Tensions over sponsored blogging flared into a geek-world smack down at the Always On technology conference in New York this winter.
Jarvis, the technology blogger, was moderating a marketing panel when he chastised PayPerPost. He said he was appalled by a video one Postie made showing her children smashing a camera because it wasn't from Hewlett-Packard Co., a stunt that he said turned the family into "cheap shills." His panelists agreed, calling PayPerPost "corrosive" to the online conversation.
Ted Murphy, PayPerPost's 30-year-old chief executive, was in the audience and objected, saying his marketplace has helped bloggers become more successful.
Cameras caught the clash for "RockStartup," the self-produced reality series that Murphy is pitching to TV networks. The show fashions "the Murphman" and the rest of the PayPerPost team as entrepreneurial "rock stars," even if the clean-cut, fresh-faced Murphy looks more like a Nordstrom pianist.
Sponsored posts provide supplemental cash for bloggers. But Internet marketing firms and their investors say the business is potentially huge for them.
PayPerPost generates hundreds of thousands of dollars a month in revenue from advertisers, Murphy said. It raised $3 million in venture capital last fall and is working on a second round of financing.
Silicon Valley venture investor Tim Draper, a PayPerPost stakeholder and a longtime backer of online marketing companies, said the kerfuffle reminded him of the early days of advertising-sponsored search engines such as GoTo.com, which helped create a multibillion-dollar industry.
"This is a new way of looking at advertising," Draper said.
Draper likened sponsored blogging to product placement in movies: "You put an ad inside the text and it's more of a subtle way of advertising. It doesn't take away from the blogger."
As for the ethical debate, Murphy said the vast majority of bloggers don't consider themselves journalists, so they don't need to follow that profession's practice of keeping clear lines between content and the advertising that supports it.
The FTC noted in December that ties between word-of-mouth marketers and their "sponsored consumers" must be disclosed, and that it would be on the lookout for deception.
Soon afterward, PayPerPost for the first time required bloggers to disclose their sponsored status, although participants were allowed to pick their method of doing so.
