Having failed to get a wireless signal and having some IP zigzags, I’m finally online in Vienna. Dave Weinberger has the fullrundown of participants and photos. (Hint to family: photo of me here.)

To catch up, yesterday I enjoyed hearingDave Weinberger talk about one of blogging’s unique social contributions –“multisubjectity” — its power to bridge/meld objectivity and subjectivity and create a new social reality. Marysia Cywiñska-Milonas‘s coverage of Polish “community” blogging touched the same theme; she believes 100,000 Polish blogs are creating a “third place” beyond home and work, a space where people can share their experiences and commune.

The key part of my presentation was how blogs can help overcome coordination problems, ie help groups of people decide to do the same thing. We face a coordination problem vis a vis evening festivities — the leafy park across from our hotel is having a beer blast. Seems like a great place to end up.

Live blogging: biologist and former journalist Jeremy CXXX, who asks that his organization not be named/linked, is going to talk about the the role of blogging in PR. His job is to improve the public’s awarenesss of his institution and its mission. Sounds like a fun horror story. “We make very poor use of our web site…. as a marketing and media tool, it leaves a lot to be desired.” Single image of 75 megs image on the home page!!! No bookmarking, since all in frames. Design in front page, then send to IT people, who would upload once a day. If you found a typo, you had to wait a day to see it corrected. This was a year ago. Monolithic IT department, battled his efforts to blog. They said: “You are going to publish to the web yourself? Can’t be done.” “We hate the IT department, we do everything we can to make their lives irrelevant.” So he created a blog, and was elated.

Describes the horror of posting an article on their “corporate” site. Now has an official public awareness blog: getting news about new boss took three weeks to get posted. Took him ten minutes to get it on his public awareness blog.

“Why was there so mmuch resistance to idea of using a blog? Insecurity and lust for power…. They have captured the servers and the network admin, and they are threatened by the idea of letting people do things. There are, I am sure, honorable exceptions, but I have not met them. Rigidity is in exactly the wrong place.”

The new DG arrives in August, and he may be an ally, since he was pissed that it took three weeks for the site to show his news. (What traffic does the site have?)

Department of civil engineering for Dresden University, from 300 new students at the beginning of the century… down to 60. How to market? Hired Xx. As a journalist, first instict to write articles about the latest results of ongoing research. Blogs have the fresh spirit that I wanted Civil Engineers to have. Launched the Baublog, a tool for quick daily information.

Amid spiraling surpluses of news, opinion and commercial messages, blogs offer unique benefits to advertisers. This presentation examines two possible new advertising metrics ‘ passion and hubness ‘ in which blogs excel other media.

The presentation has four sections:
· Unbridled media proliferation poses a perverse challenge for traditional advertisers: ad space becomes free but ineffective. Blogs, offering unique passion and hubness, may save advertisers.
· Passion: blogs command reader loyalty far greater than that inspired by traditional media and corporate online publishers.
· Hubness: network theory suggests that advertisers should, rather than blanketing entire demographic cohorts, seek out the influential individuals (and these folks are increasingly bloggers) who serve as network hubs.
· Emerging tools will make the metrics of passion and hubness tangible.

1) Infinite ad space short-circuits today’s advertising metrics

The Internet has outstripped traditional media as an information source. No wonder. While the number of print and broadcast players is relatively stable, the Internet’s Big Bang has sparked an ever-expanding universe of information sources. New weblogs, forums and e-mail lists appear every minute. Some like www.command-post.org and www.marketingfix.com , are metamedia, while others, like http://atrios.blogspot.com and www.andrewsullivan.com , mix in original reporting and sharp commentary.

Online advertising opportunities swell apace with these new information resources, and ad prices tumble. Free classified site Craigslist.com now does 200 million page impressions a month in San Francisco alone. Google, which answers in excess of six billion queries a month, allows advertisers to buy ads against specific searches for as little as 5 cents a click. (To put these numbers in perspective, the biggest US newspaper online, the New York Times, does roughly 350 million page impressions a month.)

