By Allan Maurer

CHAPEL HILL, NC—Blogads Founder and CEO Henry Copeland figured he had a “homerun idea,” of offering marketers and advertisers a way to reach the “hyper-engaged” readers of blogs. “We opened in August 2002 and thought people would be banging down the doors,” he says. Instead, the company now serving up ads on the incredibly popular PerezHilton.com, took three weeks to make its first 20 percent commission of $6.

By 2007, however, marketers discovered blogs as a way to hit engaged, targeted, and large audiences.

Blogads offers marketers groups of blogs in Hives (verticals) such as political blogs across the spectrum, parenting blogs, sports blogs, food blogs, and Hollywood blogs, among others. Its biggest hit is PerezHilton.com, a celebrity blog.

“It about the same magnitude of traffic as the New York Times,” says Copeland. “If he promotes an artist, they’ll suddenly have 100,000 followers on their MySpace page.”

Copeland’s original business, formed in 1998 and started in Hungary, provided Web sites for newspapers and magazines.

Copeland is among the many executives, business strategists, entrepreneurs, investors and marketers who will participate in TechJournal South’s Internet Summit Nov. 19 in Chapel Hill (for more information or to register see: http://www.internetsummitevent.com).

“Blogads.com’s parent company, Pressflex LLC, was founded in 1998 and funded with friends and family rounds totaling under $1 million.”

He founded Blogads in 2002, but he had to wait until 2004 for his first “decent year.” In 2004 “We did 100X the growth of 2003, but that doesn’t say 2004 was huge,” he says. It just meant 2003 was not a very good year.

“It seemed to me that bloggers have these influential audiences. Political blogs took off in 2004 and put Howard Dean on the map. They unseated Republican Senate Majority Leader Trent Lott.” (For remarks about SC Sen. Strom Thurmond’s long ago run for President considered racially insensitive).

“They pulled President Bush’s chestnuts out of the fire, deflating the CBS AWOL story.” (It suggested that Bush was AWOL from his National Guard duty at one point and a conservative blogger debunked the story, eventually costing Dan Rather and other CBS News people their jobs).

Still, “It was not until 2007 that the general marketer had a clue that blogs existed other than for teenagers,” Copeland says. “There are still conservative brands that can’t get their hands around the fact that an average person has a voice on blogs.” That’s particularly noticeable if someone says something negative about the brand on a blog where the company advertises.

Now, however, Copeland says, “Most marketers recognize that traditional media is shrinking. All this online content people are churning out is growing faster. The day is coming when traditional journalism by professionals will only be one-one thousandths part of what you can read on a subject.”

Then, there are other factors leading marketers to the Internet, such as its interactive and viral effects.

“The opportunity to sit at home watching TV and turn to someone and say, ‘Hey, check this out’ is very limited. Also, in the old days, you couldn’t sit at your desk in the office and consume four newspapers and watch 3 videos between 8:30 a.m. and 6 p.m. Whether a person consumes half an hour or an hour and half in the office, it’s still a big time chunk.”

He points out that 50 percent of all news consumption is now from online sources. “But online is still only 8 percent of the total ad spend,” he says. “The real threat to traditional media is not that we’ll take their audience, it’s that we’ll take their advertising.”

He expects future marketers to be looking for 50-50 mixes, 50 percent in traditional media, 50 percent online. “You could argue they should spend more online, because it’s trackable,” says Copeland.

Copeland says he is not particularly happy about that. “I enjoy reading the print version of the New York Times and print magazines,” he says.

“But it’s a sad truth.” Just looking at traditional media stocks bears him out. Many are down 50 percent in the last month. “Everyone is getting slammed,” he notes.

“I was talking with a group of journalism student the other day and one said, ‘But we really need traditional media.’ I said, yeah, we need world peace, too, but you don’t always get what you need.”

Blogads has grown by multiples every year, including 2008. The company has 16 employees in Carrboro and 16 in Budapest. He thinks that the low overhead of bloggers and his own company will help them weather any economic downturn.

“We have the benefit of being a low-cost operator. We chose to be here because of the cost of living and cost of doing business. It costs 60 percent less than New York or LA, so I think we’re a lot better off than a lot of our competition.”

Not only that, says Copeland, “this really is a fantastic suburb for the whole coast. You can hop on a plane and be in DC by 9 a.m.. We can hire great staff where people have a better quality of living at lower cost, a great competitive advantage in a down economy.”

On the Web: www.blogads.com

Southeast Venture Conference, February 29 – March 1, 2012 at the Ritz Carlton in Tysons Corner, VA – Where Smart Money Meets Smart People.
www.seventure.org

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