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Jason: Ok, so welcome everybody to another CalacanisCast Beta. It’s a very special episode. The episode you’ve all been waiting for. If you’re hearing chuckling in the background it’s the Thrilla-in-Manila. It’s the Rumble in the Jungle. It’s the Battle of the Century. The Blog Battle of the Century.


On my program today we have a very special guest, Ted Murphy, the CEO and founder of PayPerPost.com here with us in studio. PayPerPost.com was founded, of course, in June of 2006 and will be a year old shortly and Ted raised $3 million dollars for the company from a series of investors including DFJ, Village Ventures, and one other firm, Inflection. So, welcome to the program Ted!


Ted: I’m happy to be here.


Jason: Great to see ya!


Ted: Are you sure your listenters know what PayPerPost.com is? They’ve heard of it before?


Jason: I think they might have heard of that at this point! But that’s a great place to start off the conversation. You know the question I always ask is or always think about… because we never met. This is the first time we met in person. And I’ve always wanted to hear is how did you come to blogging? When did you first hear about blogging? And what were the first blogs you read and how did you come up with the idea for PayPerPost.com?


Ted: So, prior to PayPerPost.com I had an interactive adverting agency called MindComet and I started MindComet in 1999 and about 2 and a half to three years ago I started seeing all these blogs popping up and people talking about all these blogs and the notoriety of certain bloggers was starting to grow and I was looking at that as really as a marketing mechanism for our clients and trying to understand how can we get exposure for out clients through this new medium that just popped up.


Jason: Right.


Ted: So we originally launched an effort we call BlogStarNetwork and what we did was we invited people to sign up to receive emails from us when advertisers were interested in giving programs. So you would get an email every once in a while from the BlogStar network saying ,”Hey company XYZ has a promotion or gift card” or whatever it may be to check them out. That was great and good but we had a lot of people that would receive these emails and they would be like, ‘why are you sending me thiese emails? And we don’t want to talk about them.”


Jason: Right.


Ted: And if we’re giving them a $50 gift card they would do it for a $100 so it wasn’t very efficient and it was very difficult for us to manage and to make money. So, I recognized that in order for us to do this successfully we needed to do it in a way that the bloggers were selecting what they wanted to write about as opposed to pushing content down their throat and make it more into a marketplace model and that’s where I came up with the idea for PayPerPost.com.


Jason: What was it about blogging that you became so enamored with? What was it that you liked about it?


Ted: I think that the the thing that makes blogging so attractive is it’s much more intimate conversation, it’s the individual voice of the person writing the blog. It was an alternate or alternative media. It was different than almost everything else out there. And so I think that that was very attractive for our clients.


Jason: And what were some of the earlier blogs that you liked or read pre- your clients? I know if I ask you that your blogs…..Prior to PayPerPost.com were there blogs that you liked or particularly read everyday?


Ted: I’m an advertising guy by nature so AdFreak.com, AdRants.com, I read those a lot. I’m also a diehard Mac guy so all the rumor sites and Think secret and all those things were where I spent my blog reading hours.


Jason: And so why do you think blogging became such phenomenon? I mean, obviously, journaling existed previous to this so why do you think blogging sometime around 2004 became such a….caught on and got so much heat in 2004 and 2005 and even into 2006?


Ted: I think the tools became…first of all…connecting to the Internet became a lot easier. Now you have these always on connections and it wasn’t waiting for your dial-up modem and waiting for this content to download or upload was really slow before. And now you’ve got all these great tools that make it easy to do really cool things and connect with your friends so I think that between increase in available bandwidth and increase of free tools out there people wanted to express themselves and now the tools are available for them to do that. It’s very much so with digital cameras and with digital video you just see all this media is exploding because now it’s cheap and it’s easy and everybody can do it. You don’t need to be a rocket scientist anymore so I think that’s one of the reasons why blogging is blowing out.


Jason: So, you launch the company and obviously some folks had a negative reaction to it. I was one of those.


Ted: You did?


Jason: I did. A slightly negative reaction!


Ted: Hahaha!


Jason: No, you launch, right? And obviously, you know, you’re creating a new company and you get the sort of a reaction… and it wasn’t, obviously, just me… there was a large number of people who had a problem with it!


Jason: What was your initial reaction to the very visceral reaction the marketplace had which was like, ’what are you doing? This isn’t what blogging is about?”

What was that day like when you said “Oh my god. People are reacting strongly?”


Ted: You know, I had expected some of that. We knew that what we were doing was going to cause some concern for people. We knew that going in. At the same time it was a little difficult for people to hear---there was just a lot of personal attacks on me and things that were totally out of the blue from people that I had never met before. So that was a little bit rough. I think we went out drinking that night!


Jason: Hahah.


Ted: You know the exciting thing was that the from the very first day the advertisers started coming in and then the bloggers started coming in. So, while we knew that there was going to be part of the market that didn’t agree with what we were doing and that would probably never agree with what we were doing we also knew that there was a huge market out there that did like what we were doing and seeing the value in it.


Jason: So let’s talk about the advertisers who were drawn to it and the bloggers who were drawn to it. Obviously, the sort of “A List” bloggers and the sort of high profile bloggers are not doing it. But there seems to be a good number of people doing it. Who are your bloggers?


Ted: I mean, it’s everything from house moms to college students to people who like to write about tech and gadgets and everything in between. I think that the big difference between the A-List bloggers, although the A-List bloggers doesn’t exist…


Jason: Right. Clearly.


Ted: Is that they don’t have… These bloggers don’t have another way to really make any substantial income from what they are doing so they see this as a great way to get new content and new stories to write about in their blog but also to earn some money while they’re doing it.


