Blogads work, this blog is part of the proof!
I am very grateful to Jeff Jarvis for publishing an email he received from Jeff Sharlet, editor of the Revealer, a blog about religion at NYU.

You will notice a blogad for The Revealer in my site's upper-left column.

Jeff wrote Jeff that Blogads "blew conventional media out of the water" when it came to advertising returns:

The conventional media we chose were Beliefnet, Columbia Journalism Review, and American Journalism Review. CJR and AJR are small, specialty sites, but Beliefnet claims a readership of 2 million. I don't know what Talking Points, Little Green Footballs, and Daily Kos claim, but I'd estimate that our small, second-level blog ads on those sites EACH outperformed Beliefnet by a factor of 10. At least. Other blogs, like Matthew Yglesias, Reason's Hit and Run, and the Washington Monthly did so probably by a factor of five. And even very small blogs, like Donald Sensing's, beat Beliefnet [boldface added - DS].

This survey shows that blog readers are older and more affluent than most optimistic guestimates: 61% of blog readers responding to the survey are over 30, and 75% make more than $45,000 a year.

Moreover, blog readers are more cyber-active than I'd hoped: 54% of their news consumption is online. 21% are themselves bloggers and 46% describe themselves as opinion makers. And, in the last six months:

50% have spent more than $50 online on books.
47% have spent more than $500 online for plane tickets.
50% have contributed more than $50 to a cause or candidate, and 5% have contributed more than $1000. (Only 25% of NYTimes.com readers have contributed anything online in the last year.)