RSS poses not so simple problems for online ads

Really simple syndication is really sizzling. Forward-thinking marketers are abuzz about the potential of this emerging medium, which allows online articles, blog posts, podcasts and other content to be distributed via news feeds to millions of consumers.

How hot is RSS? An estimated 6 million Americans subscribe to RSS news feeds, with more signing up daily. Its appeal is easy to understand: Subscribers use feeds to read what they want, when they want, on their very own desktops or mobile devices. Subscriptions are strictly voluntary and easy to cancel. Like TiVo, RSS is all about control, baby, and guess who's in charge?

"It's a customer revolution," says Royal Farros, cofounder of the now-defunct MessageCast, which was purchased by Microsoft and used RSS feeds as part of the technology that forms the basis of the MSN Alert service. And the revolution just got a huge boost: Microsoft will make RSS part of its next Windows operating system in 2006. "That's what RSS is, and that's what a lot of people are missing," he says.

What's not being overlooked is the potential power of RSS to deliver relevant and targeted advertising directly to an interested consumer. So it's no surprise that pioneering marketers, large media buying agencies, publishers and established Internet companies are all avidly exploring this new channel.

Some publishers are generating their own news feeds as a way to promote their content and build site traffic. Other companies are using it as a PR tool. Several young marketing firms are gambling on the promise of RSS as a platform for third-party advertising that resembles the text ads made popular by Google. But the potential marketing value of news feeds doesn't stop there; RSS can also be used to distribute information on and links to coupons, special events and entertainment -- think podcasts -- directly to potential customers.

There's just one major problem: Some marketers haven't mastered the basic Web advertising model yet, let alone this emerging offshoot. RSS lacks standard performance metrics, and its audience is small compared with other forms of online advertising such as e-mail. There's no consensus on placement of ads within a feed. And many consumers remain intimidated by the technology. OK, make that a few problems.

Proponents say these disadvantages are temporary. Yes, the volume of users is relatively low, but it's growing rapidly. No, the metrics aren't as well-developed as for, say, e-mail marketing, but they will be eventually. "It's not like the main points of measurement are missing, like how many people click on your ad or how many sales you receive from it," says Cailin Pitcher, senior marketing manager for Citrix Online, which has used text ads in third-party RSS feeds to promote GoToMeeting, its online meeting product.

And unlike some online marketing tactics, "RSS is a no-risk proposition for consumers," notes Pitcher. Subscribers opt in. They aren't asked for personal information such as an e-mail address. There is no spam. And they can turn off any subscription they dislike. "From that perspective, it's just a real clear channel straight to the consumer," she says.

Companies that offer RSS-related marketing say the time is right for their services. The competition for search engine keywords and the limited availability of keyword-based ads on popular websites have left some marketers frustrated. "People have pretty much swamped all the likely places," notes Scott Rafer, CEO of Feedster, an RSS search engine and advertising network. RSS feeds, he says, can offer new inventory to hungry advertisers and new income to worried publishers.

Why the worry? "RSS is stealing impressions," says Bill Flitter, founder and CMO of Pheedo, an RSS and blog marketing company. Many publishers hope that feeds will drive traffic to their sites, and that does happen. But the reverse is also true: For some sites, subscriptions to news feeds are growing while traffic to the actual website declines. RSS advertising offers a way for publishers to monetize their news feeds, and some are already experimenting with it. The New York Times recently inked a contract with Sun Microsystems to run banner ads for Sun's quarterly network computing webcast within the full text of articles whose headlines appear in The NYT's technology and business news feeds.

This is one reason many observers expect RSS ads to boom. As Farros explains, "RSS becomes a universal data trigger for all of this information. And relevant advertising becomes a way to pay for it all."

Diving in

RSS may seem shiny, but it's not that new. Sometimes called rich site summary, this XML format was originally developed by Netscape in the late 1990s to share headlines and other Web content. RSS 2.0 is the most popular syndication format; Atom is a newer format that is also compatible with RSS.

RSS news feeds owe their popularity to the boom in blogs, which commonly use XML files. Blogging helped fuel development of news readers or aggregators (software used to subscribe to RSS feeds). News readers search feeds for newly published items, update themselves with fresh headlines or info, then sit patiently until a user decides to view the results. Readers make it possible to quickly view material from hundreds of websites without surfing for hours -- a real advantage in a time-pressed world.

Because many consumers find RSS readers too complicated, today's users are early adopters, among the most sophisticated technology geeks on the planet. That's not an appropriate audience for every marketer, but it is the perfect crowd for high-tech companies like Citrix Online and Sun Microsystems.

"We're talking to people who we know are interested or should be interested in our message because they're actually requesting technology information through their RSS feed," says Rhodes Klement, Sun's senior director of brand experience and advertising. "We are reaching people who are interested in technologies that we drive, and then we're inviting them to see something that's in a pretty high-tech, forward-thinking format."

Earlier this year, Sun added RSS to a campaign for its network computing (NC) launch event, an important quarterly platform for announcing new products, partnerships and directions. Sun webcasts each event and uses the NC homepage to build community, disseminate white papers and offer special deals. Starcom Worldwide works with Sun to develop and manage the NC campaigns, which include pre-event advertising to spur registration, day-of-event advertising to drive people to the live 90-minute webcast, and post-event advertising to bring people who've missed the live event back to access the archive.

