This kind of thing can save the author money (no hotels, gas mileage, etc.). But it doesn't save them work. They have to prepare for each blog appearance. In some ways it can be more work since when you travel from store to store, you can pretty much recycle the talk. But with blogs, a lot of authors try to come up with new information for each visit.
It's not easy to tell if you get as many sales since it's not always possible to track the buying habits of someone stopping by the blog to read the tour post.
Of course, it doesn't have to be exclusive. Some writers do a virtual tour as well as a physical one. But blog tours are becoming more popular.
The fabulous writer Susan Wittig Albert is going to be doing a blog tour. She'll be stopping by Straight From Hel on her "trip." She hasn't set the date yet, but I'll keep you posted.
Here's what Susan said about blog tours and her tour in particular:
An author's blog "tour" involves a series of prearranged guest appearances on various blogs, scheduled for posting one or two a day. The posts might be chats, Q&A, guest posts, whatever. My publisher is supporting my tour by providing copies of The Tale of Hawthorn House for the drawing. We'll be giving away three books at every blog appearance, and there'll be a grand prize drawing at the end.
This tour runs from Nov. 5-14. Here's the current schedule: http://www.cottagetales.com/blogtour.shtml. I'll be "tracking" the tour on my own blogs (including my Amazon blog) and doing a wrap-up post about a week afterward, specifically for authors who are interested in trying this for themselves. I've enjoyed the process so far, and am already looking forward to doing a blog tour for Nightshade (China Bayles #16) in April 08.