Jason: So the premise is that they can make money from AdSense or another Ad networks like the more established bloggers. Let’s not call them A-List but maybe harder working or longer working bloggers… they can’t they take that same route?


Ted: Well, I think that they can take that same route but what we hear back from our bloggers is, “yeah, I made twelve dollars from Google last year and I’m going to make $500 this month from PayPerPost.com.”


Jason: Right.


Ted: So, I think that it becomes an issue of scale and many of these people, I think… One of the things that’s been really interesting for me to watch is we’ve had a bunch of people come into the system that started with one blog. It was nothing really great or nothing really neat they just started to blog and it was just their thing. Now they’re starting to take it really seriously and now we have people that have four or five or six blogs and they split them up and they’re writing on different subjects that are really interesting to them. So, the content and the effort that they’re putting into their blog has increased and just in general the amount of time that they’re spending blogging has increased and I think that overall that’s a good thing. They’re actually, unlike normal blogging when someone is just blogging on their own there’s nobody looking at the content. There’s nobody actually going through and examining it. When you’re part of this PayPerPost.com, there are people that are actually reading your postings. So it kind of forces you to take it to the next level and to spend some time with what you’re doing?

Jason: Who are the advertisers? I mean, I’ve looked in the system and the advertisers seem like a little bit spammy, you know, weight-loss and you know, not very high end folks…who are the advertisers and are they doing it for the review or is it really because they really want to get the link because it seems to me that ReviewMe which came out of the paid links service, Text Link, and you guys are really selling at the end of the day the Google link more than anything else? People don’t really care what’s written. Is that really fair?


Ted: No! Our advertisers absolutely care what’s written! I mean, if they didn’t care about what’s written then we would have a review process.


Jason: Right.


Ted: Because it would then just be, you know, get the link out there and that’s all we care about. So, that would be easier for us to be honest. We wouldn’t have to have reviewers. We wouldn’t have to have all the costs and the headaches. You know, the advertisers right now… we’ve got about 5,000 advertisers.


Jason: 5,000 campaigns or actual like----


Ted: 5,000 advertisers that are actual registered to use the system.


Jason: Wow.


Ted: And I would classify the majority of them right now as the smaller mom-and-pop type organizations that are trying to get exposure. But I think that it’s very similar to anything else on the Internet that’s new. You know, when SEARCH first started out it wasn’t the big brand of advertisers jumping in but you know, but now they’re spending hundreds of thousands if not millions a month on paid search. So you kind of have these advertisers that are the pioneers that are trying things and we’ve had some, you know Maxim, and Sports Illustrated and we had HP and we’ve had just recently a FOX Film promoting one of their new films that came out. They’re slowly starting to come on but its just like anything else that’s new. You’re going to have the early-adopters and then the big brands once they feel a little bit more comfortable.


Jason: Well you look at the feedback that you got and the sort of negative feedback….. what in that feedback have you taken and sort of put into the product to make it better because you did change a number of things about the product since the launch and maybe you could outline what has changed since the first day and how you’ve gone from being sort of agnostic to what people do in the system to maybe actually listening to the market? Because, you do…you should get a little bit of credit I think, even by the people who detest the sort of, very concept of what you are doing for the changes you’ve made. So, what were the mistakes you made in the beginning and the changes? If you could characterize them as mistake – maybe you don’t think they are?


Ted: Yeah, I think the biggest thing is, obviously, the disclosures has been a big issue. And, and for us, everything that we’re doing is kind of we’re doing something and then we’re listening for feedback.


Jason: Right:


Ted: And with disclosure we weren’t comfortable making that decision whether we were gonna require disclosure or how we were going to require disclosure in the system when we first launched because we just didn’t know. I mean, we were doing something completely new. We didn’t know what the feedback would be from the advertisers and the bloggers and then ----


Jason: Is that true, really? I mean, did you really not know that people wouldn’t want disclosure? What I always say in my posts is that people don’t want to be deceived… Do YOU!? And so you say that we didn’t know people wanted to have disclosure. And I mean you’re a user as well as the CEO of the company. Would you want to be marketed to without knowing it?


Ted: Well, I mean I’m a marketer from my background so it all is a question of what is disclosure and what is the medium that you’re talking about? If I watch American Idol and see a giant Coke can sitting there, there’s no disclosure there, there’s no badge that pops up that says that this is a paid advertisement.


Jason: Right.


Ted: The only thing I see is at the end of that show… flying by at a hundred miles an hour is something that says ‘paid promotion by Coke’ and because this is a new medium, we weren’t ready to make any assumptions based on that because looking at product placement in movies, endorsements by celebrities, product placement on the radio, there’s no source-----


Jason: So, you saw blogging less as [rint journalism , you saw it more as TV so covert marketing might be ok?


Ted: I wouldn’t even say that it’s covert.


Jason: Well, non-disclosed. Un-disclosed marketing.


Ted: Yeah. And because that exists in those mediums, I wasn’t ready to make the decision for our marketplace and say that this is what needs to be done.


Jason: So, when you’re reading a blog, then, you don’t mind being covertly marketed to is that what you’re saying? So if you were reading my blog and I was putting stuff in there covertly, or another person’s blog, you wouldn’t have a problem with that?


Ted: Well, I think that you have to take into account what it is that you are reading and what might influence that. For instance, when I read your blog and I read about Netscape and why the new release in the Wall Street Journal got it all wrong, I know from reading your blog that you’ve got something tied into that, right?


Jason: Yup.


Ted: And so I don’t think of that as deceptive.


Jason: Right. Well, it’s very clear that that’s what I do.


