feeds. When an ad buyer purchases an ad, we take a transaction fee. They can track the ads. We provide reporting."

Although the tracking of content and ad viewing has always been one of RSS's weak points, Williams says his company tracks ad views by means of a simple transparent image file. Whenever the RSS reader calls back to the server for the image, it counts as an ad impression. According to Williams, RSSAds will sell ads using cost-per-click, cost-per-time-period, cost-per-insert and cost-per-thousand impressions models. But Williams believes the pay-for-performance ads will be the most popular.

Another common concern about RSS is that it uses up a great deal of bandwidth, because, for example, one aggregator might check every 15 minutes for content. As the HTTP 1.1 protocol comes into wider use, however, Williams feels this will be less of a problem. "As people begin using HTTP 1.1, that functionality will ask a given computer if a document has changed, instead of downloading the entire file," he said.

"RSS has taken off quite a bit recently," said Marc Ryan, director of analysis for Nielsen//Net Ratings. "But it's still early in the life cycle. As the heavyweights such as Microsoft get involved, the market will mature."

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