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Sponsorship: Monetization’s Dark Horse

Posted by Syberplanet on June 20th, 2008 - 814 views

Steven Hodson is the cranky old fart as well as respected Web 2.0 and social media pundit behind WinExtra.com. His guest post today is a continuation of a short series of articles that examine alternatives for the very advertising-dependent world of Web 2.0 and social networks. The series began with Steven’s opinions on the donation model and continued with an exposition on the concept of Freemium.

In the two previous posts here at Mashable I talked about two different methods that could be used to help monetize web start-up that typically have no business model to start with. The idea of a Donations model got slapped around a little as being unrealistic and the Freemium model seemed to garner the most comments as being a real business model.

Well in this last post of the series I want to take a look at an idea that really hasn’t been talked about all that much but is one that I am beginning to think could have a much better impact for both start-up and bloggers. First though we have to look at what the advertising landscape looks like at the moment for most start-up and bloggers.

When the word advertising is mentioned in relation to web start-ups and bloggers the first imagery is that of Google AdSense sitting somewhere on the page. It is almost the accepted norm that any project on the web is at some point going to be carrying multiple AdSense blocks. The only time this might be a different type of advertising is if there is some strong name power associated with the start-up or blog. In those cases you will usually find the ad space being handled by ad networks such as Federated Media and other high priced companies like them.

We Don’t Always Wanna Be Ad Experts
They are the rarity though and while the blogs or start-ups using them might be making some nice money as with all ad networks it is the people who own the networks that are making the real money. Ad networks; Google or otherwise, are the money backbone for just about all start-ups and blogs manly because the people running the start-ups and blogs don’t want to worry about having to track things like pageviews, time spent on the site or any number of metrics needed to calculate how much; or little, you’re going to get paid.

The two most outstanding problems with using things like ad networks of any kind is that the carrier of those ads actually make very little money and the fact is that for the most part contextual advertising is a joke. The chances of any ads really being something of interest to your readers is pretty slim; unless of course you are being represented by the big networks like Federated Media. So how do start-ups and especially the mid range blogs looking to earn a living increase their chances of serving up better ads?

One idea that has been around for a very long time in old media advertising and is now beginning to be seen in our new media is the concept of sponsorships – more directly micro-advocate sponsorships. One of the leaders in this new style sponsorships has to be Robert Scoble and his sponsor Seagate. While his work over at FastCompany.tv is where this is being tested the fact is that Robert has become the voice of Seagate in the world of new media.

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