Let's say you're surfing along on the web, happily visiting your favorite websites… when you notice a conversation on the site about another product.  The conversation peaks your interest, so you read and then decide you've got something to say about it, too.  After clicking a link that says "Add Your Comment", you're taken to another website where the conversation is actually taking place and it's there that you're able to join in the conversation.  You just happen to notice that the conversation is housed on a site that's "sponsored" by the manufacturer of the product the conversation is about.

What if I said that "conversation" was actually a paid advertisement?

According to ClickZ News, PR firm Edelman and RSS provider NewsGator have teamed up to introduce a new approach to online advertising called "Hosted Conversations".  Like the example I used above, hosted conversations are actual conversations taking place about specific products and services.  But the conversations are not free-form conversations in the traditional sense.

Advertisers pay to "sponsor" a conversation.  Edelman+NewsGator's new technology then scours the web for conversations already in progress that talk about the advertiser's product.  Those snips of conversation are then dynamically fed into the "hosted conversation" and the ball begins.  Website users who see the conversations and want to join in can do so.  All the while, Edelman is moderating the comments and an advertiser is sponsoring the container that holds the conversation.

It's really a great idea and an innovative way to put the power and consumer interest in social networking and consumer generated media to use for advertising purposes.  Instead of trying to find ways to stick advertisements inside of those new mediums, Edelman and NewsGator have found a way to stick those new mediums inside of advertisements.  It's an ingenious switcheroo that might just pay off well for the companies.  It will be interesting to see how the new system works out and if NewsGator (who created the underlying technology) ends up partnering with anyone else in the delivery of their service.