But, perversely, virtually free and infinite ad space is not necessarily good news for advertisers. As volume increases, the cost of being heard rises even faster. The ad classics ‘ banner, button ‘ have been stretched into 15 shapes and sizes, ranging from the ‘microbar’ (88×33) to the ‘wide skyscraper’ (160X600). But even with this new artillery deployed the basic problem remains: traditional metrics for purchasing advertising like ‘demographics,’ ‘frequency,’ ‘share of voice’ and ‘reach’ are becoming obsolete; so what if you can reach 80% of the males age 20 to 25 ten times a day for free if every competitor and his brother can do the same? In short, traditional advertising strategies for getting and holding the consumer’s attention may become as futile as inflating a zeppelin with a bicycle pump.

New metrics ‘ passion and hubness ‘ could rescue savvy advertisers from the paradox of infinite free advertising.

2) Passion and blogs

Fueled by passionate discourse, blogs are opinion factories. Intuitive for both readers and writers, blogs inspire intimacy, passion and loyalty even across thousands of miles. Advertisers may harness unique reader loyalty by underwriting, sponsoring or advertising on relevant blogs.

Passion is the most straightforward and easily understood blog metric, since it draws on the lingo and pitch of traditional media. After all, what magazine does not claim to be ‘loved’ by its audience?

But ‘l’amour du blog’ is different in scale and quality. An American blogger explained his foray into blogging by saying ‘I got tired of shouting at the television.’ Turn the coin over and we see that many blog readers love blogs because they are tired of listening to a monotony of corporate mumbling.

Because blogs are run by ‘us’ (individuals, entrepreneurs’. people!) and not ‘them’ (owners, bosses, conglomerates), readers relate to them better and invest significantly more time, energy and emotion in reading and responding to blogs. Some anecdotes to suggest the scope of this passion:

· While many traditional daily newspapers receive only a handful of letters every day, Glenn Reynolds, law professor and author of Instapundit.com, receives 300 reader e-mails on an average day. Instapundit traffic now equals 1% of NYTimes.com traffic.
· Megan McArdle’s site, Janegalt.net, gets up to 50 comments per post.
· Blogger Andrew Sullivan attracted $80,000 in donations after a two week fund raising drive. Like Instapundit, he gets 2.5 million page impressions a month.
· A link from community weblog Slashdot.com can send 10,000 readers to a story.

To roughly quantify relative states of media passion, I’ve done a few Google searches and tallied the number of times a particular word or set of words is found in Google’s index. As you can see, blogs have a disproportiate share of passion words.

Google index counts on April 28, 2003
Newspaper Magazine Blog
Total matches 13,400,000 35,400,000 4,930,000
+ Love 2,090,000 2,970,000 811,000
+ Hate 691,000 1,050,000 391,000

Blogs inspire above-average levels of passion, intimacy and loyalty. As the Internet’s vast network of servers and links provide even more data about our reading and writing habits, it seems inevitable that metrics like audience passion will be measured and used by advertisers, and that blogs will benefit from the comparison with traditional media. I’ll talk a little more about measurement at the end of this paper.

Why are blogs so influential and passion inflamed? I’d outline four possible factors:

a) Journalists are over-represented among blog readers; always hungry for new opinion, factoids and spin to report and recycle, the traditional press can ingest an individual blogger’s faint vibration and amplify it into a sonic boom. Obviously, this disproportionate influence will fade as (or if) the general population reads blogs at similar levels.
b) Successful bloggers are self-selected as hyper-communicators, evangelists, controversialists, speed-of-light-empowered worker bees who want to spread the pollen of new ideas across geography and ideology.
c) Because each successful blog fosters a self-conscious community of readers and blogrolled friends, a blog can confer insiderness or hipness to its ‘participants.’ This quality of open clannishness ‘ in which the clan meets publicly and anyone can aspire to join ‘ can be magnetic.
d) Blog communities are echo chambers. A community of bloggers can create the ‘hive mind’ that pursues a story or meme far more doggedly than any traditional news organization. The seventy participants in group blog www.command-post.org, were posting one link a minute at the height of the Iraqi conflict and posting 24/7.

