BUSINESS 2.0:

Will Marketers' Filthy Lucre Corrupt the Blogosphere?

One startup is offering to pay for posts that mention specific products.

By Todd Wasserman, Business 2.0 Magazine

(Business 2.0 Magazine) -- Brands need buzz. Bloggers need cash. So why not put them together and profit in the process? That's the thinking behind PayPerPost, an Orlando, Fla., startup that wants to be the eBay of word-of-mouth marketing. Bloggers go to PayPerPost's site and hook up with marketers that are willing to pay for everything from brief mentions of their brands in regular blog entries to video spots in which bloggers interact with their products.

As PayPerPost founder and CEO Ted Murphy points out, there is no requirement that the bloggers be positive about the products. "We're not telling people what to write," he says.

Since the site launched in June, the brands that have signed up have been small fry, such as Synotrex joint health supplement and National Lampoon's DVD Club. Payments so far run from a paltry $4 to $35 per entry. (PayPerPost takes a 25 percent cut.) The site's top earner, a Florida housewife, has made a little more than $2,500. But PayPerPost does have plenty of backing from VCs, led by Inflexion Partners in Gainesville, Fla., and garnered a $3 million round of funding in October.

So are there enough cash-hungry bloggers to make PayPerPost profitable, or will the nascent medium put ethics first?

The Experts Sound Off

GORDON PADDISON

EVP for marketing, New Line Cinema

The PayPerPost model creates a distorted endorsement environment at a time when consumer journalism is struggling to establish a legitimate voice online. For marketers, this could create a backlash and spur legitimate bloggers to speak out against brands for polluting the blogosphere with paid media.

JASON CALACANIS

CEO, blog network Weblogs Inc.

If PayPerPost was 100 percent transparent and forced its bloggers to disclose that the post was paid for at the very top of the post, I think it could have moderate success. But this is not about the post at all - it's about a cheap way to buy a text link that helps boost your spot in Google's search rankings.

BRIAN SIEBER

Freelance desktop publisher

Is PayPerPost's method deceptive? Sure, but I think there's a market for such a vehicle, and if done correctly it can be a valuable tool for word-of-mouth marketers. Anyone who relies on a sole blogger's opinion - whether endorsed or not--gets what they paid for. Caveat emptor!

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.