In the midst of outlining an internet brand ambassador program for one of our clients, I was contacted by Izea, the social media marketing cannon started by Ted Murphy. Izea ran the Kmart blogger campaign that included some big media guns like Seth Godin and Wendy Piersall as well as a small army of other bloggers peppered across the internet.

I was really interested to learn what Izea could do for our clients, and since I followed some of the twitter heat that Seth Godin was getting for his paid participation, I was really curious about how they felt about it, and what they learned from the experience and might do differently. Our sales rep was good. I grilled him pretty hard and he responded gracefully. In other words, he didn’t wince when I started asking about the problems with paid blogging and reputation. Of course, I didn’t really get a straight answer either.

Blogging with ad sponsorship is nothing new to me, nor is blogging for pay. But a crowdsourcing pay-per-post blogging marketplace with customer feedback ratings is a bit of a personal discovery. It’s one of those ideas that makes perfect sense when you see it. The opportunity appeals to the mercenary in every internet content creator, and the product appeals to the “budget-mindedness” in every brand manager. Share of audience is the capital that the bloggers trade on and marketers pay for reach.

Our conversation seemed to stumble around the basic questions of how does one compare a crowd-sourced blog campaign with viral potential to other campaigns that have viral potential. Our sales rep didn’t want to give straight answers because he was working to impress us on the upside of the campaign going viral. But blog campaigns in themselves do not translate into viral campaigns. I know how to make a viral campaign, and I don’t have to pay Izea to do it for me. What matters to me is how many bloggers am I going to engage, and what is their direct audience share.

I’m still waiting for some numbers, but looking around at the Izea site and making a few random assumptions, I think I can place a value on an izea campaign. If I’m paying Izea for bloggers and they’ve got a 40% markup on their part of the campaign, I’m actually pretty fine with that because they can engage immediately and it would take me several weeks to build a blogger network. The service has value. But in apples to apples comparison, what’s it worth? If I engage 150 bloggers with an average audience of 2,500 readers, I’m reaching 375,000 people. If it costs me $4,200 to reach those people ($20 per post, 40% markup) I arrive at a CPM of around $11.20. That puts it on par with some premium internet advertising networks. I could live with that. When I find out what the real cost and reach is, I’ll readjust my numbers. If my assumptions are close or high, we’ll probably be doing business. if my assumptions are way too low (much higher cost, much higher CPM) then I’m pretty sure we can do better on our own.