A memo from Neil Chase, one of Battelle's top lieutenants, explains the move as a strategic shift, with FM downplaying regular banner ads and playing up "conversational marketing," a fancy term for the kind of shilling that's common for radio hosts but considered verboten for print journalists.

Famously, Battelle got dozens of top bloggers to recite a Microsoft slogan in one of his "conversational" campaigns; several quit the campaign after Valleywag exposed their participation. More recently, Battelle has signed up less difficult spokespeople; a recent campaign for Intel features so-called "social media marketers" — PR and marketing consultants who are used to promoting the wares of paying clients.

Advertisers pay well to borrow bloggers' credibility. But getting them to purchase advertising on their sites? A far more difficult business. Online ad rates have been dropping fast, a result of ever-expanding supply and recession-softened demand. Federated Media had to discount rates last month, and lost a key customer in Om Malik's GigaOm, a tech blog network. No wonder Battelle wants to get out of the cutthroat online ad-network business, and focus on selling his customers' reputations instead.

Here's the memo:

Dear Authors,
We've been preparing for a tough 2009 by talking extensively with advertisers, agencies and authors about what's changing and how we need to adapt to do well in a tough economy. We've learned a lot, and today we're acting on it.

Sometime in the next hour or so, John will announce on the FM blog what we're telling the staff right now: A small number of employees are leaving FM today. We're sad about losing good people who have made valuable contributions to FM. We honor their service, we wish them well, and we'll do everything we can to help ease their transition.

Today we're changing FM to better support the conversational, customized programs that advertisers tell us they want. They're asking for more innovation, new ways to engage more deeply with your audiences, additional conversational tools and better measurement of results. While we're losing good people who primarily supported basic advertising campaigns, we're moving people within the company and adding new positions to beef up the teams that run our most complex projects. That means more help for engineering. It means additional project managers for conversational campaigns.

It means reassigning some salespeople to better serve those advertisers who told us they want to take advantage of the downturn to win market share from competitors.

John's post will explain more about these changes, and I'll be in touch again next week to introduce a new face on the Author Services team and tell you about some improvements in the ways we'll work with you when you're participating in conversational campaigns. Please contact me with any questions or concerns.

As always, thanks for being our close partners.
All my best,
Neil

Armstrong makes for a nice story, but she's far from exemplary. The Times gets this much right: So long as women bloggers stick to topics that publishers know they can sell ads against, they're in business:

To the disappointment of some women who want sites that focus on serious issues like politics, advertisers are not interested in every kind of content. They gravitate to the tried-and-true topics of women’s magazines: fashion, beauty, celebrities and love life.

But blogging is now a crowded space, and it's next to impossible for an unknown to start blogging and attract a sponsor-defying audience. For any woman looking to get a piece of those blog dollars now, her choices boil down to allying with a larger publisher, and sticking to writing about beauty, babies, and other aspirational homemaking hints.

Oh, you were hoping to get paid by rich white men like Tim Draper to write about girl power? That's almost as cute as the baby outfit you just picked up at Kidiniki for your nephew.

Lots of businesses get hate mail, but few owners react the way Dooce's Heather Armstrong does. She prints out nasty emails, puts them in her driveway and drives over them with her car. "That's the attitude I have," she says, "and it's made my life a thousand percent better."

Heather asks Jason why he didn't choose advertising. "I don't like ads," he says.

Jason turns it around. Why didn't Heather use a subscription model? "After all, people are obsessed with you."
Heather: "What?! I don't get that at all!"
Jason: "Well, I'm obsessed with you." He fakes a lunge at Heather. Glorious. She needs some time to calm down.

Jason: "I think Kottke was out of the website before that—"
Heather: "You're talking like Elmo!"

The talk is already tapering; hopefully there'll just be a navel-gazing lull before a pickup, cause we've got 40 minutes of Dooce and Kottke to go.

Woohoo! Heather: "I saw you and thought, 'Well...he's good for links.'" Audience laughtrack goes "Oooooh."

More coverage from Kyle Bunch on Blogebrity.

Photo: jmacias [Flickr]
Live at Kottke-Dooce [Blogebrity]