Last week, Google completed its acquisition of RSS service provider FeedBurner, a major addition to the Google stable. We first advised our readers about RSS feeds and FeedBurner more than one year ago. that column follows as this week's Classic Jack.
Publishers & Marketers Embrace RSS as New Ad Medium
Audiences Are Being Disaggregated as Multi-Point Distribution Spreads
"RSS is a new medium that consumers are embracing and there is a great opportunity for marketing messages to be attached to them," claims Dick Costolo, CEO of three-year old FeedBurner,
which provides distribution tools and support for publishers and other content providers. "Commercial publishers have embraced RSS feeds wholeheartedly; most web services and many search engines now provide subscriber results; and podcasts and videocasts are entirely feed-based," he explains.
"A lot of online subscribers are consuming content via RSS and it's incumbent on publishers to learn how to deliver ads."
"With the emergence of RSS," says Costolo, "it will be more important for publishers to manage content, how it gets to subscribers, how many people are reading it, and how to monetize it." FeedBurner
essentially acts as a publisher's clearinghouse, providing a set of tools to optimize content for wherever it is being distributed. In mobile devices, for example, banner ads don't work, so feeds targeted to different distribution streams need to be differentiated, he points out. FeedBurner
enables publishers to integrate ads into various RSS feeds and provides an advertising network for incremental ad sales.
RSS allows people to identify subjects and receive content they're interested in without requiring they visit websites. They're available exclusively on an opt-in basis, preventing RSS spam. Programs
that enable users to identify and subscribe to available content include Bloglines, MyYahoo! and Newsgator. A number of additional services, such as Memeorandum.com, are being created to provide personalized aggregation of content in specific categories,
which Costolo describes as a "newspaper customized for you based on your interests."
FeedBurner is delivering an average 11 million subscriptions per day, up from 250,000 subscriptions just one-year ago. Costolo describes a "subscription" as a feed delivered via an RSS reader to an
individual subscriber. RSS, or Real Simple Syndication, is a real simple file format that defines the structure of content, explains Costolo. "It's a way of specifying what content can be distributed elsewhere and enabling anyone to easily get content they're interested in. It's the Internet standard that makes syndicating content simple, instead of having multiple proprietary data formats."
RSS advertising, Costolo adds, "is becoming far more sophisticated. We provide a set of metrics to advertisers and commercial publishers. We offer all the capabilities advertisers want from publishers: we
can optimize ads to make sure they display correctly in RSS readers; we make sure there are frequency caps on ads; we can help drive subscribers to feeds." FeedBurner is compensated through a percentage of advertising revenues generated and through a fee for sophisticated metrics dashboards.
Costolo envisions that RSS, which represents just a small sliver of advertising revenues today, will become a significant growth medium as rich media capabilities become available. "Today, RSS
readers don't provide support for rich media," he points out. "There are not yet capabilities for point roll ads, flash ads, and other rich media types. Over time, as RSS readers provide rich media interfaces and capabilities, RSS will grow quickly as an ad medium."
Month-to-month ad growth, Costolo suggests, is growing at a 20 percent compounded rate. "For some commercial publishers this will be a critical aspect for driving value," he says, pointing to Reuters, USA Today and Newsweek as publishers
that are very focused on understanding their syndication audience and developing required tools and capabilities. "A lot of online subscribers are consuming content via RSS and it's incumbent on publishers to learn how to deliver ads," advises Costolo.
Currently publishers are distributing both partial and full online articles via RSS, explains Costolo. He believes there will be a migration away from partial RSS content intended to drive users to the
publishers' sites and toward full content feeds. "Publishers initially thought of feeds as a mechanism to drive traffic. Now RSS is evolving as more publishers approach feeds as a distinct medium. An important point for publishers is audiences are being disaggregated."
Costolo believes "it won't be about how many people come to site. It's about how many people you can get to view your content wherever they are and however they receive content. It will be a
fascinating transition that some publishers will resist and some will embrace." As an example he points to the recent Saturday Night Live 'snippet' that appeared on Youtube.com until NBC demanded it
be removed. "That snippet was driving new interest in the program and it should have been embraced and eventually monetized by NBC," he argues.
