RSS Advertising Shows Signs of Life

RSS advertising doesn’t get much attention these days, but that doesn’t mean it’s a bust as some have said. On the contrary, a mounting body of evidence suggests in-feed ad delivery is a growing opportunity for marketers and publishers alike.

The latest indicator: Gawker Media sequentially grew its revenue from feed-driven traffic by 300 percent in Q1 2008.

Gawker Sales Chief Chris Batty said the company is now pulling an average CPM of $4 or $5 for its RSS inventory, “a little less than we get on the sites.”

Batty compared RSS advertising’s low profile to that of podcasting, its multimedia cousin. Both syndication channels emerged around the same time.

“RSS and podcasting have both gone a little bit silent,” he said. “Podcasting is a bust, and RSS was lumped in. It’s got a few unique challenges…but it has grown and become a part of revenue mix for publishers.”

It had better be, because it’s certainly a larger part of publishers’ traffic. Thirty-four percent of global respondents to a March social media survey from Universal McCann said they had “ever” subscribed to an RSS feed. That represents a large jump from the previous year’s findings, when the agency found just 15 percent said they had subscribed to a feed. The data were gathered from 17,000 Internet users in 29 countries, aged 16 to 54.

However the U.S. ranks far down on the adoption list, with penetration of only 18.6 percent. That’s tiny compared to RSS-addicted nations like Russia (57 percent adoption), Brazil (55 percent) and China (54 percent). Additionally, of those who access feeds, only 25 percent of U.S. respondents said they do so daily. Another 35 percent said they access them weekly, while 16 percent said feed reading is a monthly endeavor.

For marketers, the creative limits of feed advertising remain a sticking point. Kelly Twohig, SVP, digital activation director at Starcom Worldwide, said text ads and simple GIF banners are a hard sell with clients.

“We haven’t seen [RSS] move as rapidly as other things have,” she said. “It’s absolutely on our radar but still not the easiest thing to sell.”

At least marketers have heard of RSS. That wasn’t true a couple years ago, according to Bill Flitter, CEO of RSS ad network (and Gawker partner) Pheedo. Back then, he said, “you’d have to do the whole pitch on RSS, then the whole pitch on the company.”

Yet it’s true that RSS can’t handle some of the staples of online advertising, including Flash, IFrames and JavaScript.

“That’s why we exist frankly,” said Flitter. “It’s a pretty difficult problem serving ads in feeds, because you don’t have the traditional ad serving methods to do that. The ad servers break down.”

Gawker’s Batty argued growth in RSS advertising has also been constrained by the dominance of FeedBurner, acquired by Google a year ago. Back then Gawker sold its RSS inventory through FeedBurner’s network, and commanded CPMs in the $7 to $8 range. But that rate fell to around 30 cents when FeedBurner substituted AdSense for its own sales efforts, Batty said.

That might have been a powerful move, but Batty said Google put an end to FeedBurner’s human ad sales efforts before fully automating the ad placement process for advertisers. The result: lower demand for inventory and lower prices.

“If you want to buy RSS you need to pick up the phone and talk to your Google person,” Batty claims. “At that point you take the one million AdSense users down to 10,000 who can get a phone call returned — and 10 percent of that who can do anything.”

FeedBurner executives didn’t respond to a request for comment, but FeedBurner recently indicated in a blog post that RSS advertisers would soon be “blessed with good fortune” on the feed advertising front.

In any case, Flitter indicated Pheedo has definitely perceived the uptick in consumer use, which has resulted in a near-glut of RSS ad inventory. Pheedo sells about 50 percent of the inventory it represents directly, and for the rest it pulls a feed from ad partners including MIVA, Ask.com, and Business.com.

“Some of our publishers are seeing their page views from RSS are nearing page views of Web sites,” he said. “The market’s finally there. The growth is finally there.”