Ted: And it’s clear to me as someone who’s read your blog, but to a new user---


Jason: Well what I say when I do those posts is ‘I” and “We” so I am using the words like “this is my product” or “my project”. I would never write about Netscape in a passive way and say like, as if I wasn’t the GM, when I was running it. So if you say ‘when you were running it’ people will know that you were running it.


Jason: My question to you is would you reading the blog want to read a blog post where the person had been paid but you didn’t know that they were paid to do that post? Would you want to read that? Would you want to be marketed to in that way?


Ted: If the content is good. At the end of the day, to me it doesn’t matter.


Jason: Really? Now that is fascinating. So if you were reading a blog and they were talking about a great laptop and they said, ”that’s a great laptop’ and “ I love it” and “it’s the greatest in the world’ but they had been paid a thousand dollars to write that post, you wouldn’t mind not knowing?


Ted: I personally would not mind knowing, No.


Jason: Really? See I think that’s where the disjoint is is that if you asked 100 people, 99 would have a problem with that.


Ted: Yup.


Jason: Being deceived. !


Ted: Well, I don’t think that it’s necessarily deception.


Jason: If the person was paid to write the blog post…


Ted: Now if the person is sitting there and saying I was paid a thousand dollars to write the blog post, everything that’s in this blogpost…


Jason: Oh yea, if they disclose in the first sentence of the blogpost.


Ted: Well… If…if everything that they’re writing in that blog post is legitimate, is true and is heartfelt, whether they were paid a dollar or a thousand dollars---


Jason: Right. You don’t care.


Ted: I don’t care!


Jason: Even if you don’t know?


Ted: Even if I don’t’ know. No.


Jason: Really.


Ted: Now, if that if that person is deceiving me and telling me things that are untrue than I have a problem with that. And I think that is where it comes down to the individual bloggers ethics.


Jason: See those people, I think and this is maybe where you ran into a problem is that you clearly think different than other people who are in the industry and that’s why I ask you these questions and got a, sort of, gotta peel back the onion a little bit so I can get more specific, is 1) I understand how you think, is that most people would really have a problem with whether the person was being honest or not about the review being deceptive about it if they were paid or not. So there’s two separate issues there. Was the person paid or not and was the review truthful or not? So we all agreed that we want them to tell the truth.


Ted: Absolutely.


Jason: But then since we are all in agreement that we want them to tell the truth, people hiding the fact that they were paid to write the review, an overwhelming majority of them would have a problem not knowing that. But you don’t. Why is that?


Ted: I don’t think... hiding and not disclosing are two different things.


Jason: How so?


Ted: If I can go and read someone’s disclosure policy and I can see ok, this person accepts sponsored posts and is being compensated and has this affiliation or that affiliation than I know reading that blog…like when I’m reading your About you, I know where you are coming from. So you don’t need to necessarily to put into every single post, like the post you did about Netscape, you keep on calling for this disclosure at the top of every post but I don’t see anything at the top of that post that says that reiterates that because it’s on your About Me and if I want to read that I can go ahead and read that.


Jason: But it also says in the post when I was running it, I talk about running the thing sort of intrinsic in it so it would be …an example would be me saying, you know , “I was paid to do this post so it’s a little bit different”


Ted: Do you have stock in AOL?


Jason: No.


Ted: You don’t own stock, ok.


Jason: I mean, you could make it about me but I mean, I’m trying to get more to your position about…I mean I created the concept of the disclosure policy. I don’t know if you know that but I wrote the first one on a blog. Did you know that?


Ted: No.


Jason: I was---


Ted: But you don’t have one.


JC: I…Right on the top it says exactly what I do and I actually expanded it a little bit to say that I’m on the board of ThisNExt since you guys were so nice to point out that!


Ted: Hahaha.


Jason: I was not clear enough with that relationship but I created the first one when I went to Sundance and a friend of mine had a film there and I said, ‘A friend of mine has a film here and these two actors who are here.” So I came up with the concept and I’m well aware of it. But the question I was asking you is let’s forget that there’s a disclosure policy. Let’s go back to the same example. We agreed they wrote a good review. Its truthful. Now, we’re looking at were they paid a thousand dollars or not? Let’s say there’s no disclosure policy. So there’s no disclosure policy and there’s no buttons so you don’t know if they’ve been paid or not.


Ted: Right.


Jason: Do you have a problem with it?


Ted: You know, I look at it as it relates to other media and I look at celebrity endorsements. I look at product placement in movies. I look at product placement on radio---


Jason: So your answer is no?


Ted: There’s absolutely nobody that …you know, Howard Stern doesn’t read an endorsement for a product and then say, ”by the way they paid us a thousand dollars for that or fifteen thousand dollars for that.” And I think that it’s a question of how you are looking at the blog. For me----


Jason: So the answer to it is no you don’t have a problem with people not disclosing that they were paid to write the review?


Ted: I have a problem with…I don’t have a problem with people not disclosing inside a post.


Jason: Ok.


Ted: If they don’t want to disclose inside a post but they absolutely have to have some sort of disclosure that if someone wants to find out the background in any relationship just like, you know---


Jason: But when you started you didn’t have any disclosures so you didn’t have a problem with it then?


Ted: And that was probably a mistake on our part, to be honest…


Jason: And that’s what I was trying to get at. Was there a lesson learned? So you learned the lesson that maybe there has to be a disclosure? You want a disclosure organization to do that. Now, when you look at the disclosure, and I think that this is the problem that the LA Times had with it was, you know…you go to a blog post and there’s a disclosure down on the page somewhere the icon is there. I mean, we all know that nobody’s going to click on that, the percentage of people that are going to click on that out of readers is extremely minute. Is that correct or not? I come from a search engine. I wind up at a page. Am I going to go click on a little icon I see down on the side and then read a disclosure policy?


