IMV26 : Generating Revenue with RSS

The following is a transcript for IMV26 : Generating Revenue with RSS. The original podcast is located here.

Announcer:

Welcome to the Internet Marketing Voodoo podcast brought to you by MindComet. And now, here's your host, Ted Murphy.

Ted Murphy:

Welcome to Internet Marketing Voodoo, Episode 26. I’m your host, Ted Murphy, and with me today is Bill Flitter, founder and VP of Marketing for Pheedo. Welcome to the show today, Bill.

Bill Flitter:

Hey, thanks Ted, and thanks for having me.

Ted Murphy:

Bill, we’re here to talk today about generating revenue through RSS, and obviously Pheedo offers a lot of different services as it relates to RSS. I was wondering if you could start off by telling our listeners a little bit about Pheedo and the types of services you provide?

Bill Flitter:

Sure. Basically what Pheedo is, is we’re an RSS marketing company, so we focus on providing publishers with basically activity level of their feeds and analytical data on their RSS feeds. And we use that to help us make better decisions on advertising. And we provide advertising services to our RSS publishers, meaning we actually sell the inventory and match advertisers with RSS publishers.

Ted Murphy:

There’s been a lot discussions and questions surrounding RSS lately, and the different approaches that there are in terms of generating revenue from RSS. What are the different options that publishers and advertisers have?

Bill Flitter:

Well, you know, kinda boil it down to two options. One is really focusing on doing a great job of understanding what’s happening with your feed, the activity level, how often people are requesting it, looking at it, what they’re clicking on, and then using that data to insert ads intelligently into those feeds based on that data. So, just a straight advertising model where you analyze data and then insert the appropriate ad.

But if publishers aren’t ready for that option, what we always encourage them to do is, if they got the display ad side figured out, meaning the ads on their Web site, so use your RSS traffic and pump up the subscriptions to that traffic to drive more people to your site, where then that’s where you, you know, you apply your traditional monetization strategies.

Ted Murphy:

In terms of the ads that are being served up in RSS feeds, are those ads actually contextually relevant? Are you actually going through the content and displaying ads based on keywords or other information?

Bill Flitter:

Well, currently what we’re looking at is category-level targeting. And in RSS we look at more of this as a sponsorship model versus rotating many ads through a single ad spot. So, an advertiser can come along and sponsor a particular feed for X amount of time. And that seems to be working well with RSS. It’s taking what we’ve learned from the newsletter model and bringing some of what worked there to the RSS feeds.

Ted Murphy:

So, rather than a CPM or a CPC model it’s a sponsorship model? I spend a specific amount of money for a time period, and whatever traffic I’m able to get from that, that’s what I basically get?

Bill Flitter:

Yeah, and as you know, everything always backs out into a CPM, right?

Ted Murphy:

Yep.

Bill Flitter:

So, at the end of the day it’s really – it still is a CPM model. But yeah, you’re absolutely right. I mean, not saying that we don’t do CPC pricing or CPM pricing for some of our direct marketers, but for some of our specialized feeds it’s more based on sponsorship type.

Ted Murphy:

I think that could actually be very powerful for advertisers, ‘cause what it sounds like is I can actually pick the exact blog that I want to appear on, or a feed I want to appear on, rather than some other models where I have no idea where my ad is going to actually show up.

Bill Flitter:

Yeah, you’re absolutely right. And the thing we have to keep in mind is this is a new medium, and one, it’s growing, but two, we’re using it differently. We’re using it differently than say our viewing of a Web site or a blog, and we’re using it differently than we do e-mail. So, over the last two--and-a-half years that we’ve existed, we studied those user habits and will continue finding the right advertising model for RSS.

Ted Murphy:

Who’s currently pushing ads through their RSS feeds? I mean, can this be used by bloggers and podcasters and online publishers? Or is it the big guys, or is it the individual bloggers?

Bill Flitter:

Well, you know, RSS was made popular by bloggers. And that’s where we’re seeing a lot of the ad impressions coming from. And that’s where we’re seeing big growth in those types of feeds. However, commercial publishers are starting as well, and they’re testing and seeing what they can do.

