Business models for operating blogs

Introduction

Blogging has emerged as a multi-faceted online networking tool for socialisation and organisational linkage purposes in the public and private sector. Blogging as a tool for social linkages stemmed from the first blogs as comprising the journals or diaries of individuals open for public viewing. Since the blogs contains options for comments, this allowed people who know or stranger to the blogger to comment and connect to the blogger. This happens on a global scale resulting to the multiplication and overlapping of linkages.

However, blogging has evolved in functionality, particularly in the field of business. Now, blogs not only constitute channels for social relationship building but also comprise a venue for business advertising and sales activities. This operates through the idea that business firms seeking to expand or widen their online market can tap into popular sites with a vast number of regular following through advertisements. Blog content has also evolved to accommodate product, service or company reviews, commentaries, tips, or guides on a vast range of business related topics that support the promotional activities of business firms.

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Popular & successful blogs in the world

Since enterprises prefer to advertise in blogs with the most number of readers, whose profile matches the target market of the firm, readership volume for blogs becomes an important consideration. The popularity of blogs is determined in three ways: access statistics, citation frequency, and blog affiliations.

First is through the volume of people accessing the blog documented automatically by the website’s functions. Popular websites usually accumulate millions in blog access statistics in a year. The most popular blog according to Technorati in 2006 is the blog by Xu Jinglei.

However, this method of determining popularity does not provide accurate or sufficient measures to support blog popularity because this does not ensure that all the people accessing the blog actually read the posts or found the content useful especially in their purchasing decision.

Second is through the frequency of citations made of the blog in the World Wide Web. This involves the use of search engines to look into how many other blogs or sites have referred to the blog. In using the Google search engine to determine the frequency of Internet citations for the blog Boing Boing, the blog rated by Technorati as the leading blog in 2005, results showed that including the two links found directly leading to the Boing Boing blog, there are 2,710,000 citations for the blog.

This provides a significant measure of popularity since the number shows that more than two million other sites refer to this blog through reviews, commentaries, recommended links, or other purposes. In searching the blog name in Google, the complete blog was placed in quotations marks to ensure better accuracy of results.

Third is through blog affiliations such as blogrolls and permalinks. Blogrolls are lists of links to blogs [See Figure 4 in the Appendix] while permalinks refer to a kind of URL for a particular blog posting that lasts for a longer period to allow viewing for within a certain period. Blogrolls supports the popularity of blogs by the referring site riding on or enhancing the popularity of the blog. Permalinks allows a long period for blog post viewings so that popular posts can be viewed by more people increasing the popularity of the site.

Blog affiliations provide an important measure for popularity by indicating that some blogs are actually being read and found to be important to refer to other people. One site that collates news and information from blogs is tailrank.com that has a long list of blogrolls.

To derive accurate popularity data, a number of websites conduct or feature blog popularity statistics that use one, two or all of the popularity measures discussed above. Some of the more established websites are tailrank.com, Technorati.com, Alexa Internet, and eBizMBA.com. The table below summarises the most popular blogs according to four different websites.

Characteristics of popular & successful blogs

Although these most popular blogs fall under differenct categories, there are common qualities that explain the popularity of these blogs. First, the blog names or titles clearly provide the topics being focused in the blogs. Common topics in three of the four website rankings are money and how to earn money, technology or gadgets, and leisure or entertainment. Concurrently, it is also these three topics that constitute the most popular concerns of the world population. This means that by covering these topics, these blogs were able to gain a high number of viewers, citations or links.

Second is the catchy blog name or title. Although there are millions of blogs discussing money, technology and leisure, these blogs reached top ranking through their catchy names so that in selecting from a list of blogs on these topics based on search engine results, the most appealing blog name or title would likely be selected. Third is the timeliness and relevance of the topics posted in the blogs. All these top blogs featured by the four websites are updated on a daily basis. To allow for timeliness, these blogs feature the most recent posts upon access and arrange the previous blog postings according to time period such as per month and year.

Fourth is the credibility and trustworthiness of the sites based in part on the reputation of the blogger. Most of these top blogs have become associated with a single or small group of bloggers that have established a good reputation in the blogosphere. This means that blogs that become popular are those that provide sufficient background or profile of the blogger or bloggers.

Fifth is the strength of linkage of the blog to the blogging and online community. Links are established through cross-blog citations or blogrolls. This creates an impression in the blogging world, including blogger and viewers, on the role, status or position of the blog and blogger in the virtual community, which in turn influences the perception of reliability and accuracy.

Benefits of blogging to business firms

Due to the tie-up of blogging and enterpise, a number of benefits for businesses emerged by networking with blog service providers (BSPs) and bloggers. These benefits encompass sales transaction links and marketing. The benefits derivable by business firms from linking with blogs are parallel to the various blog models.

First benefit is having an additional channel for advertising. Depending upon the popularity and focus of the blogs, advertisements could be through banners that appear on the homepage and remains on the page even if the viewer is already navigating the site to lengthen the exposure of the viewer to the advertisement by catching attention, niche advertisements targeting the viewers of blogs specialising on particular topics, or sponsorship advertisements by business firms sponsoring blogs exclusively providing reviews or commentaries on the firm and its products, services or brands.