Ted: Well, I mean, using that same policy it’s like why would you have a privacy policy?


JS: Well we’re talking about a disclosure plicy.


Well, I mean but it’s all the same. Does privacy policy in terms of service …you know?


Jason: Ok, but let’s talk about this one first. You know, do you think that people actually click on it and actually read it?


Ted: I think that if people are looking to be informed about the content they are consuming….


Jason: Yup.


Ted: That by…they should definitely go look at that and that would be one of the first things me, as a reader, that’s one of the first things I am looking for.


Jason: Really? So when you go to a blog you assume that the person might be getting paid and go look for a disclosure button?


Ted: Not that necessarily that they are even getting paid.


Jason: But you look for a disclosure button?


Ted: I look for something that tells me about what the content that is on that site.


Jason: But you don’t look for a disclosure button? I mea, nobody looks for a disclosure button but when they go to a blog they assume….what do you think people’s assumption is when they go to a blog? Do you think that they assume that the person’s being honest and forthright or do you think that the person is getting paid to write the blog posts?


Ted; I think that that’s probably up to the reader.


Jason: What do you think that the majority of readers assume?


Ted: I don’t know.


Jason: Haha. See, here’s the thing that some people find hard to believe, Ted. I think some people find it hard believe that you don’t think that there is an assumption when you come to a blog that it is personal and the person is not getting paid.


Ted: I can tell you---


Jason: I mean, the whole beginning of blogging was based upon being personal.


Ted: I can tell you that before I got into any of PayPerPost.com or any or even had an idea of doing that what I was reading I was always skeptical about how are these people getting access to these products? You know? How does that happen? There’s obviously some sort of relationship there yet there’s never any disclosure.


Jason: You mean when people are getting tipped off with inside information?


Ted: Yeah. People are getting tipped off with inside information. People are having access to products before they’re released.


Jason: Yeah. Typically there are review units.


Ted: Yeah. But I can’t get access to that so how does that happen?


Jason: Uhhh….typically like in any magazine, they would get a review unit and they would say in a lot of times when you read the post they would say, ‘we got a tip and this is what the new Iphone’s going to look like’ or “we got our hands on a Iphone from our friends at Apple.’ That’s typically how it goes. I mean, are you saying you’ve never heard of that before?


Ted: Oh no, I’ve definelty heard of that before but I also heard of people getting to keep those products. You know?


Jason: Yup. That’s a problem.


Ted: Coming from marketing and advertising, I know that that goes on, so---


Jason: Do you think the New York Times does that?


Ted: I don’t think…and that’s where I think the difference is right? Is that when you look at or when I look at television and radio, it’s entertainment.


Jason: Ok.


Ted: It’s something that I am reading as a form of entertainment. When I’m reading the New York Times, it’s journalism.


Jason: Right.


Ted: And I think that that’s where a lot of people get these two mediums mixed up. And there’s no doubt that bloggers that are classic journalists but the majority of bloggers that are out there are not people that have gone to journalism school and abide by the ethics of traditional journalism. It’s not happening.


Jason: Yeah.


Ted: So, when I personally read a blog, yeah I do go and look what the other relationships are and what the background is in relation to the blogger.


Jason: But you’re not looking for a disclosure button. Clearly. I mean, nobody does THAT!


Ted: Well, I mean, I personally do because I am looking to see if maybe someone had adopted that.


Jason: Right. See most people think when they look at what you are doing that you’ve made a very weak disclosure policy because you would lose your advertisers if you had true disclosure. And I think that was why the LA Times criticized it and I think that’s why I criticized it and some of other people did is that disclosure feels like it’s not enough and it feels like it’s alot of the majority of people are going to be confused. And what I would encourage you to do when you think about developing your product because you’re obviously an energetic guy.


Ted: Hmmmhmm.


Jason: You’re obviously not going to go anywhere and you obviously very resilient to what people think about you and you don’t seem to care!


Ted: Haha.


Jason: Which is perhaps a great asset for an entrepreneur…not caring what people think about you. But and I’m one to speak on this subject…But when you look at it, if the majority of people are being deceived it’s probably not good enough. So, the disclosure button down the page if you click on it, we all know that most people are not looking for that. Mixing posts that are disclosed and not disclosed and then the second issue is that you could only write if you write something positive. Those are the things that are making people still hate what you’re doing. And you could turn it around so easily. And I’ve encouraged you to do this before. If you did two things…1) and you have improved products so there’s hope for you. And that the evil marketer in you can see the good journalism-----


Ted: Hahaha!


Jason: ….and the ethics sort of journalism because to be totally honest…when you look at it in life, you really don’t want to make the standard by which you live your life and build your company the behavior of bad marketers. I don’t think that you should set that up as a benchmark. I think that you’re a good person and hard working.


Ted: So my question is ok, is Coca-Cola a bad marketer? Is Ford a bad marketer for injecting everything into---


Jason: Product placement in a movie, right?


Ted: Right.


JC Most people have come to expect that and it causes no harm. And that’s whey people don’t have a problem with that. But there are artists who would argue…directors, etc who will not take that under any circumstances because they feel that it would corrupt their art. However, telling somebody you like a product and doing advertorial, getting paid to actually write about the product is slightly different than product placement because of the user expectation. The expectation when you're you writing a blog is that you’re going to be honest and that it’s your own words and you’re being truthful and there’s no hidden agenda.


