WE CELEBRATE AND ENCOURAGE INNOVATION.
Innovators push the boundaries of the known world. They're change agents who are relentless in making things happen and bringing ideas to execution.
"Mothers," as Calvin and Hobbes cartoonist Bill Watterson proclaimed, "are the necessity of invention."
Look around online, and there's no doubt it's true: When it comes to innovation in digital commerce and media, moms rule. The current generation of moms is tech-savvy, highly educated and controls a dominant 85 percent of household income. Moms are also the most social demographic--which means that when they see something they like (or dislike), everybody and, well, their mother, hears about it.
Many companies are attempting to tap into this base, but one has found a way to do so that goes beyond traditional advertising. BlogFrog, co-founded in April 2009 by Rustin Banks and Holly Hamann in the startup-friendly city of Boulder, Colo., provides free tools for mom bloggers to power their own online communities, live discussions and video broadcasts, then connects these platforms with brands like Coca-Cola that are willing to pay to be a visible part of those conversations.
"Brands have glommed on because we can get them out of the sidebar and into the main bar," says CEO Banks, referring to online advertisers' age-old struggle to get users to click on banner ads. Such ads are seen as a distraction, since successful ones force customers to click away from their original purpose; social media product placement, meanwhile, can seem pushy, while mass-pitching bloggers for reviews is seen as distasteful. BlogFrog's "conversational marketing" products have disrupted business as usual, allowing advertisers to relate to customers via "brand communities" and "sponsored conversations."
BlogFrog's platform promotes a new type of social network, one that bases connections on what you're interested in, rather than on who you know. BlogFrog has 125,000 active members and 65,000 bloggers with a reach of 10 million parents per month, making it the largest mom-blogger network in the country. Tight communities have formed on the platform around topics such as food and fashion, as well as more serious issues related to military spouses, infertility and special-needs kids. Some of these communities are even transcending the virtual world--in internet speak, BlogFrog members are meeting F2F (face-to-face) and ending up friends IRL (in real life).
"Moms are the most powerful consumer segment, and also the most underserved and misunderstood," says Hamann, who serves as vice president of marketing. "Before us, nobody was going there."
Many other services, such as Ning and Go Social, allow users to create niche social networks monetized by ad sales; the idea is that the aggregated blogs have increased power when it comes to traffic and search engine optimization, resulting in higher ad revenue. BlogFrog, however, goes the extra step and offers a way to monetize the content of the blogs themselves, through brand integration.
In a mere 18 months, BlogFrog has signed on major clients such as ABC News, the UN Foundation, Lego, Procter & Gamble and Intuit, as well as Coca-Cola. Annual revenue is on track to reach the multimillions (revenue doubled from the first to the second half of 2011); the staff has quadrupled from just five employees at the end of 2010; and the company is in its third office, a sprawling 9,500-square-foot space that's a far cry from the 600-square-foot room in which it launched. In March, BlogFrog closed on $3.2 million in funding, led by Washington D.C.-based Grotech Ventures.
Here's how it works. The network's brand communities are led by a team of bloggers, or "community leaders," carefully matched by topic interest and level of influence. (BlogFrog collects data based on metrics like quality of posts, blog traffic and Facebook rankings.) Marketers pay a flat monthly fee depending on the number of bloggers, their reach and type of campaign. Sponsored conversations generally involve a larger blogger group that's asked to pose a question and call for reader contributions in the form of personal stories and comments, votes or photos. Responses are aggregated and distributed to the brand's hub pages and to what BlogFrog calls "conversational ad units"--widgets that show campaign results in real time and serve to amplify the conversation and spread it across the web. Sponsored conversations, too, are cost-dependent on influencer reach and type of campaign; say, $20,000 for a four-week campaign with 40 bloggers with a combined readership of 2 million.
For example, organic dairy company Horizon signed on for a campaign around the question, "How do you sneak Omega-3s into your family's diet?" (No surprise: Milk has a bunch.) Thirty bloggers were asked to talk about picky eating and get the community to share kid-friendly recipes. Not one word was company-supplied "advertorial." The campaign resulted in 2.1 million social media impressions on Twitter and Facebook and 3.7 million ad-unit impressions. Horizon has since sponsored three BlogFrog conversations and has signed an annual contract for 2012.
"Consumers want to be connected to relevant brands, yet so much of advertising today is irrelevant. BlogFrog is an attempt to bridge that gap and be genuinely helpful … and 2012 is about scaling and applying our products to categories beyond moms, and working with other kinds of influencers, like YouTube stars," Hamann says.
"Right," Banks agrees. "Elevated, authentic editorial brought to you by a brand is the future."