But, depending what study you want to read, between seven and 15 percent of online users are consuming feeds to a commercial publisher. That’s not a lot of traffic yet to focus their ad salespeople or train their ad salespeople on how to properly sell RSS. Because it does take some specialization to understand those user habits.

And, you know, you’re in the media business, and one, we always want to try to make it easier for the media buyers to understand. But, what they do have to understand is these user habits, and it’s not like you just, you know, throw an ad on a Web site and it rotates through and you fill your campaign and away you go. It’s more, you know, how often are people opening up their RSS feeds? Are they checking it frequently? They’re scanners instead of spending a lot of time in the feed itself.

So, a stat that did amaze me was 90 percent of the people who consume feeds stay within their RSS reader, right? So, publishers really do need to figure out if they are doing feeds and sending out feeds, and if we believe that in the next year or so that feed growth will only go up, they better figure out how to create revenue from that content.

Ted Murphy:

From the advertiser’s perspective, what type of response rate are you seeing in ads that are in RSS versus what I might see in an e-mail or on a Web site? What type of click-through rates are you getting?

Bill Flitter:

Well, you know, we see some pretty lows ones, of course, right? Some offers just don’t work. Dating we tried, didn’t work. Automotive, for example though, is getting nearly a two percent click-through rate on ads in feeds. Some very targeted technology was getting over a ten percent click-through rate, which that might be an outlier, but it goes to the range.

But I would – it’s definitely higher than e-mail, and what e-mail’s been seeing. The industry standard is at less than half a percent. We’re still well above that half a percent, so less than one on average, but still pretty healthy click-through rate.

Ted Murphy:

And are you getting demographic information about the people that are reading these, you know, what’s the profile of someone who’s reading an RSS feed?

Bill Flitter:

It’s your typical early adopter audience, skews high male, age group of 18- to 34-year-olds, college educated, post-graduate degrees, and high income.

Ted Murphy:

Nobody wants to hit that market.

Bill Flitter:

Yeah, exactly. Yeah. That’s why our inventory, even as we’re approaching the holiday season, people are pre-buying, which is very exciting.

Ted Murphy:

So, again, from the view of the advertiser, what are the different options that they have in terms of using the medium? You mentioned banners, is it banners and text and multimedia, or, you know, what could happen?

Bill Flitter:

Yeah, great question. We do a mix of things. We can do pure text, all right, we can insert that into a feed, and that actually has a lot of benefits. The negative side is you can’t rotate text, obviously, right? So, once the hard-coded text is in feed, it’s there, and that works great for content-rich type advertisers, or if they have white paper content. Or the reverse of that is saying anything that doesn’t have an expiration date, right? A special offer, hard-coded text won’t work.

The other option is you can take that text and we can convert that into an image and then insert that into feeds. You can do 468 by 60 type display ads in feeds. Right now we’re also syndicating video in feeds. The craze of video, our advertisers are really enjoying that. You can actually include doing an attachment, what we call an enclosure, in an RSS feed to a PDF, right, or video or audio. So, a good variety of different ad options are available. And that’s really going to depend upon the publisher as well, what they’ll accept.

Ted Murphy:

Always one of the major concerns for advertisers and marketers is showing ROI. What type of reporting can you provide back in terms of being able to demonstrate the return on investment for the advertising dollar spent?

Bill Flitter:

It’s all the traditional reporting that they’re used to seeing online. But what we had to do is we’ve built an ad server from the ground up that’s unique to RSS, because you can’t take your traditional ad server and effectively serve ads into feeds. So, that’s why we exist, is to take care of that problem. And we, of course, mapped it to what everyone already knows, right? They want to know how many clicks they have, impressions served, and budget spent. Even if it’s a video or audio it’s, you know, they’re looking at maybe downloads, for example.

Ted Murphy:

So, what evolutions do you see happening in the future, both for Pheedo and RSS marketing in general?

Bill Flitter:

I think what we’ll see, especially in RSS, is it’ll be a richer environment where rich media will become kind of a standard in feeds. I think we’ll see the birth of individual feeds, so I can target one-to-one, versus kind of where RSS today is one-to-many.