Ted: Ok, so what about on the radio? When I’ve got---


Jason: Radio. Slightly different as well. Radio----


Ted: When I’ve got a DJ talking about a product and encouraging me to use this product---


Jason: Absolutely. And the expectation on radio is that, you’re right they’re entertainers, and that they’re being paid and they disclose it and they say,”Our Sponsor is..” ”Our Sponsor is..” ”Our Sponsor is..” And it’s very clear when Howard Stern goes into pitch mode. “We’re doing this dial a date brought to you by this person who put up ten thousand dollars.” He’s saying it over and over again. Just like when I say on my podcast, “Sponsored by GoDaddy. It’s sponsored by GoDaddy” There’s no deception whatsoever. And so when you look at what you are doing the deception comes in and that most people, the majority of people don’t know that the persons being paid. That’s why people are so upset with you. That's why most people are so upset with the concept.


Ted: Hmmm.


Jason: And if you changed two things. And you don’t have to take my advice, obviously I’m just one guy. But the two things that would absolutely absolve you from all of these issues and actually make you in some ways quite a hero for turning it around and move you from the bucket of, sort of, deceptive marketer, to actually somebody respected in the marketplace and respected, is 1) when the advertisers come in, don’t force them to, you know, they HAVE TO to write a positive review. Just don’t allow that on the network. Review however you want to. Negative, positive, whatever. And then the second thing, and you can respond in a second….the second thing is 2) make people disclose clearly. This happened in the magazine business. In the magazine and newspaper business, they introduced advertorial, people resonded, they said they didn’t like, intelligent people…there was a whole furvor about it just like you’re experiencing right now, and they came to a standard which you can look up in the Magazine Association of America, and it has advertorial at the top and advertorial at the bottom so nobody is confused. If you did those two things you would have no problem with me, Jarvis, Google, the FTC, everybody, LA Times, all the people who are telling you, ‘Hey Ted, it’s not enough.” Those people would all go away because what you are doing is you’re mixing what the standards are in one medium and another and at the end of the day the key is people are still being deceived and you are the one enabling it. That’s the key!


Ted: Ok. First… on allowing marketers to request positive only.


Jason: Yeah.


Ted: People say whatever they want in the blogosphere. Right? Advertisers can’t control that.


Jason: Yup.


Ted: From an advertisers’s point of view, if I’m going to pay money to someone what I’m trying to do is connect to someone that really likes my product and I’m willing to pay that person to talk about that.


Jason: Right.


Ted: It doesn’t mean that the person who wants to say negative things can’t go out there and do that. If you see an opportunity on PayPerPost.com and you think that the advertiser sucks, go ahead write something negative.


Jason: Right.


Ted: But I shouldn’t have to pay you for that as an advertiser.


Ted: And in terms of disclosure, every mechanism is available in the system to allow advertisers or bloggers to disclose in whatever way they wanted.


Jason: So you give them the option? You leave it up to the user and the advertiser. What most people would say is because you’re the one enabling, you have some culpability and responsibility too. That’s why Google has certain regulations to how they use AdSsense and you’re venture backed so you’re obviously doing this for a financial return. At some point you are going to have to realize that you have to set the standard. You have to! C'Cuz you’re responsible.


Ted: And we have set the standard in terms of requiring disclosure on both sides, but who are we to say how the disclosure should be done?


Jason: Through You're the person enabling it. Actually you are the person to do it. That’s what Google did. You know when you see Google ads on somebody’s site and you see “Ads by Google’, if you take “Ads by Google” off you can’t be a part of AdSsense. So you are the person to do it. That’s what’s expected of you.


Ted: Yet…but this is not, this is not a display ad. This is not the same.a display ad.


Jason: But it’s an ad.


Ted: It’s content. It’s sponsored content.


Jason: Ok. Like an advertisement or like an advertorial, therefore, it should be marked. It’s very simple,Ted, I mean, anybody who looks at this says its very simple. Advertorials in magazines are marked. When you do a commercial on tvTV it’s marked, you know. It’s very clear.


Ted: And if an advertiser or blogger wants to do that, they can absolutely do that. Personally, me, I think that the disclosure policy is good.


Jason: So, what do you recommend? Do you recommend that the people at PayPerPost.com put it in the first sentence to be clear?


Ted: Actually, if you look at my last post, I actually recommend doing a disclosure in a badge.


Jason: A badge?


Ted: I don’t know if you know this or not but we have a disclosure badge in your system.


Jason: Right. That’s a popup ad and you click on it.


Ted: Well, that’s an extra feature. We give awaydid the way of the disclosure badges for free.


Jason: Right.


Ted: So if an advertiser wants to say we want something in there that discloses this---


Jason: Right. But again, the problem with the badge concept is again it’s not clear.


Ted: How is that not clear? If it says sponsored by ACME, how is that any less clear than Google Sponsored results?


Jason: If it’s at the top of the post or on the post I think it’s fine. Are you saying it’s on the post or are you saying it’s on the page somewhere?


Ted: We’re saying it’s on the post.


Jason: On the post. At the top. It's clearly labeled that this is an ad? Wait, wait, wait, this doesn’t match.


Ted: Wait - Why does it have to be at the top of the post?


Jason: Typically because people read from the top down.


Ted: When I read Google Ads it’s at the bottom.


Jason: Right, yeah. It’s not as big as the a post.


Ted: Well, I mean if I’m looking at a skyscraper ad I may not even see “Aads by Google”.


