Online content syndication has really exploded over the past few years. The number of RSS feeds (short for “really simple syndication”) jumped from a few hundred thousand at the beginning of 2004 to countless millions today from blogs, traditional media outlets and corporate and government websites.

It’s getting easier for Web users to receive information via RSS -- often without even knowing it -- thanks to the incorporation of RSS reader technology into personalized home pages at places such as Yahoo! and Google and in browsers such as Microsoft’s Internet Explorer.

This growth has caught the attention of some publishers and marketers, who see placing ads in RSS feeds as a way to reach Web users who may consume lots of online content through RSS and, as a result, never see banner or search ads. “This is where your audience is. You have to follow them,” says Adam Broitman, Emerging and Creative Strategy Director, Morpheus Media.

But before marketers run out to buy ad space in RSS feeds, they need to understand the channel’s advantages and limitations. Such as? For starters, it’s still a niche. Its unique user demographics also mean it’s not for every marketer. And while benchmark data and other best practices are hard to come by, insights exist about what works and what doesn’t.

Response Rates to Expect
Benchmarking for feed-ad response rates is still a moving target, say marketers and ad-network operations, since the channel is still relatively new.

Pheedo’s reported averages of 0.45% and 2.76% for inline and standalone ads aren’t far off what marketers in the field are reporting.

Broitman received clickthrough rates between 1% and 2% for his clients’ RSS ad tests, placing the technique on par with banner advertising on a good website. Broitman notes that a marketer gives up the volume that paid search or banner advertising offers, but can potentially make up for that lack with better targeting potential.

User Characteristics
Several studies have attempted to quantify the penetration of RSS feeds among Internet users -- and each has come up with its own take. However, those numbers range from about 5% to 10% of Internet users, meaning RSS use is still relatively low among the online population.

While not a mass audience, RSS subscribers offer a unique profile that’s attractive to some marketers. That profile includes readership factors, such as:

o RSS users tend to consume a great deal of information online. For example, the average subscriber to the Bloglines feed aggregator service tracks more than 20 feeds, and a Nielsen//NetRatings study found that RSS users visited three times as many websites as non-RSS users.

o RSS users spend more minutes per month interacting with online content than typical Web users across the board, according to Nielsen//NetRatings.

o RSS users are more likely than typical Web users to be more comfortable with technology, sign up for new services first and forward links to interesting websites, among other practices.

o The act of subscribing to an RSS feed, such as opting in to an email newsletter, indicates a potentially higher level of interest in that website’s content. “We can do targeted advertising with banner ads and search, but I don’t believe it’s as qualified an audience. Subscribing to an RSS feed is a pretty personal relationship,” says Ben Jacobsen, Director Consumer Marketing, Opera Software, who used RSS feed advertising to support Opera’s latest browser launch.

o Feed subscribers are early adopters. RSS tend to be the kind of savvy consumers that many marketers, especially technology marketers, want to reach -- but can be hard to get at through other types of advertising.

Ad Formats, Messages & Pricing
If you’re considering advertising in an RSS feed, you will have to decide what type of ad you want, what feed to use and pricing.

-> Factor #1. Ad format: text vs graphics

Feed ads can take a number of forms, from a headline-style, text-only ads to something that looks more like a traditional banner ad. Which style is right for individual marketers will depend on the audience, the nature of site producing the feed and the marketer’s brand and message. As with any campaign, you’ll need to test different formats to determine which style works best for you.

Text ads appeal to many marketers and publishers because of the text-based nature of feeds and the fact that they’re indexable by search engines. In tests with several clients, Morpheus’s Broitman has seen text-only feed ads outperform graphic banner ads. “Something rings more true with text in the feed reader environment. It feels more endemic and less intrusive than a banner ad.”

Graphics ads that mimic the look of banner ads also work for some marketers, and Brent Hill, VP Advertising, FeedBurner, expects more types of rich media ads to emerge as the feed reader technology continues to evolve.

-> Factor #2. Choosing the right ad message

The basics of advertising apply here. You have to think about the audience and why they’re using the feed -- Looking for specific, how-to information? Browsing for news and trends? Then, try to match the message to that user mentality.

Direct response ads should be relevant to the content and the nature of feeds. For example, rather than a “click here, buy now” type ad, marketers might consider an action that allows feed readers to access valuable information, like downloading a white paper, or entering a ZIP Code to find nearby outlets where they can find a product or service. “Feed readers like information, so give them information,” says Bill Flitter, VP Marketing, Pheedo.

Brand awareness ads can get your company’s name in front of a target audience and help establish you as a early mover in the space among early adopters, but some marketers caution that a generic branding message may not take full advantage of the potential value of a feed’s active audience.

Copywriting tip: Feed users often scan headlines, so text ads should keep the message short and offer a compelling headline of its own.

-> Factor #3. Selecting feeds for ad placement

Despite the huge inventory of feeds, only a small percentage has the kind of subscriber numbers that would attract most marketers. For example, feed management company FeedBurner manages more than 600,000 feeds, but only includes about 4,000 of them in its ad network. Still, those feeds represent 90% of FeedBurner’s total audience.

That smaller pool of feeds nevertheless offers targeting opportunities. “There are so many niche channels, you can’t get a vast segment of that audience, but you can get a specific audience and reach them with a specific message,” says Broitman.

Here are four characteristics marketers should consider when analyzing feeds as potential advertising channels:

o Type of content. You’re looking for blogs or websites that will attract the readers you want to reach, whether it’s a broad appeal like general news or entertainment, or more specific topics like technology and marketing. Within those subjects, you probably can find more granularity, such as feeds dedicated to specific types of technology (servers, specific software products) or marketing tactics (search marketing, B-to-B, etc.)

o Audience size and demographics. Most publishers can tell you the number of feed subscribers they have, but it’s often difficult to dig into those subscriber numbers for detailed user demographic data. Feed advertising networks like FeedBurner and Pheedo can offer aggregated demographic data for their individual feed channels.

o Frequency of posts. How much content is published in an RSS feed can have a big impact on its success as an advertising channel. A feed with many subscribers might not do much for a marketer if the blog or website is updated infrequently, giving few opportunities to place an ad in front of that audience.

