The “WINTER 1987 volume 1 number 1” issue of the Nintendo Fun Club newsletter sold for $1025 yesterday. (Via BoingBoing.)

Gordon Borrell and Clark G. Gilbert have applied great empirical rigor in examining the way newspapers respond to the Internet. Highlights from their access-restricted report:

“In every instance of disruptive technology studied, the disruption causes a net expansion of the marketplace. So, it seems, will the Internet create net growth of local advertising expenditures.” While cable-TV advertising took 11 years to achieve a 2.5% share of total ad spending, the Internet achieved the same share in 4 years.

But, focused on winning yesterday’s battles online, newspapers turn their backs on the real growers. “Our estimate for 2002 is that the newspaper industry is missing out on $289 million in ad revenue by not offering targeted advertising and other high-growth revenue categories that are achievable on the Internet today. By 2005, those missing categories could represent as much as $880 million…”

Newspapers are wired to defend current franchises rather than greenfield, and millennial-era Internet-pioneering losses reinforced this reflex. Currently, 72% of the typical newspaper’s online revenues come from classifieds, with half this only an upsell from print.

Even in plowing old fields, newspapers often undershoot; in Pressflex‘s experience serving newspaper websites, an astonishing number of papers fail even to promote print subscriptions online, something that can work remarkably well.

Speaking to a group of investment bankers, Dennis FitzSimons, President and Chief Operating Officer of Tribune Company, said, “There is value in Internet advertising, and we’ve invested to get our share. But the reality is this: the hyper-targeted, one-to-one marketing that the Internet can provide is what we originally thought it would be; a great tool for marketers’much like direct mail or telemarketing. It’s a great add-on. But it is no substitute for the brand-building capabilities of local mass media.”

FitzSimons also said Tribune Interactive reached profitability in the second quarter (six months ahead of schedule) based on online classified revenues. Print classified advertising represents 21% of the company’s total revenue. Finally, LATimes.com registers an average of 7,000 users a day, he said.

Congratulations to Bill Quick for selling the first Blogad for $32.

Some folk object to advertising in blogs for ideological reasons, arguing that blogs are meant for a higher, purer calling. Others say bloggers don’t have the requisite audience or commercial acumen.

Phooey.

First, society needs professional blogs. Journalism as we love it is being crushed by the vice grip of price/earnings. Journalism survives under a few old-school publishers, but everywhere else swarms of mediocre local monopolists, bleed-to-lead TV stations and Murdoch duopolies are killing the honorable fourth estate. Autonomous, dedicated, low-overhead bloggers can save
journalism.

Second, logic demands professional blogs. Many print publications — with smaller and less influential readerships than a good blog’s — sell enough advertising to pay 20-person staffs. And every surface from newspapers to matchbooks to taxi doors to movie screens to telephone books to cellphone screens to stadiums has eventually found advertising underwriters. Why not blogs too?

Blogs offer advertisers and sponsors intimate contact with influential, passionate audiences. Blogs disintermediate gutless traditional media and offer greater value for money. Blogs articulate new demographics and new market metrics. (For more context, see my early Blogonomics post.)

The old media economics ‘ he who controls distribution wins the most eyeballs and serves advertisers best ‘ will soon be plowed under by a new economics ‘ she who relates best attracts the most valuable audience.

We hope to help make it happen. Blogads brings to advertising the simplicity, low-cost, power and atomic-level automony that tools like Antville, Blogger, Greymatter, MT, pMachine, and Userland deliver to editorial content.

Blogads work seamlessly in all blogforms. Each blogger can sell ads on her own site, setting her own prices, rhetoric and standards, approving or rejecting submissions. Advertisers can upload images, create mini-sites, invite comments and classify their ads. For readers, Blogads classify ads by affinity and commercial category, reducing search costs and boosting serendipitous contacts.

For buyer, seller and reader, Blogads deliver a new commercial kick in a few clicks.

So bloggers will get rich quick, right? No. Not any time soon. Bill’s sale notwithstanding, the money won’t gush tomorrow or next month or even this year.

It took nearly 200 years to advance from the invention of the movable type printing press to the publication of the first newspaper. Nearly a decade passed after the web was spun before the blogging culture bloomed. And the dream of harnessing advertising to personal publishing has been pursued for many months by people like Matt Haughey, Rusty Foster, Dan Chan, Arnab Nandi, Evan Williams, and Pud.

Technology isn’t the challenge. The tools exist. What does not exist yet is the right words and ideas.

We need to invent a new mentality, carve a new space in the crowded minds of advertisers and consumers, articulate new values.

As with previous new medias, Blogads need new metrics, benchmarks, rhetoric and business logic.

