Readers of GNC are well aware of the general feelings towards the pay for post business model. While Izea has recognised that undeclared ads are not a good idea, the business model still seems to me to be at the ‘mass mailing’ end of the marketing spectrum. If a company knows who they want to advertise with they can approach them directly. If they don’t Izea can help them get to someone, but it is sloppy marketing.
Mike Arrington is no fan of the company either, but Izea are keen to get him to advertise them. They are not asking him to become a PPP blogger, they want him to advertise one of their other products. An audacious move, and one Mike has decided to put to his readers in a poll. “Owning the controversy” is a classic PR tool and Izea are showing here that they at least know something about marketing. They know there is a lot of controversy about their product at the moment, but controversy builds talk, and the talk gets the name out. For a company like Izea, every negative post probably drives one or two smaller bloggers to their site to check them out.
A company can only safely get a short run of positive benefit from negative publicity before the balance can shift fast and hard. Izea would appear to recognise the need to start getting its reputation under control. By starting a dialogue with high profile detractors they can win them around to at least be neutral. The Internet shows that it is much easier to be impersonally insulting than to attack someone who you know. By engaging Mike in conversation, Ted Murphy changes the landscape from TechCruch bagging PPP to Mike talking to/about Ted. The goal is not to get Mike to be an Izea supporter, but to get him to feel less comfortable with sticking the boot in. Any reduction in the level or amount of negative comments is as good, or better than an increase in positive comments elsewhere.
This is not a perfect technique and can back fire, and is also harder to carry out if the target is aware of what is happening (oops 
) It is a good start for Izea though that Mike has put it to the vote, and explained the personal appeal to his audience. Even better is that when I checked the poll was pretty close. Regardless of how you feel about them, PPP/Izea are at least providing some good entertainment.
BTW, if you want to see a master of ‘owning the controversy’ look no further than Jason Calacanis. I posted last week on Business Geek on his handling of a negative blog post.