Banks started working as an engineer at Ball Aerospace in 2005. He'd moved to Boulder with his wife, Tara, and their 18-month-old, and they didn't know a soul. Stuck at home and stir-crazy, Tara began blogging and soon amassed a decent-size audience. Banks noticed that even though readers left plenty of encouraging comments, they couldn't communicate with one another directly. A simple fix occurred to him: a widget that would allow his wife to form her own online community.
Banks had coded his first Bulletin Board System (think an old-school online chat room and forum) and hosted it from his parents' closet at the age of 12, so after a few nights and weekends studying HTML, he managed to code a prototype and put it on his wife's blog. Fellow bloggers snatched up the technology like a new Baby Einstein product, and Banks realized he had a business opportunity on his hands.
Boulder's close-knit startup community steered him to Hamann, who 18 years earlier had packed up everything she owned in Maryland and driven west. She found herself in a startup utopia, where you could "have a good idea one day and be doing something about it the next."
When Banks approached her, Hamann (who has a 16-year-old) had already built teams and executed marketing for six startups, several with successful exits. Banks' idea to use technology to connect moms sounded like "nirvana" to her, and after several months of discussion, Hamann quit her job as vice president of marketing at a now-defunct music-event invitation service to work on the business plan full-time. A month later, in May 2009, Banks did the same.
"It was fun," Banks recalls, describing lengthy coffee-shop meetings and huddling on the front steps of the downtown branch of the library, leeching Wi-Fi. They hustled, attending mom-blogger conferences and talking to every brand agency they knew. By February 2010, they'd raised about $300,000--enough to hire a couple of staffers and secure proof of concept and a small office for their company, whose name riffed off the concept of "blog hopping."
As traction grew, BlogFrog got the attention of David Cohen, founder of the TechStars incubator, who led a second funding round of $600,000 in early 2011. At that point the team, which had been focused on the blogger community tools and brand communities, launched its first sponsored conversations.
Caitie Ramsburg, director of client services, says BlogFrog's strength is in its level of customization. "We dig deep for what brands want to get out of the campaign. We tie that into what women are already talking about and come up with an elevated topic or question," she says, noting that on average, the brainstorming sessions last a couple of days.
Then, with the help of a sophisticated algorithm that scores influence levels in a way that allows bloggers at all levels a shot at being picked, the team recruits the group that is most aligned with campaign goals. "A brand might want a health blogger in a particular income group with kids under the age of 10," Hamann says. "We have that information because we look at who they are and who they're connected to on several levels."
The advertising world is still feeling out social media's place in its future. "In advertising, you clinch the customer by being emotive," says veteran account manager Elaine Marino, and traditionally that has been done through TV and video. Now, she says, "we're going after the blog space."
Many agencies, eager to tap into the power of these social media influencers, have gotten behind the BlogFrog concept. "It's a better way for brands to approach marketing, because they make sure bloggers actually want to work with you," says James Clark, founder of Boulder-based boutique marketing agency Room 214, which brought Horizon to BlogFrog and has recommended similar campaigns for several other clients. Clark believes the conversational marketing method inspires more activity and loyalty than merely sending samples to random bloggers and hoping for a plug.
The process is also said to yield more honest feedback. Community members are more willing to respond and participate in discussions that are led by their peers, and the conversations give brands a chance to listen in, participate and attempt to boost their own likeability and perception as helpful. Horizon, for example, brought in expert nutritionists and food scientists to answer readers' questions. "We let community leaders run with it," Clark says. "We tell them the topics we like and if we're interested in getting opinions about something, but the communities are self-sustaining."
Other blog networks are partnering with BlogFrog, too. Chuck Moran--chief marketing officer of Burst Media, which represents indie websites across many verticals--is using the community-platform technology to syndicate content across his MomIQ parenting channel. "From a branding perspective, nothing is more powerful than having your target audience participating in a conversation, whether or not it's about a specific product," he says. Reader response to the sponsored conversations has been so great that Burst recently rolled out the platform for its Ella channel (targeting females 18 to 35 with relatively high disposable incomes) and plans to do the same for other communities.
BlogFrog's bloggers are also seeing benefits. The most successful blogs, which can have larger audiences than reality TV shows, can earn their domain owners six-figure incomes. In addition to obvious revenue streams like traffic-driven ad revenue, sponsored posts and product endorsements, popular bloggers can earn money from social media consulting gigs, e-book sales and sponsored conversations and communities like those on BlogFrog.
