Technorati Hinges New Ad Offerings on Data

Technorati launched its ad network in June, and now aims to put the data it collects on blog content and readers to use in an expanded network. The firm’s ability to introduce new blogs into its network will be tied to its plans for a new form of ad targeting and a new widget offering.

Until now, Technorati has allowed advertisers to place standard ads in its relatively small ad network, and sponsor channel pages — essentially collections of dynamically-updated blog chatter organized under niche category. Hummer, for instance, sponsored a channel dedicated to social conversations about the NFL Draft.

The firm, which has 10 salespeople, is currently working with advertisers including T-Mobile, Chevrolet, and Verizon, and has served others like Toyota, Acura, Nike, Universal, and Microsoft. Later this year, those advertisers should have access to an array of new opportunities through the blog search site and ad firm. Those will hinge on data.

Technorati CEO Richard Jalichandra believes the company holds the key to a new form of ad targeting that takes contextual targeting to a much deeper level than it’s at today. It plans to target ads based on tags attached to blog posts. Tags enable automatic categorization of blog posts or other social media content.

“Think of these as contextually targeted keywords,” said Jalichandra.

For instance, if a post has been tagged with the terms, “sedan” and “Acura,” Infiniti or Volkswagen might want to target ads there. “What we’re talking about here is particularly good for brand advertisers,” he continued.

Since the targeting system could expose new places with contextual relevance for ads otherwise ignored, there is potential for it to expand reach for blog advertisers that now rely mainly on more traditional contextual targeting, based on the subject matter of blogs.

“Because we know every blog that exists and what their subject matter is…we can go further down the tail,” Jalichandra said.

In theory there could be potential for more reach to result from the tag-targeting, said A.J. Schuler, Psy. D., principal of CommonSense Media, an ad agency representing blogs such as Firedoglake and MyDD, to advertisers. “It all depends on the implementation, how it fits into the content, the layout, and a given site’s brand and market positioning.”

Whether bloggers accept the new targeting capability may depend on how their audiences react, said Schuler. “For blogs that rose as an alternative to traditional media, it may be a problem because it creates a far more direct incentive to write about certain subjects for pay.”

Technorati isn’t planning to pay bloggers to use certain tags, but they do stand to gain when more ads are targeted to their posts. However, Schuler added, “If the bucks-for-tagging payoff is large enough, some people, naturally, will change the way they write and what subjects they cover. It’s just human nature.”

Another key to Technorati’s scheme: authority rankings. The company aims to limit tag-targeted ads to blogs with high authority rankings, meaning they’re considered valuable to readers. The intent is to help weed out poorly-read or just plain bad blogs.

In addition to creating reach through the tag-targeting system, the firm plans to expand it the old fashioned way, by adding more publishers. Inherent in that goal is adoption of its upcoming widget offering.

“It’s a good entrée to invite people into the network,” said Jalichandra.

Technorati has offered widgets for the past couple years enabling things like tag clouds, authority rankings, or favorite blog posts, but hasn’t focused much on the products since then. That will change. In conjunction with its other initiatives, the firm plans to launch a “universal widget,” allowing people to choose which elements they want to include in the widgets.

The plan is to invite those highly ranked bloggers who come to upload the new widget to join the network. And, yes, affirmed Jalichandra, the company will eventually run ads in the widgets, too.

Technorati is also set to launch a conversation-oriented ad format later this summer. The standard display units will present snippets of recent blog posts, and upon rollover, users will be able to add to the conversation. In December 2006, PR outfit Edelman linked with RSS feed platform provider Newsgator to offer a very similar discussion-based ad format.

Since it’s essentially a rich media unit, the ads could run in other networks, according to Jalichandra. The firm has purchased media from other sites outside its own network on behalf of its advertisers to broaden reach.

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