Federated Media Denies its Top Blog Publishers are "Sell-Outs"
Federated Media, the advertising network created by John Battelle, the A-list blogger and Google book author, has hit back at accusations that its top web site publishers have become "sell-outs."
Chas Edwards, the president of Federated Media said that there was nothing wrong with running Microsoft advertising banners on high profile web sites such as TechCrunch, GigaOm and Venturebeat, which included quotes from the publishers of those web sites.
On Friday, Valleywag published by Nick Denton, head of the New York based media company Gawker Media, criticized the advertising campaign. Mr Denton wrote that Federated Media had mounted a slick campaign but had gone beyond the acceptable limits for product endorsements by journalists.
John Battelle's ad network has roped in some of its star writers to an ad campaign on behalf of Microsoft's "people-ready" catchphrase. In the ads, and the companion site built by Federated Media, Michael Arrington explains how his Techcrunch site became "people-ready". "When is a business people ready?" asks Gigaom's Om Malik. "The minute you decide to strike out on your own..."
Mr Edwards answered the criticism on his blog "ChasNote - Metrics, successes & flaming disasters in digital marketing."
In a Sunday morning post titled: "Does Relevant Advertising Mean Selling Out?" he argued that it was OK to run the Microsoft campaign because Federated Media had run a similar campaign for Cisco last Fall and that "readers seemed OK with the project."
He then made a personal attack on Mr Denton saying that there was "a fair amount of evidence Denton is raising a stink all by himself."
Or perhaps his disdain for the advertisers that support his business (Gawker Media), our business (Federated Media), and every other ad-supported content business online or offline, is so great that he feels they don’t belong in the conversation at all. Except, of course, the conversation in which they agree to pay him, then shut up.
In Mr Denton's original post he did not use the term "sell-out." He did not attack Mr Edwards or anybody at Federated Media. He wrote that he could not blame "Battelle's team for latching on to this idea."
His rebuke was for the writers.
One would have thought that tech opinion-leaders as influential as Om Malik and Paul Kedrosky would ration their credibility more carefully, and reserve it for companies and products for which they felt real enthusiasm. Link to: Microsoft pays star writers to recite slogan
I do not share Nick Denton's "disappointment" with FM's star writers. I'm gob-smackingly shocked that these top journalists went along with this lousy idea for the advertising campaign.
It is a bad, bad idea and they should know better. The more explanations they write the more it shows up the fact that there is something here that doesn't feel quite right.
Is Federated Media acting in its own the best interests over that that of its network of top publishers? Would it risk the long-term good standing of its publishers in order to meet very ambitious revenue targets?
Earlier this year Mr Battelle was touting the success of Federated Media and said revenues would hit about $50m by the end of this year--a 5-fold increase from about $5m last year. Yet when I looked at the ad network's top sites, many were carrying "house ads" promoting the network. This was amidst reports, some from Valleywag, that Federated Media was looking for a buyer.
I agree with Mr Denton that Federated Media cannot be blamed for "latching on to this idea" but I bet it backfires.
I have a lot respect for Mr Edwards, he is one of the most successful advertising sales people in the country and has worked at prestigious media companies such as CNET Networks.
However, I disagree with him that it is OK to mount such advertising campaigns. There is a very real risk of damaging the brand of its star writers.
Federated Media should be looking out for the best interests of its network at all times. Just because there has been no "outcry" from readers, and that Mr Battelle openly blogged about it, doesn't mean it is OK.
If Mr Edwards believes that there is nothing wrong with the advertising campaign, let's see Federated Media run another similar campaign with the same set of publishers. My prediction is that this is one new media business model that we can safely scratch off the list...
Here are some relevant links from Chas Edwards:
http://battellemedia.com/archives/003543.php and http://battellemedia.com/archives/003764.php
Neil Chase at FM's blog