To purchase ads, marketers can either work with feed publishers directly or turn to companies such as FeedBurner, Pheedo and Kanoodle that aggregate feeds into advertising networks. Search giants Google and Yahoo! also are testing ad service in RSS feeds.

-> Factor #4. Ad placement, frequency and duration

When deciding where to place your ad within a feed, how many ads might appear and how long to run a campaign, consider three tips:

- Feed ads can either be standalone blocks within a feed or embedded among the feed’s headlines, called an inline ad. Standalone ads tend to get higher clickthrough rates than inline ads, according to marketers. In fact, analysis by Pheedo last year found that standalone ads achieved clickthrough rates six times higher than did inline ads (2.76% CTR vs 0.45% CTR). So why not make all ads standalone? Not all publishers will accept them, and they don’t show up in all types of feed readers, says Flitter.

- The number of ads allowed per feed also depends on the publisher. Each has its own preference, so the number can range anywhere from one ad per feed to a ration such as one ad for every two, five, 10 items.

- Marketers must test the duration of a specific ad campaign with a given feed. How long before get ad fatigue sets in will depend on factors such as the size of the audience and the publisher’s posting frequency, as well as the marketer’s goals.

One marketer trying to generate brand awareness in a specific market may want its ad showing up every time a feed is updated. Another trying to generate a specific action such as an event registration may time its ads to be served on certain dates leading up to the event.

FeedBurner’s Hill says advertisers running an RSS ad campaign of more than a couple weeks often will develop multiple creative pieces with a similar message that can be shifted in and out of the feed.

-> Factor #5. Feed ad pricing

Marketers pay for feed ads on a cost-per-impression (CPM) or cost-per-click (CPC) basis, but in both models, the price will vary according to the feed and target audience.

- CPM model. A consumer advertiser trying to reach a broad audience in an entertainment feed might expect a higher volume of impressions, so the cost could hover in the $2-$10 CPM range.

More targeted feeds to highly specialized audiences can command much higher CPM rates, from $10 to $15 to as much as $30 or $40. “The more granular the audience, the more potentially lucrative the feed, so you pay a premium for that,” says Broitman.

- CPC model. As with the CPM model, CPC rates depend on the feed audience, but range between $0.50 and $1.00 per click.

Four Concerns With RSS
-> Concern #1. Low RSS adoption means a small and fragmented audience. Despite the growth of RSS, it’s still far from a mainstream channel, says Hollis Thomases, President, Web Ad.Vantage.

That’s the reason she thinks none of her clients have asked to add RSS ads to their online marketing mix. “It has to be right kind of audience, the more advanced user. That’s not a lot of the advertising market.”

-> Concern #2. RSS readers display ads differently, and some won’t display graphic ads at all. Subscribers who see feeds through My Yahoo!, for example, one of the most popular feed aggregators, won’t ever see a nice graphic ad you’ve spent time and money perfecting because My Yahoo! only displays feed headlines, not summaries or complete items where graphic feed ads typically appear.

It’s an issue that feed advertising networks are dealing with. Flitter of Pheedo says his company works with each publisher in its ad network to see how the majority of its subscribers are receiving feeds. If a large percentage of subscribers are coming from My Yahoo!, then the company will recommend the publisher only accept text ads.

-> Concern #3. The number of feed subscribers doesn’t equal the number of readers. Marketers can’t be sure how many people will see their ad in a given feed, because some subscribers might not check their feeds for days or weeks at a time. (Although some feed readers offer reporting that lets publishers distinguish between idle subscribers and active users.)

There’s also the issue of subscribers who sign up for the same feed from multiple feed readers, which can overstate the actual number of unique subscribers.

-> Concern #4. Keeping up with fast-changing subject matter in feeds. Ideally, marketers would want to develop relevant and contextual RSS ads that match the content in each feed update. But with the content of feeds changing each day or multiple times a day, it can be tough to create ads that make the most of the timeliness or contextual possibilities offered by the channel.

“Advertisers don’t want to come out with a new ad every day or every minute,” says Chris Tolles, VP Marketing Topix.net, who notes that advertiser interest in buying space in Topix’s 400,000 feeds seems to have stalled.

Feed Advertising Networks and Services
FeedBurner:
http://www.feedburner.com

Google AdSense for Feeds (beta):
https://www.google.com/adsense/support/bin/topic.py?top
c=957

Kanoodle:
http://www.kanoodle.com

Pheedo:
http://www.pheedo.com

Text Link Ads Feedvertising:
http://www.text-link-ads.com/feedvertising/

Q Ads:
http://www.adgenta.com

Yahoo! Publisher Network (beta):
http://publisher.yahoo.com/

Publishers Who Accept Advertising in Their Feeds

The following is a sampling some of the major online publishers who accept advertising in their feeds:

AppleInsider.com
The Christian Science Monitor
Dooce.com
Dr. Dobb's Journal
Economist.com
MarketWatch.com
New Scientist
PC World
PerezHilton.com
Slashdot
TheCarConnection.com
Topix.net
United Business Media
USA Today
The Wall Street Journal Online
Wired


Useful links related to this article

Creative samples from RSS ads:
http://www.marketingsherpa.com/cs/rssads/study.html

A case study on GoToMeeting’s RSS advertising test:
http://www.marketingsherpa.com/article.html?ident=23984