For Pheedo, you know, we’re focused on helping publishers create revenue and traffic from their feeds. So, you’ll see a lot of unique ad units coming from us to help publishers drive revenue using RSS in unique ways. It’s not all about putting an ad in a feed for us. We have some pretty exciting stuff coming, leveraging what RSS is really good at, which is information delivery.

Ted Murphy:

What about the concept – I’ve heard people talk about this where you’ve got all these technologies now where you’re delivering these RSS feeds and you’ve got these content aggregators. Do you think that ultimately this is going to have an impact on people actually going to destination Web sites? Or are they just going to start consuming all their content through RSS feeds?

Bill Flitter:

Well, that’s my hope.

Ted Murphy:

That would be a beautiful world for you guys, huh?

Bill Flitter:

Exactly. Yeah. Let’s hope they do that. The reality is though, it is a clean channel, and it is great for getting content to the end user, period. Is it a great communication tool like e-mail is? Not necessarily.

But if you’re wanting to consume content and stay up-to-date – and that content can be words or it can be audio or video – I think with IE7 coming out we’ll see an uptake in the usage of RSS, because it’ll be much easier. It’ll be built in. Or at least people will be more exposed to it than they’ve been before, and the average person. We’ll get out of that early adopter market to more of a mainstream market overall.

Ted Murphy:

So, what are the top three tips that you would give advertisers who are looking to use RSS for marketing?

Bill Flitter:

One is start learning, right now, before we see, you know, IE7 come out. I think that’s very important to get that early learning and early understanding of what works, what offers or what language works. So, you know, test it. That’s my first one.

Second one is to think about RSS from the user perspective. They want quick information and a link out, right? So, make the content very relevant. And what we always say is “Tell, Not Sell,” in an RSS feed. So, meaning, don’t say, “Click Here, Buy Now,” type of offers, right? Give me some information about your product or service. Think about it from that perspective.

Don’t try to sell on the first ad. Because with RSS people come back to that feed; they’ve opted-in to receive this information. They’re highly engaged. Just because they don’t click on it the first time doesn’t mean they’re not going to do it even on the third and fourth time. They will do it if it’s a compelling offer and if it’s relevant to them.

So, the beautiful thing about RSS is you have a captive audience. You don’t know if they’re going to come back to your Web site, but here at least they’ve made a decision with RSS that says, “Yes, I’m going to commit to you. I’m going to subscribe to your feed, and I want that content.” So, you got to build that relationship. The advertiser needs to understand that as well.

And then I would say that the – that was a long tip, wasn’t it?

Ted Murphy:

A great tip though.

Bill Flitter:

And the last one is to think about, again, what we learned over the last few years in e-mail. Let’s keep this a clean channel, right? One thing you have to remember is that people control this environment. They decide who they let in. And once you lose that trust of that end user, they’re gone, and there’s no communication with that person.

So, for example, in the e-mail world, right, I opt into an e-mail address and I decide well, this content isn’t relevant to me anymore, so I’m going to opt out. Well, that publisher and/or advertiser still has my personal information, and they can do whatever, right? That’s how we get spam in our inbox.

With RSS you don’t have that. I subscribe to a feed and there’s no personal information exchanged. I can easily unsubscribe. So, it’s putting pressure on advertisers and publishers to really make sure that we have the right mix of ads to content, and also what the ads say themselves. Again, going back to my previous tip is “Tell, Not Sell.”

Ted Murphy:

Well, Bill, I appreciate you coming on the show today.

If people have questions about our RSS marketing, you can always give us a call toll free at 1-866-206-4461. If you got some good ones maybe we’ll have Bill back on the show in the future.

You can always check out Pheedo at pheedo.com. Go in there and check out their different advertising programs. Bill, hopefully we can have you back one time.

Bill Flitter:

I’d appreciate that. Thank you for your time.

Ted Murphy:

Thank you.

Announcer:

For more information on this week's topic, visit http://www.InternetMarketingVoodoo.com. This podcast has been brought to you by MindComet, the Relationship Agency.

[End of Audio]

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RSS, RSS Feed,Internet marketing,RSS advertising, RSS marketing, Pheedo