Now, let’s turn to the second possible metric, which is remote from traditional media metrics and difficult to measure, but, also, potentially more powerful: hubness.

3) Hubness and blogs

Network science theorists say the key to dominating any network lies in controlling its ‘hubs’ ‘ the handful of hyper-connected nodes that wire together most other nodes. Appropriating this potent metaphor (or, as Malcolm Gladwell calls it ‘a very literal analogy ‘), some marketers argue that companies should win key opinion makers in their respective sphere of interest and confidently wait for the rest of the population to ‘tip’ and follow that lead. Network theorists would call these people ‘hubs.’ Gladwell calls them ‘connectors, mavens and salesmen.’

I believe that blogs, connecting broad audiences of individuals who are themselves pivotal communicators in their respective online and offline communities, are the hubs of the new information age.

To be sure, some might object that bloggers only influence (or annoy) other bloggers — much as Hungarians, a relatively small circle of people talking their own eccentric language, huddled in a linguistic coffee house that is barred to the outside world. Reinforcing the impression that bloggers are insulated from broader society, ‘the blogs’ have traditionally been understood as a single, self-contained and self-indulgent ‘sphere.’ Google show shows 61,300 uses of the word ‘blogosphere’ but only 442 instances of ‘blogospheres.’

But it is increasingly clear that while most bloggers do love to read other bloggers, each blogger actually belongs to two or more separate blogospheres ‘ weaving a web of links between, for example, the bloggers, warbloggers, biobloggers, Lamaze bloggers, Brazilian bloggers, humor bloggers, Brit bloggers, and PR bloggers. Here’s one measure of this cross-fertilization: while Lesley Eaton’s web portal http://portal.eatonweb.com/ catalogs blogs from 38 different languages (including ‘other’) and 101 categories, the directory’s 11,000+ blogs have each been placed in an average of five different categories.

And non-bloggers do read bloggers, for many of the reasons enumerated in the section on passion. Bloggers are now recognized as opinion-makers in offline society, whether in tipping Trent Lott out of office, discrediting a Microsoft marketing campaign, providing fodder for former Nixon-speech-writer William Safire’s column in the New York Times, or buttressing George Bush’s confidence in flouting elite European opinion on Iraq.

With such credentials of influence, blogs have an obvious appeal even by the standards of today’s simplistic advertising metrics. But I think we can wring even more value from blogs.

What unique value might a blogosphere’s self-conscious and articulate community offer to advertisers? Let’s zoom out a second to the level of theory. Consumers often grapple with what economists call ‘coordination problems,’ situations in which participants need to know what their peers are doing before making their own decisions. For example, I only want to buy a fax machine that I know will be compatible with the fax machine that you are using. For established goods and services like fax machines and VCRs, standards are clear, so this coordination is not problematic. But for new products, the uncertainty can be debilitating and inhibit market growth as buyers wait for a standard to emerge.

We don’t look to our peers just for technology standards. Economist Michael Suk-Young calls all the products and services that rely on network externalities ‘social goods,’ and social goods are more common than you might first think. In fact, many of our purchases are made in the context of what our peers are doing. I will rarely eat in an empty restaurant. While no slave to fashion, my wife won’t buy a dress that her friends might judge to be unstylish. And you may go to see Matrix Reloaded — even knowing it to be deeply flawed — to be sure that you can join the chatter at the pub.

To tip potential buyers out of standardless inertia and consensusless gridlock, companies often rely on what advertising around what Chwe calls ‘common knowledge events.’ These are events where we not only see a message, but see our peers seeing the message (and know that they see us seeing the message and seeing them see the message’.)