Second benefit is by having an indirect sales channel through the placement of product links, special offers, and banners that when clicked leads to the firm’s online sales site. This works best in blogs catering to a particular product, service or concept or blogs targeting a particular group of viewers consistent with the niche market of advertising firms. Third is by having channels for reviews and commentaries that could enhance the value of products or services. This works especially when the blogger holds a certain degree of expertise over the product, service or business concept or the blog provides highly reliable and accurate information on the firm’s industry or products.

Fourth benefit is having an added public relations venue. Promoting the company and its product and service offerings constitutes a move that brings the firm, products or brands closer to the targeted and potential customers. This would then translate to higher revenue generation. Fifth benefit is having a reliable external source of lead information.

There are blogs that primarily engage in lead generation by specialising on an industry or product. Information sharing is either offered to business firms or contracted by companies. Lead generation is important to firms in determining their competitive position and as a measure for determining the achievement of their business goals.

Although there are no exact figures on the expected increase in profit margin by engaging in the network model of blogs, the link between advertising or marketing through blogs and profit margin is positive. However, the extent of the increase in profit relative to the marketing cost depends upon the selection of the appropriate blogs and blog models.

Normally, the decision on which blog or blog model to select depends upon the scale of viewers of the blog together with the consistency of the population targeted by the blog with the targeted or potential market of the business firm engaging in this network channel. This means that while profitability is imminent, its actualisation highly depends upon the marketing decisions of the company in selecting its blog media.

Model of blog service provider (BSP), blogger & enterprise collaboration

Based on the characteristics of blogs and the benefits they provide to enterprises, the model that fits this relationship is an extension of the relationship marketing model. Originally, relationship marketing refers to the principle of conducting business strategically by focusing on the maintenance and improvement of existing relationships with consumers instead of creating links with new consumers. This model emerged from the direct selling model, which explains its focus only on the maintenance of existing relationships.

Relationships with a great number of people are difficult to achieve in direct or personal selling. However, with the Internet virtual relationships are easier to create or maintain because of real time communications and online sales venues. The expanded relationship marketing model involves the creation and maintenance of multi-party relationship by the business firms with the purchase of creating and communicating value to consumers. Business firms can engage in a relationship with blog service providers for the inclusion of their advertisements or links in all hosted blogs.

This maximises the exposure of a wide range of viewers to the firm, brands or products that supports the creation of relationships with new consumers and the provision of a link for existing consumers wanting to engage in online transactions. This relationship creates added value to consumers by bringing to them information and the means of making an actual purchase at their convenience. Business firms can also directly engage in a working relationship with bloggers for the posting of advertisements, reviews and commentaries on the company as well as its brands and products.

This relationship communicates value to consumers through information and reviews to support consumer purchasing decisions by differentiating the brand or product from its competitors. Business firms also engage in direct relationships with consumers through its website, with the sales and after-sales services corroborating or fulfilling the value communicated through blogs. Through the wide reach of blogs, business firms are able to create relationship with new consumers and maintain existing relationships as long as it can meet value communications.

Conclusion

Apart from the benefits previously discussed, blogs are still evolving in functionality. This means that more benefits, especially niche marketing benefits catering to the specific target markets of business firms, would likely arise in the future. As the number of blogs and opportunities for blog-enterprise collaboration increase resulting to intense competition among blogs with similar contents or functional structure, since there are more blogs and bloggers as well as linkage opportunities, providing viewers with the option to select from the long list of blogs and bloggers, bloggers would likely be pressured to innovate on new blog types and structures such as specialising on niche markets or specific topics and target audiences.

Competition improves blog-enterprise partnership by catalysing improvements to the blogging system and processes together with the creation of better marketing opportunities for business firms through reliable and trustworthy blogs specialising on a particular product, service, technology, process, system and other topics.

These developments would influence the online marketing activities of enterprises through more channels with greater reliability or credibility. Moreover, the popularity of blog-enterprise collaboration would likely lead to the development of best practices to guide business firms in utilising this new network channel. The experiences of earlier business firms that engaged in blog advertising or marketing provide valuable insight into new models of blogging in the business context.

References

1. Blood, R. (2002). The Weblog Handbook: Practical Advice on Creating and Maintaining Your Blog. Boulder, CO: Perseus Books Group.
2. Bruns, A., & Jacobs, J. (eds.) (2006). Uses of Blogs. New York: Peter Lang.
3. Gordon, I.H. (1998). Relationship Marketing: New Strategies, Techniques and Technologies to Win the Customers You Want and Keep Them Forever. New York: Wiley & Sons.
4. Holtz, S., & Demopoulos, T. (2006). Blogging for Business: Everything You Need to Know and Why You Should Care. Englewood Cliffs, NJ: Kaplan Business.
5. Kline, D., & Burstein, D. (2005). Blog!: How the Newest Media Revolution is Changing Politics, Business, and Culture. Wilton, CT: Squibnocket Partners, L.L.C.
6. Marlow, C. (2004). Audience, structure and authority in the weblog community. Presented at the International Communication Association Conference, May, 2004, New Orleans, LA.
7. Weil, D. (2006). The Corporate Blogging Book: Absolutely Everything You Need to Know to Get It Right. Willow Creek, PR: Portfolio Hardcover.
8. Wright, J. (2005). Blog Marketing. New York: McGraw-Hill.

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