Blogging for dollars: Church-state line still valid?

When Ted Murphy started PayPerPost (now called Izea) in 2007, he immediately raised hackles by proposing that companies pay bloggers to post items about their businesses.

ReadWriteWeb's Marshall Kirkpatrick described Izea as a "Search Engine Optimization scam that threatens to torpedo the reputation of the already widely questioned blogosphere. It may also be a perfectly fair way for small time bloggers to make a living, depending on who you ask."

"None of us are pure and there are few firm lines established regarding what is and is not acceptable when you're trying to make money blogging (I called a paid review service brilliant just last post) - but disclosure of payment is one of the most basic requirements for paid blogging to be ok. Even with disclosure, PPP is a sketchy operation; the disclosure story at PPP has always been a little murky."

Truth be told, that was among the milder critiques of Murphy's business, which critics attacked for blurring the separation between advertising and original opinion.

So it's been a while since PPP, or Izea, was heard from. More recently, however, it was back in the news when it facilitated a Kmart-sponsored free shopping spree in December for bloggers who wrote about the experience. Here's the transcript of a recent conversation I had with Murphy, who counts a roster of 265,000 bloggers ready for future assignments.

Q: Why did you change your company's name from PayPerPost?
Murphy: When we originally launched, we were just PayPerPost, but now we have a variety of different properties, like SocialSpark and Bloggers Choice, so we wanted more of a corporate umbrella to house our different operations.

When was that?
Murphy: In November 2007

It's a recession out there, obviously. How's the company doing?
Murphy: This down economy has really been a good thing for us. A large number of bloggers are looking to make some additional money and supplement their incomes. Advertisers are looking for alternatives to more expensive media. So, it's a bit of a perfect storm.

What was the genesis of the idea for starting your company?
Murphy: I started an interactive agency prior to Izea in 1999. In 2004, I started doing some blogger outreach programs, things like giving away movie tickets and gift cards. And I quickly realized that while it was great and people would blog about our clients, it was also incredibly resource-intensive and really impossible to scale those efforts. Depending on the client, it was hard to find the right bloggers. The base of bloggers would constantly have to change. Just because we found a blogger who blogged on entertainment, our next client might not be in the entertainment business so we'd have to start from scratch.

I looked at what Google was doing with all those self-service ad tools. and thought it would be great to create a marketplace where all those bloggers and advertisers can find each other.

Describe how this works in practice. Let's say that Charlie Cooper Enterprises makes thumb widgets and they come to you and want to contract with Izea. What happens?
Murphy: You would create an opportunity in one of our marketplaces and you would say, "I'm Charlie Cooper enterprises. We've got this thumb widget and here are its features as well as a link to the Web site. We'd like you to check it out and tell us what you think and then link back to the site." The people who are part of our network would browse through the opportunities and if it would be a good fit for them and their audience, they'd post it on their blog and submit the URL back to us, which we would provide to you.

How do you handle payments?
Murphy: It's an electronic payment to us and then we pay the blogger through PayPal.

Why do you think that the practice of companies compensating bloggers in this way is not any longer considered taboo?
Murphy: I think a lot of it has to do with the frameworks that have been put in place. It's not just us, but the PR folks as well as other governing bodies to make sure that there's a certain level of transparency and disclosure happening with these transactions. And the freedom of voice with the person writing these posts being protected. When people first heard about the concept, they thought it was all about shilling. But when you're shilling, you're trying to kind of hide that relationship. We try to be totally open with readers and give bloggers a sense of protection so that they can say something they don't like about the product and still get paid.

So a blogger can a slam a company and its product?
Murphy: They could do that. Typically, a blogger's not going to slam a product or service. They're typically going to shy away from those if they don't like the product or a service, but it's not going to all be roses...

Every once in awhile, we will get someone who slams a product or service. But more usually, it's a case of being balanced. You have to take the good with the bad.

And what are their marching orders when they receive the assignment?
Murphy: Typically, we just point them in a high-level direction: Here's the Web site, here's what we think is important...share your experience. These mostly are Web sites or existing products that people may have. It works particularly well for Web sites because anybody can do it.

And how are they compensated?
Murphy: You're going to get paid on a per-post basis, depending on how big of a blogger you are or how well known you are. It's a sliding scale. We track the clicks and the advertiser gets to see that information back in real time. When you sign up for SocialSpark, we give you a piece of code to put on the site to give you a rank against other bloggers on network based on their traffic.

Do you require them to note high up on their blog posts that they are essentially hired hands?
Murphy: Every single post has to be disclosed and we give them a disclosure badge. That's a little piece of code they embed in their posts that lets readers know it's a sponsored post.

The argument you hear against the idea of "compensated conversation" is that if marketers pay bloggers to write about their experience with a brand, that sends a buyer beware signal to people reading the blogosphere for insight.
Murphy: I think at the end of day it comes down to the bond between blogger and the reader. Any site that I happen to stumble upon, I don't automatically give that a high level of trust. But the Web sites I go back to on a daily basis, as long as that blogger is being transparent and disclosing those relationships, I feel comfortable that they're telling it like it is. People in our network are compensated on connecting to their audience...so it's very much in the bloggers' interest to be true to the audience and share their experiences.