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.
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.