The televised yearly United States football championship called the Super Bowl offers one example of this. Because a giant community of Super Bowl watchers at once becomes aware of an advertiser’s new product and becomes aware that the other audience members are aware of the product, the Super Bowl is viewed by some advertisers as ideal venue for creating ‘common knowledge’ and creating a new standard; Chwe argues that advertisers pay a premium to advertise during the Super Bowl because the communal knowledge it generates can give consumers confidence that their peers will use a product and that they too can adopt the standard.

To achieve cost-effective success, marketers like Silicon Valley author Geoffrey Moore argue that companies should concentrate on a group of buyers who are at once finite, conscious of themselves as peers and densely woven ‘ so that a message can achieve a critical mass (and common knowledge) ‘ and sufficiently influential in the broader market that the message can percolate outward.

Target a market that is too diffuse and lacks common-knowledge-ability and the marketer risks trying to ‘boil the ocean;’ pick a niche that is too insular and the message will never survive. ‘The success of an innovation appears to require a trade-off between local reinforcement and global connectivity,’ says physicist turned sociologist Duncan J. Watts. Indeed, Watts argues that only goods which luck onto the magical path through the network that balances these two qualities can tip and go viral.

With all this in mind, blog hubness should be a uniquely effective tool for promoting common knowledge within self-conscious communities of influential opinion makers. An ad served to a group of bloggers — a group of peers who influence each other and who know as a group that they have each seen the same ad ‘ will be far more effective than an ad regurgitated from some database into the giant ocean of anonymous eyeballs. At the least, a viewer will be more likely to click on ad that she knows 10 peers have seen than an ad presented to 1000 random people. At best, a well-placed blog advertisement could set off a chain reaction of references and referrals.

Blogs offer the magic mix of ‘word of mouth’ intimacy and global reach. And blog advertising will cost far less than a 15 second spot on TV during the Super Bowl. Excelling at hubness in an information market which is increasingly bloated and chaotic, relevant blogs should be ideal advertising venues for buzz-seeking, network-dependent companies — software vendors, media producers, fashion peddlers, auctioneers, artists, and other providers of ‘social’ goods. Advertising on the right blog or set of blogs will be like buying an ad during a Super Bowl game played and watched predominantly by the players in your target niche ‘ a unbeatable tool signaling to an influential sphere of trend-setting customers, business partners and competitors that “our company/service/product set the standard in this niche.”

4) Possible measures of passion and hubness

Of course, passion and/or hubness will be little more than empty marketing jargon unless we can find a way to quantify and track the value of blogs to advertisers. Without a thermometer, there is no temperature.

Even six months ago, qualities like passion and hubness would have seemed intractably intangible. But as automated sorting and ranking algorithms for blogs become increasingly common and robust, we have reason for optimism. Measures for passion and hubness are daily being refined and articulated. Early sorting strategies include:

· the Myelin ecosystem measures the number of links pointing into a blog, offers one proxie for hubness.
· the Blogstreet neighborhood maps different communities of interest.
· the Technocrati ‘newcomers’ list identifies ‘rising’ blogs
· Blogshares , a phantom stock market in blogs, allows participants to bet on the future popularity of other blogs, and then adjusts rankings to reflect this demand
· Blogosphere.us, which focuses on the rising and falling popularity of blogs.
· Google, which evaluates a site by how many other sites link to it.

Of these, I think that Blogshares is the most intriguing, since it not only evaluates current link status, but further filters this data against participants’ weighted predictions. So-called ‘opinion markets,’ in which participants stake notional sums on their predictions, have been proven to outperform other forecasting methodologies, so it seems a safe bet that such an approach will help to quantify the potential impact and influence of individual blogs.

Looking forward, if hubness and passion are to become new advertising standards, we’ll need to see further refinements of popularity, market-measuring (either through linking or investing) and community segmentation.