Last year, BlogFrog paid out more than half a million dollars to its bloggers, who are sent monthly checks based on the communities and campaigns they lead, with the most influential and active making upward of $10,000 a year. Some bloggers who join the network see revenue increase an average of 50 percent, according to the company. BlogFrog's user metrics have also determined that bloggers on its platform see average time on their sites increase fivefold and page views per visit go up by 10.
Laurie Turk is behind TipJunkie.com, a blog that aggregates DIY and craft tutorials and gets about 7 million page views per month. She notes that bloggers' income depends on skill set, influence, traffic and contacts, but there's really no limit to how much they can make. "I don't need to use BlogFrog," she says, noting that when Banks first tried to recruit her, she refused until the platform had developed into a product that was relevant to her community. She also admits to being skeptical that the brand relationships would feel authentic. However, she says, "now I use BlogFrog for engagement, because they stay relevant."
What's most important to her is that the company provides mom bloggers the opportunity to wield their power and influence. "They're at the forefront of helping ‘mom blogger' become a profession," Turk notes.
Shannon Shaffer, a former accountant and the voice behind the blog For the Mommas, agrees. As a BlogFrog community leader, she spearheads several brand campaigns per month--representing a small sliver of the income she generates from her site, which has approximately 500,000 unique visitors per month. "I only say yes to campaigns I think readers will enjoy," Shaffer says--like a recent one for Kraft Foods in which she shared easy recipes, some involving the brand's ingredients.
"BlogFrog does a really good job of matching, so it's a good relationship," she says. "It's not like in an ad network where you don't have the opportunity to say no. I'm a foodie, and I love saving money. BlogFrog has done a really good job of introducing brands to our readers without it being invasive. It's genuine information. If the brand is Kraft, it isn't that we're asking readers to buy Kraft products--it's recipes, easy weeknight recipes that we're coming up with and providing resources for. It's real, true content."
The bloggers themselves--and the amount of trust they are able to engender among their readers--are perhaps the biggest determining factor in BlogFrog's model. Although the company's method of increasing the distance between advertising message and consumer should result in greater trust, authenticity isn't guaranteed, notes Prashant Malaviya, associate professor of marketing at Georgetown University's McDonough School of Business. That depends on how transparent the blogger is in divulging her association with a brand, how loyal her readers are, how relevant the discussions are to readers' lives and even the ways in which readers find out about the community--via the brand itself or elsewhere on the internet. Blogs, Malaviya says, can lose influence if they're discovered to have "sold out," and those that discuss "deeper subjects are perceived to be more authentic."
On a crisp winter Friday afternoon, Banks and Hamann are showing off BlogFrog's new Boulder headquarters. A running trail abuts the back of the office building, just east of a hip downtown shopping area where healthy-looking denizens with shiny MacBook Airs are a common sight, even at the nicer restaurants.
Banks and Hamann seem an unlikely pair. Wearing a BlogFrog T-shirt, Banks looks the part of the classic startup guy, with laid-back energy and a genial, two-handed handshake. Hamann is trim, well-spoken and professional in a sharp suit jacket.
The new office has a rooftop perfect for big summer gatherings, and plenty of room for growth. But at the moment, it's mostly empty. The team of 21 sits together (by choice) in a bullpen, and the conference rooms, named after famous frogs like Kermit and Jeremiah, are identified by taped-up sheets of paper. At least one animal-cracker box is being used to hold file folders. The walls are decorated with frog-theme paintings, the efforts of staff and friends from the last holiday party--most notably, a frogified version of Van Gogh's The Starry Night (by Hamann) and a surreal image of a frog peeking out of a blooming flower (courtesy of Banks' wife).
The office's makeshift, ephemeral décor is a fitting metaphor for the company's promising, if still nebulous, trajectory. "The landscape of the competition changes daily, and the demands are great," says vice president of engineering Doug Cotton.
On the consumer side, the platform needs to be scalable and intuitive to use on every device and browser; for enterprises to sign on, there must be proof, metrics-wise, that the system works. One never-ending task is to find ways to make BlogFrog more viral--coming up with more campaigns, more brand products and more tools. The latest, released in January, is Conversation Networks, which lets bloggers pool small niche communities into one larger one. Titus Stone, the company's lead front-end developer, likens it to a moving target.
"We take requests," he says, only half joking. "When the Live Discussion feature was launched, we started writing code and pushing it out while we were on the phone with bloggers asking us if it could do this or that."
While remaining based in Boulder, the BlogFrog team plans to open a New York office this summer to go after East Coast clients. Meanwhile, it is preparing to extend its network beyond moms to include blogs about food, fitness, fashion, entertainment and tech. Up for grabs? A share of the rapidly growing social media advertising space--which Forrester Research expects to rise from $1.59 billion in 2011 to nearly $5 billion in 2016.