For the past couple of months Blog Herald has been subtly attacking me. I thought it was just one of those suckups trying to bait me to link to them but today I saw the real reason for Duncan’s tone: he thinks I don’t want him or anyone else to make money off of content (that link takes you to his post titled: Steve Rubel doesn’t get it: RSS advertising sucks).

He’s wrong about my views, but he’s not the only one (I was forwarded some email from a private mailing list where some of the participants skewered me in the same way that Blog Herald just did but in a more personal way — all because I want full-text feeds).

Ahh, I see Kent Newsome sees through Duncan’s post.

So, let’s get to it: what are my views?

1) That I won’t subscribe to any feed that isn’t full text. Well, except for my brother’s blog.
2) That treating RSS readers well will get you more Web browser readers.
3) That full-text sites will be more profitable because of this than partial-text sites.

So, let’s look at the world of RSS. First, you MUST separate the world into two buckets:

1) The way they are today.
2) The way we want them to be tomorrow.

Personally I want a world where everyone uses a feed reader and subscribes to their favorite blogs, news sites, etc. But let’s be honest. Such a world is a LONG way from being here. We could go into the reasons, but that’s for another post at another time. Let’s not rathole on this.

Instead, let’s look at how things are TODAY. Today only a very small percentage of people use RSS and RSS News Aggregators. Even if you include the people who don’t have any clue that they are using RSS (like those people who use live.com or MyYahoo to subscribe).

The reason RSS advertising doesn’t work today is:

1) The audiences are too small.
2) The audiences are too geeky and too full of smart people. Hint, those people don’t click on advertisements unless they are very targetted!

Now when I talk with audiences I see two trends: 1) Blog-heavy audiences, like the Northern Voice conference, have about 80% usage of RSS News Aggregators (these audiences do NOT represent the mainstream user). 2) Blog-lite audiences, like Ireland’s IT@Cork conference, only see about 2% RSS usage (these are far more mainstream — in fact, I’d argue that the mainstream user is far less likely to use RSS than that. Heck, if you really want to get mainstream, only about 1/6th of the world’s population even uses a computer).

But, now, how do you get traffic to visit your content? Well, I’ve been studying that too. There are a few ways:

1) Get your content listed on a news site with a lot of flow. Something like Yahoo or Google or MSN’s news page. Not many of us have access to that. With one exception that I’ll note below.
2) Get a journalist with a lot of flow to link to you. When the New York Times links to you you’ll get lots of flow.
3) Get lots of bloggers to link to you. I do get lots of flow when lots of bloggers link to me.
4) Get the memetrackers like Digg, Memeorandum, TailRank, Slashdot etc to link to you.

Yeah, there are probably others, but in terms of buckets of how you get traffic, these are the major ones.

OK, you might be reading my words in an RSS aggregator, right? What happens when you click on a link? It takes you to a Web browser, right?

Ahhh! That’s how you can make money!

Aside, there are at least three ways content owners today make money off of advertising:

1) Show a banner ad when you visit the page (the content owner gets paid everytime you visit that page. For instance, I just went to cnn.com and there’s a banner ad there and they probably got a few cents from my visit.
2) Click-to-pay advertising. You see all those Google ads all over the place? Chris Pirillo’s blog, for instance, has Google ads (so does Blog Herald). These sites only get paid if you actually click on the advertising. For instance, some of the words you click on can be worth up to $60 PER CLICK to Google and other advertising companies (like Mortgages).
3) Interruptive advertising. News.com uses a lot of these kinds of ads. They are Flash movies that fly over the page, or pop up, or run across the page until you click their close or “skip” buttons. These are also paid by impression, or everytime you load the browser up.

Anyway, back to traffic. To get it, first you should appease the connectors. Er, the bloggers, the journalists, and the geeks.

You see, when I get together with journalists their RSS usage is WAY WAY WAY higher than the rest of the population. Journalists are like me. They sift through lots of information looking for the gems for their readers. That’s how they build audiences. RSS lets people read about 10 times the amount of content than if you just use a Web browser. That’s why journalists, connectors, bloggers, geeks who care about productivity, etc use RSS. It’s also why advertising in RSS isn’t yet working. These people aren’t good targets for loosely-targetted advertising.

Here’s a question: if you were an advertising company, what advertisement would you put into this post? One for diapers? Digital cameras? RSS aggregators?

Most of the algorithms for advertising would just look at the words I typed. So, now you’ll get ads for all the above. Loosely-targetted. This isn’t like going to a search engine and actively searching for, say, digital camera info, and getting a Nikon advertisement. Geeks, connectors, journalists LIKE that kind of advertising. But we don’t like interruptive styles of advertising. Which is what we get in RSS feeds today.

So, how does anyone make any money?

Well, let’s stay in TODAY’S world. In today’s world you get journalists, geeks, bloggers, connectors, to read your content and link to it. That’ll bring a larger audience to visit your Web page. How do you do that? Serve out full-text RSS. Why? Cause by doing that you treat the connector with the most possible respect and give him/her the easiest way to consume your content and link to it.

Then you put advertising on your page. That could be a banner ad. That could be a Google AdSense block (or Yahoo or MSN’s equivilent). Or you could even be really rude and put a Flash ad interstitial (I’ve seen more and more of this kind of “interruptive” advertising). Or, you could get really creative like Honda did and create advertising people will link to as content itself.

Since only a small percentage of your audience will be using RSS (even if you’re a tech blogger, less than half of your audience will be using RSS on the average day) you’ll make money.

Now, the fear is that the model will go away tomorrow thanks to RSS being built into IE 7, Safari, Firefox, Opera and other browsers. Whoa! Alert, alert, if that happens that means the unwashed masses won’t be seeing your interstitial Flash advertisements anymore, or refreshing your banner ads, or seeing your Google AdSense blocks.

OK, in such a world advertising will have to change. But, let’s be honest, what percentage of people will use RSS in such a world? I’d argue that it’ll be a small percentage for a very long time. My mom just doesn’t read enough sites to care about RSS. I doubt she will until she gets into blogging (which is possible, but I don’t expect it anytime soon).

Plus, what makes the usage model of reading a Web page in an aggregator so different from reading it in a browser window? Why couldn’t Google put the same AdSense block into RSS that it puts next to Chris Pirillo’s content, for instance? Oh, wait, Google is already doing that.

But, that’s also ratholing in an argument that really deserves its own post.

What people who say that full-text RSS hurts their advertising possibilities don’t get is that if you treat connectors, bloggers, journalists better, you’ll get MORE audience to your Web pages, which will get you more advertising hits.

Or am I missing something here? Either way, you can call me all the names you want, but I won’t subscribe to partial text feeds. Yes, I’m more likely to link to Web pages that also serve full-text feeds out. But don’t mistake my demand that my content providers treat me better with some theory that I don’t want them to make money. That simply isn’t true and represents the worst of “stick-your-head-in-the-sand” kind of anti-change thinking. If you want to make money in this new world you are far more likely to do so by working with your best customers to find new ways to build audiences and serve better advertising toward them.

The one exception above? The folks who run Yahoo, MSN, and Microsoft’s main pages are heavy users of RSS. Why? Cause they are paid to find the best content. If they aren’t using RSS aggregators today I’d argue they should be fired. Why? Cause they aren’t being as productive as someone else (I can prove that an editor who reads content in an RSS aggregator is far more productive than someone who only uses a Web browser).

But, what do you think? Are content providers going to gain anything to tell connectors, journalists, bloggers to screw off?

PS: Dave Winer has an interesting post this morning on why formats like RSS 2.0 work.