Conclusion:

Even as advertisers struggle to fill the two dimensional media that is steadily inflating with bigger screens, more page impressions, more titles and more audiences, they must also learn to cope with the emergence of a new, third media dimension — the networks of relationships that manufacture our opinions. Thanks to blogs and Google, the apocryphal ‘six degrees of separation’ has shrunk to two degrees (at least among blogs), and one million of us are united in a tightly woven network of text links.

With these global and niche intersubjectivities come a new sensibility. We’ve moved from an age of ‘bcc’ to ‘cc.’ Each audience can now watch itself consume, evaluate and communicate, and our knowledge of each other’s reactions to an event or product will inevitably influence our own reaction.

The ‘old’ media, (even when it is online) trades in volume ‘ how many people, how many minutes, how many pages — agglomerating individual units and selling their attention to advertisers. The new media will trade in the network connections among those individuals.

While marketers have always known that messages are most powerfully passed from person to person, this path was impossible to trace or quantify much less affect. Until the blogospheres emerged, that is. If we can begin to construct ways to measure hubness and passion, bloggers stand a good chance of leading an advertising revolution that matches their publishing revolution. Against the paradox of infinite free advertising, blog hubness and passion should be cultivated and articulated.

Thank you!

Thank you to Ben Sullivan ( www.scienceblog.com ), Greg Beato ( www.soundbitten.com ), Doug Arellanes (www.dougarellanes.com), Heiko Hebig ( www.hebig.com ), Olivier Travers ( http://webvoice.blogspot.com/ ), Stefan Smalla ( www.smalla.net ), and Rick Bruner ( www.executivesummary.com ) for their comments on drafts of this paper.

We had dinner last night Cafe Central, where Frigyes Karinthy wrote a short story in 1929 about “five handshakes that span the globe,” a prevision of the small world concept. Tamas, Csaba, Dora, Miklos and I played the pattern-spotting game “Set.” Tamas grabbed half the sets. We’ve laid out the trajectory for coming weeks, a taste of which should appear Monday. In half an hour, Tamas, Miklos and I will hop on the train to Vienna for Blogtalk.

Mike Butcher wrote yesterday in the Financial Times about Seyed’s Blogshares yesterday. I played Guildenstern and made a brief appearance.

I’m sharpening my trading skills in anticipation of cash prizes.

Greg Beato argues that advocacy groups can get far more bang for their buck and help allies pay bills by advertising on blogs rather than big media. Rather than spending $56,000 for a one day ad in the Washington Post, Sean Penn could have bought a blogad for 58 years on Atrios’ blog.

Great minds think likewise. As you probably have already noticed, ACLU Pennsylvania has bought ads on bunch of blogs in recent days. I think we’ll see lots more such advertising as the elections heat up.

Robert Scobles talks to “sources” and writes: “Google is getting a lot of pressure from its advertisers to ‘devalue’ webloggers and push them down. The fact that when you search for ‘NEC Tablet’ and you find me, for instance, might really piss off NEC. Since NEC advertises on Google, Google has more reason to listen to them than it does to listen to me.” The challenge for Google: why should a Google advertiser pay $1 a click when a blogger can have the top slot (and lots of free clicks) in the regular index? (Via Dave Winer.)

The US has promoted a “strong dollar” for eight years, and the dollar has consistently gained value against other currencies. For the last couple of months, we seemed to have backed away from that position.

Asked what he means by a strong dollar, Sec. of Treasury John Snow said: “You want people to have confidence in your currency. You want them to see the currency as a good medium of exchange. You want the currency to be a good store of value. You want it to be something people are willing to hold. You want it hard to counterfeit, like our new $20 bill. Those are the qualities.”

The Wall Street Journal continues, “More important than what he said was what he didn’t say. Asked whether the U.S. strong-dollar policy still refers to its value against other major currencies, he paused and responded: ‘We’re talking about these qualities that I enumerated.'”

The dollar’s decline has been “fairly modest,” said Snow.

