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Is A BlogRush Syndication Credit Bubble (and Crash) Coming?

On a number of forums and blogs like i am jack’s “The Three Big Problems With BlogRush“, there’s concern that “syndication credits” (the social currency earned and used to drive traffic) in John Reese’s BlogRush network is outpacing the rate at which they can be used. Is there a bubble building?

A bubble can develop when the supply outpaces the supply. For example, if a banana republic cranks their printing presses and floods the market with money, it causes hyper inflation, that burger which cost $5 before, might cost $100 now (due to the drop in the value of money). It leads to a crash in the economy.

There’ve been a number of bubbles in history, from the Tulip bubble (where people speculated in tulips), a run on semiconductors, real estate, and more recently the dotcoms in 2000. Is BR headed for the same?

For one, I hardly think a widget is going to have the same level of social impact as the dotcoms. So please drop the doomsday scenarios already.

Secondly, let’s look at the mechanics of the system.

You earn a “syndication credit” (which you can trade for a reciprocal link display on someone else’s blog).

Each time a blogrush widget is displayed, it lists 5 other headlines.

So the net effect is that you “earn” one credit and 5 credits are “used” when the other members headlines are displayed.

The net effect is that one new credit is brought into the system and 5 credits are taken out. Net effect: 4 credits are “burned” in the process.

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So what about potential pyramid/ponzi effects of earning credits from 10 generations of your downline?

Again, look at the payout structure, I believe it’s a 1:1 payout for the 1st and maybe the second generation, from then on, it drops to something like 1:8 for the 10th generation. (ie you “earn” 1 credit for 8 credits that your 10th generation downline earns).

I didn’t work out the stats on this, but it would appear sustainable.

Lastly, if you choose to use blogrush, do remember that you are earning page impressions with your credits, it’s NOT clickthrough traffic. If you’ve used adsense or adwords, you’ll know the mechanics at work here. An impression is not the same as a visitor.

EDIT: I was chatting with IM Sweetie Alice Seba about her BR experience. She’s earned 30,594 credits and used about 8,000 resulting in 39 clicks. (about 0.48% CTR rate).

I suggested to Super Affiliate Amit Mehta that if you want to get the most mileage out of an impression-based system like blogrush, my advice would be to spend 5 minutes coming up with the headline.

A flat headline like “How To Get Started in Internet Marketing” will not get as great a response as a benefit-laden one.

Tools are just tools after all. I’ll address this in my Friday Podcast.

11 comments on Is A BlogRush Syndication Credit Bubble (and Crash) Coming?

  1. Alice Seba
    September 21, 2007 at 11:56 am (4756 days ago)

    Interesting thoughts, Andrew. I’m going to wait and see how this pans out. Today was a better click through day than yesterday.

    To be fair, only about 8K of the impressions had been delivered that I earned, so the CTR is a touch better than posted above.

  2. Andrew Wee
    September 21, 2007 at 1:04 pm (4756 days ago)

    Alice, tks for the clarification.

    The entry has been updated.

  3. Link
    September 21, 2007 at 8:12 pm (4756 days ago)

    Thanks for the comment on my site and the link here, Andrew.

    I think your update to this post is a perfect example of what I meant about BlogRush scaling. She’s already earning credits at four times the rate she’s spending them.

    I don’t think BlogRush is malicious or anything. I think it has potential for blogs in categories that haven’t already been washed away by the heavy hitters and their multiple tiers of referrals. As you said, “tools are just tools” but I think it is fair to take a look at how much benefit a tool can bring you. Especially when a lot of people are telling you it brings you “free traffic” and that’s probably not going to be the case.

  4. James
    September 22, 2007 at 9:04 am (4755 days ago)

    So far, I think MyBlogLog is a much better source for traffic.
    Unless it seems to pick up, it’ll be off my blog soon. It is not a problem leaving it there, but why?

  5. Stephan Miller
    September 22, 2007 at 1:56 pm (4755 days ago)

    I have had 480 impressions and noclicks. And I have clicked on headlines and this took me to blogs where no widget was to be found. Some people are gaming the system hard.

  6. Geordie Carswell
    September 22, 2007 at 2:08 pm (4755 days ago)

    It’s all OK though because they’re coming out with new widget colors! I heard Hot Pink increases impressions 10-fold…

  7. Andrew Wee
    September 22, 2007 at 3:28 pm (4755 days ago)

    MyBlogLog is a more established widget and has a large blogger base.

    BlogRush will likely have more internet marketers on it.

    Depending on what your goal is, having huge volumes of traffic isn’t always the end goal.

  8. Andrew Wee
    September 22, 2007 at 3:30 pm (4755 days ago)

    There isn’t any gaming here.

    You can earn syndication credits from a network of blogs, then redirect them to another site, this is fully transparent in the FAQs and videos I’ve read (and I’m not even a user…)

    A smart marketer might build a whole network around the hot terms on technorati and channel all the traffic toward one blog only…

    There’s nothing ‘black hat’ or gaming about this, it’s merely a feature of the system.

  9. Andrew Wee
    September 22, 2007 at 3:31 pm (4755 days ago)

    Unfortunately, I’m not targeting that demographic at this time, Geordie…

    But sure, colors have an impact on conversions.

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