Jason: But it looks like an ad. It’s the format of an ad. I mean, it’s good that you can argue do deftly about it but it’s not really analogous because it is very well established what a skyscraper ad looks like and what a Google AdSense looks like. A blog post looks like content and so it’s sort of like when you put the advertorial in a magazine, they put advertorial at the top and the bottom, it’s the standard. And they do that because they don’t want anybody to be confused and the thing that you have to keep in mind as you gorw grow this company is that it’s your responsibility to make it clear. It’s your responsibility to set the standards. I mean, maybe that’s why people are so aggressively against you. And it’s not, like just one person. I mean, Google has said they’ll ban people for doing this and they’re not going to count their links. And the FTC..what happened? The FTC, they called you? They looked into it?


Ted: No, the FTC never called us. The FTC never looked into us. We never heard anything from the FTC.


Jason: Ahh. But you wrote about it a little bit. They made a statement about it, covert marketing and blogs?.


Ted: We’re trying to be as proactive as possible but the at the end of the day, what we’re doing is trying to figure out what the right thing is. And to be honest, when we talked to our bloggers about disclosing in post, they don’t want to do it! Not all of them want to do it.


Jason: Right. Well, they don’t want to…..I mean, it obvious why an advertiser or the blogger wouldn’t want to do it. It’s going to make it much much less attractive. They’re going to lose money. It’s not going to be as attractive.


Ted: And just like product placement in television---


Jason: It’s deceptive.


Ted: What’s deceptive?


Jason: Not knowing it’s an ad!


Ted: It all depends on how you’re looking at that content? If you’re looking at that content as this is a journalist, this is the New York Times? Absolutely.


Jason: When most people go to blogs they don’t expect ads in the posts. They don’t. You believe they do? You honestly believe that when you're reading a blog people expect that to be an ad?


Ted: If you’re looking at any content on the Internet that’s not from a NY Times or Wall Street Journal or whatever it may be, than yeah I would approach it and says content. What is behind this content? What type of relationships does this person have? What is this affiliate linkke? You know, we’re all talking about PayPerPost.com, right, and this content, but oh my god! There is a multi-billion dollar industry out there with affiliate links and there is no talk of disclosure.... I look at Amazon’s affiliate program and I look at all the affiliate programs and not a single one of those---


Jason: It’s coming. People are talking about it.


Ted: Not a single one of those requires a disclosure but why is PayPerPost.com the whipping boy??


Jason: Let me tell you why? Do you wanna know the answer?


Ted: We’re not selling product! Our bloggers do not get compensated. If you, if they write about that computer they’re getting their ten bucks either way, right?


Jason: The reason is because when people click on the link to a product and somebody get forwarded to a service and somebody makes a little bit of money off it, there’s not the expectation that the whole written piece was paid for. So that’s why you get that. But I think that there shoulde be more disclosure on affiliates as well. I agree.

I never allowed an affiliate on Weblogs, Inc. and people wanted to do it all of the time. Viper Media, all that stuff. I never allowed it so I agree with you.


Ted: In my opinion, that is way worse than what we’re doing. AbsolutelyAbsilutely way worse because you’re compensating----


Jason: But what you’re doing is not good. HaHaHa.


Ted: No! In that scenario the person is getting directly compensated for the content that they write. So they have actually more---


Jason: Do you think you’re building trust in the blogosphere though? I mean, it’s been called corrosive to the blogosphere and I think that people generally feel that if you start introducing covert marketing to the blogosphere it’s gonna make people trust blogs less. I mean, you are basically becoming the payment system for that. So your contribution at the end of the day is going to be to lower trust with in blogs. I mean, is that something that you’re going to be proud of a couple of years form now? If you succeed, will you feel good that you made people trust blogs less?


Ted: No, I don’t think that people are going to trust blogs any less. Again, I think that you-----


Jason: If they find out they were deceptively marketed to you don’t think that they’re going to trust less?


Ted: I don’t think that the bloggers are deceiving people?


Jason: If they’re not saying that they were paid…


Ted: All of our bloggers have to disclose.


Jason: Through a disclosure button somewhere on the page which we agree that nobody is going to see.


Ted: We didn’t agree on that.


Jason: Any rational person would say that if the button on the page that the majority of people are not going to see that.


Ted: So then why do people put any buttons on their page? I mean, that’s the most jackass thing I ever heard! I mean, you’re saying that because----


Jason: No, no. I’m saying that because the majority of people…do you think that the majority of people that go just lick on the disclosure page?


Ted: No, you’re saying the majority of people don’t click through and read it and click on the buttons.


Jason: No! I didn’t say that. Don’t click on the disclosure button. Majority of people will not see a disclosure button. I mean, we can just do the statistics.


Ted: They don’t click on them or they don’t see them?


Jason: They don’t click on them and read the disclosure. And you cant tell what it is by just looking at it.


Ted: Now who’s fault is that though? To me, if I’m not reading something----


Jason: For you it’s just buyer beware.


Ted: It should always be buyer beware! I mean, whether you’re reading about something in a magazine or hearing about something from your friends, I mean you’ve got to always understand what influences that.


Jason: So, you’re ….what do you think of paying people to go promote a product with their friends but not disclosing? Is that something you guys want to get into…sort of the buzz marketing real world stuff?


Ted: No, I mean, and---


Jason: Is that wrong?


Ted: Ummm… again it becomes another issue of how do you disclose in that medium?


Jason: Right. So, we’re friends and the friendship medium and we’re pals and I tell you ,’gosh I love this coffee so much. This Folgers is incredible!” And I did think the Folger’s was delicious you wouldn’t have a problem with me not telling you I was paid.


Ted: If there was a way. PayPerPost.com situation there always is a way for you to figure out.


