RSS advertising finds slow growth in the U.S.

RSS symbolAccording to a report in ClickZ, Gawker Media sequentially grew its revenue from feed-driven traffic by 300 percent in Q1 2008. Gawker Sales Chief Chris Batty told ClickZ that 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.”

RSS, which stands for “Really Simple Syndication” is a method whereby users can draw content from publishers without being on the publisher’s website. To view content via RSS, you need an RSS reader, such as Google Reader or any of hundreds of other applications. It’s the heart and soul of widgets and other place-based distribution models, but it’s just not a big deal in the U.S.

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.

The U.S. is down the list — and therefore is missing revenue opportunities — because media companies here don’t care for RSS and don’t promote it. Why? Because we want people to come to OUR sites, not consume our products elsewhere (see: “Disconnect” below). Moreover, most RSS feeds from U.S. media companies are simply “teases” designed to bring people back to the site of origin, so that we can expose them to our display advertising. While this is entirely understandable from a mass marketing perspective, it is self-destructive in the long run, because people will consume media where they want to consume it. The smart media company will acknowledge this, and create ways to make money in that paradigm.

Top dog in the RSS advertising world used to be FeedBurner, until it was purchased by Google. Adsense is now the format, which leaves the experimentation up to companies like Pheedo. I like Pheedo and have always thought they’re a good partner for media companies.

But there are two other ways to make money with RSS that most don’t see. One, you can insert ads as items in a feed. As long as they are marked as advertisements, I see no ethical problem in doing this. Ads delivered this way, show a much higher click-through rate than other forms of web advertising, so it’s a no-brainer for advertisers. We don’t do this, because we’re afraid of RSS and sending people away from our (artificial) grasp.

Two, you can create and sell ad feeds. One day, this will become the new sales insert that the newspaper industry has known for so long. Everybody needs to shop, so access to information about deals and the like is important, even for people who hate commercial interruptions in their lives. Ad feeds are user-friendly, and allow people to peruse them at their own convenience. Again, we don’t do this, because that would mean wholesale adaption of RSS as a delivery mechanism.

Pheedo CEO Bill Fritter told ClickZ that he’s definitely noticed an uptick in consumer use of RSS, and that has created a 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,, and

“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.”

I’m not so convinced that it’s “finally there,” but I think that when it is “there,” and local media companies are selling it and serving the ads along with a remnant partner such a Pheedo, we’ll be amazed at what kind of money we can make by letting people have what they want — the ability to view our content wherever they choose.

(Originally posted in AR&D’s Media 2.0 Intel newsletter)

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