The dollar has dropped 27% over the last year against the Euro and with “support” like Snow’s, will likely continue to slide. For exporters, a weak dollars mean more sales abroad; for US consumers and producers, weaker dollars mean more expensive imports. With the government concerned that the American economy will slip into a depression because people stop spending money in anticipation of cheaper goods next month or year (delation), happy exporters and some import inflation seem attractive.

Some additional notes: a) although the dollar has plunged, it is only back to the level of four years ago, b) weakening the dollar, we may just be exporting recession — Germany, UK, France and Japan will have more trouble exporting and their already tottering economies will be undermined by our move; this could bite us back if they buy fewer goods c) the biggest recessionary force in the US is the overleveraged and aging baby boomer, who will need to save rather than spend for the next ten years to get ready for retirement. $1 = 0.85 euros today.

Wednesday, journalist/blogger David Appel pitched his blog readers to support a story filled with “big politics, big science, and big money.”

David has been investigating a sugar lobbying group’s attempt to get Congress to kill funding for the WHO, which offended the sugar daddies. “Usually, at this point I’d query editors of various magazines and, usually, get assigned an 800 word story or so, paying anywhere from $400 to $1,000 or more.”

Instead, he asked 40 readers to donate $5 each, so he can publish the story on his blog. $200 “is a fraction of what I’d usually get for this type of work, but I want to try it for the idea of it all.” David is “a full-time freelance science journalist living in southern Maine… has appeared in Scientific American, Salon, New Scientist, Nature, Audubon, the Boston Globe, Discover, Psychology Today, and many other publications.”

Thursday, David reported “in just 24 hours, I’ve received $370 in donations from those interested in reading more about sugar, diet, and politics.” Congratulations David.

(Sidenote: I found this story on the site of Christopher Allbritton, who has raised $10,000 from readers to report from Iraq. After posting, I realized this was the type of thing I’d find on Hylton’s amazingly comprehensive blog. I cked. Yep. Hylton had it Wednesday.)

Swiss cow fun.

I promised Tamas I’d pass along my reactions to Matrix Reloaded. I’m saddened by the task now, because I know that Tamas, like me, brings high hopes to the movie. Unfortunately, the second movie is… terrible. The plot is as knotted, pasty and unmemorable as an overcooked plate of spaghetti. The 10-minute-long chases and kungfu sequences are, despite the painfully visible arc of rising hysteria and speed, predictable and boring. They prove that, although $300 million can be spent computer-generating “real” looking visuals, without a good plot and care-worthy characters, you’ve touch the viewer less than would a ride on Disneyland’s Peter Pan ride. It don’t mean a thing, if it ain’t got spirit. The music: bad. Zion: bad. Keano’s befuddlement fit the first movie — he was waking up. Now he’s fully awake, but still sleepwalking as an actor. The only characters who act human are Agent Smith and the French dude… who both are rogue programs. If you feel like sending a message to Hollywood, skip the sequal, rent the first Matrix and enjoy the real thing. Go see it with low expectations, and perhaps you’ll be pleasantly surprised and at least you’ll be able to join disessections of the movie. (That is the perverse thing about power laws, right? Even the bad hub wins if it is big enough.)

One piece of more amusing news today. The first two words in this article in the NYTimes are Rick Bruner, who I’ve known since Budapest. Loquacious and irreverent, Rick started blogging a year ago and was like a kid in the candy store. Rick’s faux pas is old news to bloggers, but now the Times has identified the cultural importance of the experience and spelled it out for print readers.

Wait. Gee, why do I find myself caring that Rick was words one and two in a NYTimes article? I guess this glee is a knee jerk reaction to the days when Newspapers Mattered. If the Times wants to delve into the cultural imporance of blogs, wouldn’t this be a good place to start: bloggers like Glenn Reynolds and Andrew Sullivan each get roughly 1% of the traffic of NYTimes.com, which publishes the collective work of 1000 print and online editorial staffers. Protoblogger Matt Drudge gets 33% of NYTimes.com traffic. When will these revolutionary ratios be examined in the paper?