Jason: Yeah, I mean, you could ask me. I mean, am I being paid by Folger’s right now so you could ask me.


Ted: So, yeah I could ask you.


Jason: So you’d be ok with it?


Ted: Yeah. I got a bunch of friends that are Buzz agents and what I find is that most of those people tell me that they’re buzz agents. So, much in the same way that we require our bloggers to say they’re getting paid, that’s the same thing that those buzz agents do.


Jason: So when you see all the people that sort of, lined up against this, does it impact you in any way? Like, you know…you’re a human being so you must be, like you said before that yeah you went out drinking , I've just got to think that all of this negative, like “hey dude, what you are doing is not cool.’ At a certain point does it sort of like sink into you where you go, ok, maybe I need to do a little self examination. I mean, have you done self examinations where you go,” hey is what I’ve been doing really this bad if everybody’s responding so negatively? Or does it just sort of roll right off you?


Ted: You know, I don’t think anything just rolls right off me. I think that the feedback that we’ve gotten up to this point has been good. It's oOne of the things that got us to requiring to disclosure is we’ve taken the next step forward and made disclosure badges available for people and I don’t think that this is an issue that’s going to be closed today or next year.


Jason: So there’s some flexibility on your part. You might tighten it up a little bit more I’m hearing?


Ted: I mean, yeah. Ultimately, what we need to listen to is our bloggers and our advertisers because people like Jeff Jarvis, who I respect very much, is a journalist. He is not going to do PayPerPost.com ever! It doesn’t matter how’s much money is tied to it. Who wants him to talk about whatever. You know, in post disclosure and what, he’s not our customer.


Jason: Right.


Ted: While I respect what he’s saying, I understand from where he is coming from. His world of journalism. That’s not the customer I’m trying to serve.


Jason: Right.


Ted: So, I’ve got to listen to the people that are in our system that are using PayPerPost.com everyday and listen to what they’re telling me. And... ..there is some influence from the outside but at the end of the day, people that are so skewedscewed on the outside I can’t take all of that into account when we’re making decisions.


Jason: Let’s talk about the reality TV tv show. It’s a first sort of Internet start-up reality tv TV show. What led you to start up that?


Ted: I think that -----


Jason: I’m talking, of course, about RockStartup.com at which that Ted started to chronicle his adventures building PayPerPost.com and you’re looking for a partner for TV.


Ted: Yup. And I think that the reason that we went down that route is I’ve always believed that building a relationship with your customers is really important and getting them to feel like they’re part of the company…that’s one of the reasons that I really like corporate blogs is because I think that they are really kind of free form and they kind of speak your mind and they can get a feel for what the company’s like and you can share pictures and stuff like that. And with RockStartup.com , really what I wanted to do is take that to the next level and provide the written word stuff and the daily chronicle stuff and kind of a sneak peak of you know, here’s what happened last week when everything went to hell.


Jason: Yup. Haha.


Ted: And I think that it makes the company a little bit more real to people and they can feel the connection.


Jason: So is anybody going to pick it up? Is it going to wind up on NBC at anytime soon? Are you going to be the next Donald Trump?


Ted: Ummmm…I don’t know about the next Donald Trump but we’ve got an agent and they’ve been shopping it to a couple of networks and there’ been some decent interest in it so you never know!


Jason: Well, there was that interesting episode where you had the Chicago, the Posty- Patrol and little controversial. You had the woman go do the scavenger hunt and maybe you can tell us a little bit about that.


Ted: Well, we do do a what we call a Posty Patrol, which is like a Publisher’s Clearinghouse thing where we show up except we don’t just actually show up with money they have to do something to earn it. So, we did one in Chicago. He did it with HP and it was actually a great event. It was actually sad for me to see some people pick that up and take a negative spin on it because by all the accounts the person who participated actually absolutely loved it.


Jason: She was a Mom. She had tow kids with her and she went around doing the scavenger huntd and I guess the controversy was the writing on the forehead of…maybe you can explain? How did that come about?


Ted: That was my idea. She basically had a list of things to do and she earned points for each of them and it came down to the wire and she chose to do that one. So, ----


Jason: What, was that? She wrote on her forehead or it was you guys who wrote on her forehead “I HEART HP”.


Ted: Yeah. I HEART HP. Yup.


Jason: And the reaction to that was kind of visceral. People didn’t like it.


Ted: Well, partly because you were comparing it to a bum fight.


Jason: Yeah! Which is exactly what I thought it was. I mean, do you think it was degrading in any way?


Ted: I didn’t think it was degrading in any way. I mean, we were going to do that right along with her so my standpoint of view I don’t have anything wrong.


Jason: No problem tattooing people’s foreheads!


Ted: Well, that a tad strong. Tattooing and sharpy-ieing are is two completely different things!


Jason: So you have no problem with that? It’s totally cool.


Ted: I don’t have a problem with that. You know, and if she would have had a problem with that than she could have chosen to do something else.


Jason: So….no problem with that so if I paid you like a hundred bucks or something you would put CalacanisCast or something on your forehead?


Ted: I don’t know if I might do it for a hundred but maybe for a thousand bucks? You never know.


Jason: Maybe two hundred?


Ted: Hahahaha!


Jason: Maybe two hundred, what do you think, Tyler? I mean, he doesn’t have a problem with it. I think it’s worth two hundred , for a promono?


Ted: Well, I mean if you want to give me a couple of options to what I can do for two hundred bucks I might choose that. You know?


Jason: You said that was your idea and it’s a good one so I think it’s a good one. Maybe , how about, and you can give it to that woman. I’ll give her two hundred bucks and you can give it to that woman. So she gets another two hundred bucks if you put CalacanisCast on your forehead. Would you do it?