Blogads need people experimenting with advertising content and forms, seducing advertisers, thinking in new directions, discovering weird new businesses that will benefit from the Blogad’s unique simplicity and audience grip.

Blog readers need to see the blog-advertiser not as another PR-geyser, but as an ally, a comrade, somebody who has invested in a mind-set they care about.

I’m not worried. It will happen. Bloggers are the ultimate intellectual entrepreneurs, history’s largest and most powerful class of autonomous scribes. Blog passion, inventiveness and audience-grip guarantee that this medium will detonate a new commercial universe.

Sign on to sell your own Blogads if you have patience. Sign on if you are willing to wait months for paying advertisers and, in the meantime, prime your adstrip with interesting, humorous commerical content — your friend’s gig, your aunt’s e-Bay auction, your son’s scout troop’s spaghetti supper. Put up affiliate links to books you love. Put up free links to charities. Link to great businesses whose ideas you want to boost. Experiment, see what works. Woo advertisers with brilliant tales.

And if you aren’t ready to invent Blogads and prefer to watch, please do click a Blogad and remember that the advertiser supports something you value.

(9/04/02 Matt Welch sold a Blogad on his site before his adstrip was even live. The ad promotes an e-book that costs $3.95 — a great product/price point for Blogads. The advertiser must be a regular reader of Matt’s blog, because he punches reader hot buttons like he’s Casius Clay. Elsewhere, Heath Row notes that since he’s got a fulltime job, his blog will remain a Blogadless labor of love. Still, “Blogads could very well become the tail that wags the blog dog, just like with most media,” he writes.) Rick Bruner thinks hard, declares “By jove, I think it just might work!” and buys an ad. (Look left.) Smart, personality-based marketing for the blogosphere. Thank you Rick!)

The NYTimes profiles Dean Singleton, who runs the “fastest-growing newspaper company of the last two decades,” MediaNews Group. To fund growth, Singleton slashes staffs and once “upheld the firing of a reporter who had failed to file a news story consisting of an advertiser’s news release verbatim, and instead added accurate details that wound up making the advertiser look bad.” Singleton oversees 46 daily newspapers and 81 nondaily newspapers.

OK, there should be a couple more betas live today. For any of you happening on this site by chance, I’ll say that Blogads = classified ads in blogs.

We think bloggers are the ultimate intellectual entrepreneurs. Blogger passion and dedication will inspire a new universe of commercial communication.

To read a lot more about what got us started, visit this blog posting.

Out touring the flood damage, Tamas photographed this sign taped beside a gate that led into a garden full of water.

It says: “just looking 500 HUF, taking a photo 1000 HUF, using vcr 1500 HUF, 10% discount for the elderly.” Prices exclude sales tax. $1 = 250 HUF.

It’s a long weekend in Hungary, where people will be packing sandbags and/or lighting firecrackers for St. Stephen. In the US, my wife and I are travelling get together with a group of old wind-blown friends and drink beer and trade photos of our kids. So, if you’ve happened upon us via luck or a string of obscure links, you are early. We’ll be fully open for business next Wednesday. We’ll be back then, full of energy and contrariness and ready to roll out our next wave of betas.

Ok, beta Blogads are live on two sites: Techblog and Scifan. Many thanks to Ben Sullivan and Olivier Travers for taking the plunge with us. We’ve done beta testing with adstrips offline; these two niche sites are running the first fully public Blogads. In the next few days, once we’ve stomped out whatever glitches arise, we’ll roll out with a second group of betas with sites inside the blogging feedback whirlpool.

As software developers know, no amount of offline testing can compare with the raw fun of live usage. What features will people use, what will they ignore? Will you get one user the first week, or ten, or 100?

The additional challenge for companies aspiring to serve the blogging community en masse is how to launch a service and tweak it out of the limelight. Because the blogs are so interlinked and quick to assimilate new information, there is no Philadelphia audience to fine-tune your show on before opening on Broadway.

As Ben wrote us after posting his adstrip, “In the immortal words of Socrates, ‘I drank what?'” Our sentiments exactly.

Here are I made between September 2001 to May 2002.

Some of the highlights are [url=http://www.pressflex.com/news/fullstory.php/aid/54/Blogonomics:_making_a_living_from_blogging.html]Blogonomics: making a living from blogging, From Socrates to Instapundit, Talk is cheap and so is blogging, andLatest tally: Drudge thrashes news competitors.

Here’s my first blog post, made on the innocent evening of September 5, 2001: Blog 1: Servers need soul too.

There’s another batch of posts from 2002 offline from my personal blog, blogism.com, that still need to be restored to the web.