Since Sun had never run an RSS campaign before, Starcom analyzed Feedster's advertising network to find the most appropriate blogs and news feeds for Sun's intended audience. That turned out to include subscribers to Slashdot's RSS feed. But how should the message be crafted?

People who use RSS technology "tend to value breaking news," notes Brandon Starkoff, Starcom's associate director. So RSS creative was delivered in a timely, "news flash" fashion as headline ads that urged readers to "watch now, live event" or "come chat with Sun executives."

The experiment paid off: Feedster ads were the second-highest traffic-driving paid media mechanism of the campaign, which also used banner ads on tech-related sites such as the Jupitermedia online network. The results were "amazing when you figure that this is the first time that we've tried it," says Klement. The RSS ads delivered more than 3 million impressions during the monthlong campaign. One-third of all the people who clicked through to the NC event page came via Feedster. The cost per click? "Roughly a third of what we were paying for other media opportunities," reports Klement, who says the opportunity-to-see cost "was driven well below a penny."

Citrix Online also found a receptive audience for its message through RSS. It worked with Pheedo, an RSS and blog marketing company, to run four ad campaigns over the past year promoting its online GoToMeeting service. For each six-week campaign, Citrix Online created a 50-word text ad and a tracking URL. Pheedo selected the news feeds best suited for advertising GoToMeeting, placed the ad and tracking URL in the feeds, and then waited. Citrix Online and Pheedo measured response rates based on the clicks. Pheedo then tweaked placement to improve results by removing ads from underperforming feeds. Citrix Online plans to add more RSS campaigns in the future, and no wonder -- the RSS ads bested some of its banner ads on a cost-per-acquisition (CPA) basis.

The process for RSS campaigns "is similar to a search ad campaign where you can pay for certain terms and you know exactly how much return you're going to get on them," Pitcher says. "It has that level of control and immediate measurement advantage that allows us to decrease the cost-per-acquisition very rapidly."

The total cost of a campaign can vary widely, according to Pheedo's Flitter, who says campaigns can be based on either a flat-rate or cost-per-click model. Cost-per-click pricing for RSS ads may run between 50 cents to several dollars per click. In one campaign for Citrix Online, Pheedo identified the most effective feeds and within 10 days cut the CPA of the total campaign by close to half. That's far speedier than launching and fine-tuning a banner campaign, which might take up to six months.

Getting it right

With companies such as Sun and Citrix Online scoring early success in their RSS efforts, others are diving in. But for a format that calls itself simple, it isn't easy to master.

"It's probably more important than in any medium that we've seen so far to get the user experience right," says Shuman Ghosemajumder, business product manager for Google, which added RSS feeds to its AdSense program in May. "People can display the content in many different ways on their end. If you don't have the user experience right, then users are not going to support it."

Getting that right can be tricky. There are more than 1,000 news aggregators in which feeds can be viewed. There's no single standard for aggregator compatibility and, thus, no single standard for RSS advertising, although most marketers are testing text-only ads. As a result, an ad must be "all about the content of the message because you can't control how it is going to be displayed," says Dick Costolo, CEO of FeedBurner, which manages RSS feeds for publishers.

Along with content, the tone and approach of such ads are also critically important. RSS subscribers "are looking for newsworthy, data-relevant information, and the real strong promotional voice gets a bad reputation in this type of channel," says Pitcher.

That's putting it mildly. Each new development in online advertising has attracted vociferous critics who rail against the encroachment of marketing messages in formerly ad-free environments. RSS advertising is no exception. Eventually protests will evaporate -- but not the ability for users to quickly cancel news feeds that contain ads they find annoying.

Perfect pitch

To be successful with an RSS campaign, marketers must do at least two things right: craft straightforward, pitch-perfect messages, then deliver them to the most appropriate audience.

The ability to identify that audience is the primary appeal of third-party advertising services, which use proprietary techniques to match ads to news feeds and thus to subscribers. RSS ad services typically allow marketers to target ads by subject or by keyword or some combination of the two. Targeting by subject is more useful than combinations of keywords, according to Klement. With keyword combinations, "you get a lot of things that aren't relevant. And the same thing happens when you're trying to associate ads with individual words."

There's also the question of where ads should be placed: after every third headline (in headline feeds) or below every other article (in full-text feeds)? Google and Pheedo have recommendations, but there's no defined answer, and the nature of the discussion worries Farros. RSS-based content is ripe for contextual advertising that complements a news feed, he says. But that demands a more thoughtful approach than simply cramming a bunch of ads into a feed.

"You can't say: Item one, the Dow is up. Item two, enjoy Coca-Cola," says Farros. Abuse RSS advertising, Pitcher warns, and "it will damage the channel for everybody else."

No one claims that RSS is a mainstream marketing channel or an all-occasion online ad vehicle. But it's only a matter of time, says Pitcher, before RSS-based marketing "can be picked up by any type of advertiser and work well and be justified on an ROI basis."

The real question is how long to wait. "This is a big trend in media overall," notes Klement. "People are taking charge of their media experiences. RSS feeds are just one way that people are doing that." And in the face of change, "either you find out how to leverage it and do great things or you resist it -- and eventually it runs you over like a train."

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