Ted: Ummm…no I probably wouldn’t do it for two hundred bucks.


Jason: But you’d give it to that woman who did that thing so it would be great for one of your postiesings.


Ted: Sorry, I’m not going to do that today.


Jason: Three hundred. How about three hundred?


Ted: And you know what, maybe if it was something that I was really excited about?


Jason: Well, you’re excited about PayPerPost.com on CalacanisCast, right? You wrote about it. AlrightYou were pretty psyched.


Ted: Hahaha. I think it was more of a chance to kind of have a two way conversation rather than just getting beaten up on.


Jason: Alright. Tyler, what do you think should I go for four hundred dollars to put CalacanisCast on his forehead? Would it work? Four hundred. You give it to the woman who does Posty Patrol.


Ted: Uhhhhh….I don’t know about that.


Jason: Four hundred for her. I mean, she did all that for you and for HP.


Ted: For a thousand bucks I would put it on my forehead and give it to her.


Jason: Thousand bucks? How about five hundred bucks?


Ted: Come on! Dude your loaded! Are you kidding me?


Jason: Five hundred’s a good number.


Ted: I mean, come on!


Jason: So you write CalacanisCast on your forehead...---


Ted: For a thousand bucks and I’ll and I will give it to Robin.


Jason: What do you think, Tyler? Is it a good use of a thousand?


Tyler: Yeah, I think it is.


Jason: I don’t know. I’ll only have like five hundred bucks on me..


Ted: Hahahaha! He came prepared. Aww…this is a setup!


Jason: Let’s see four, five, I probably have only five hundy.


Ted: Only for the posties.


Jason: You’ll do it for the posties? CalacanisCast on the forehead. I’m good for the five hundred I think. So, I’ve got five hundred right here. Should we just…is five hundred enough?


Ted: It’s got to be a thousand buddy.


Jason: A thousand?


Ted: If I’m doing it for Robin, Robin’s got----


Jason: This could be the best promo we ever have on this show!

I though for sure you were going to say to me that absolutely not, like you know, and you were going to show us some regret for the whole thing but you were totally cool with it.


Ted: I’m totally cool with it. Look, at the end of the day I’m not going to ask anybody to do anything that I wouldn’t do myself. So it’s like, whether, I don’t know if you saw the Posty Patrol eating a pizza and you know, it was me versus him. So, I ended up throwing up! You know that was part-----


Jason: Do we have a marker here? Maybe we can pick a color?

What do we have? Black? Blue? Green? Red? What do you prefer?

What do the posites prefer? We’ve got blue, red, green?


Ted: You got green?


Jason: Let’s do green. CalacanisCast in green. Here’s the font. Look at this, it’s like I’m at PayPerPost.com and this is probably the greatest moment in blogging history!


Ted: See! Doesn’t this feel good?


Jason: This is great. I think I’m a convert! That’s it. I’ve got my promo and my five hundred bucks. Let’s do it!


Ted: So wait.


Jason: I’ll get you the five hundred.


Ted: Hold on. So you just did a PayPerPost.com.


Jason: I just did a PayPerPost.com.


Ted: Seriously.


Jason: I’m an client. I am doing PayPerPost.com so here we go. Put CalacanisCast on the forehead.


Ted: You’ve got to write it! Come on.


Jason: Oh well not me. It’s all our producer. He does this so---


Ted: Alright:


Jason: CalacanisCast, Tyler you do know how to spell my name right?


Tyler: You just got to make it smaller, yeah real smaller.


Jason: See you got my name, and then you got the ‘nis’ and then you put the ‘cast’ underneath. Calacanis Cast!


Tyler: One second. This is an art unto itself.


Jason: C-A… Yeah, exactly. How did you do this with HP?

Calacanis Cast Posty Patrol. You did it! High five.

It was a very successful CalacanisCast.


Ted: Wait, wait. I’ve got something for you! Actually you owe Robin me five hundred.


Jason: Is this on HP?


Ted: No, no , no. I've got a gift. Remember when I did the post about the golden donkey?


Jason: Ok.


Ted: I couldn’t find a donkey last night.


Jason: Oh OK. So I have athe brass horse here! Very nice. And we ‘ve got the CalacanisCast on the forehead. And actually I think that you are a good sport. You’re a funny guy. I think that there is some, and I don’t mean into make this into Luke Skywalker and Darth Vader moment but I think there’s some good in you. I think that you’re a hard working guy, ok? I think you’re a hard working guy and---


Ted: You just came to the dark side, dude.


Jason: I did, I'm in. Take my $500 it and give it to Robin.


Ted: Isn’t that great though?


Jason: It’s awesome. I feel so good about it because I felt like she got short changed and I’ll get a $500 paypal to you immediately and I think that you’re on the road to recovery. You’re cleaning up your act a little bit. I feel like you’re going to do that first sentence post. That first sentence disclosure. I think that this is probably the greatest podcast in the history of podcasts.


Ted: Hahaha.


Jason: Nobody could possibly be disappointed. People should be really excited about this.


Ted: I know.


Jason: And you didn’t disappoint.


Ted: If you're gonna do it you've got to go big. We’re gonna go big.


Jason: You’re gonna go big. You went big, Robin,... you did good! I’ve got my golden donkey and you’ve got a thousand from CalacanisCast and we’re all good. Awesome!


Ted: Alright, buddy.


Jason: Good job.


Ted: Thank you. Hahaha.


Jason: Greatest moment in podcasting history!

I think it’s it’s the greatest moment in podcasting history!


Ted: Hahahaha.

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