Introduction
How macabre it may be, adding blood to text is perhaps one of the most coolest things to do. If done right of course!
For my conceptual game Malavita, which was a mafia-game set in the 50's, I designed a logo with classy white text with blood on it. Many people kept asking me how I did that and little did I know that the tutorial I later made out of it, was so popular.
Technically, it IS a very nifty technique you need to learn. It teaches you all about blending-modes and masking.

Preparing the text
For this tutorial, I used the non-commercial font "Corleone" that is, in fact, the font of the famous (and quite awesome) movie The Godfather. It can be downloaded on various fonts-websites.
In a new document, on a new layer, add some desired text. I started with the name of the game I mentioned earlier. As for a background, you're prefectly free. I chose darkgrey, because that's what overall style the game was. Just make sure the text is white.

Simply add these layer-styles/blending-options to the text:

Getting the brushes
And now for the tricky part. I rewrote this part, because not only is this part very hard, but also because I failed to describe it detailed enough in my previous version. Luckily, now I hope I will!
Firstly, you will need to download the brushes we are going to use. If you have a good place to find nice blood-brushes, use that source. Or maybe you already have them? If not, or if you just want some awesome new ones, go to Angryblue where they got awesome blood-brushes in the downloads-section.

How to install them you might ask? If you're downloaded the file and stumbled across a zipped file containing an .abr-file, copy that file to a nice and safe location. Some say you have to copy it to the photoshop-folder, but you don't have to. If you want, it's cleaner, but it doesn't make any difference.
Once you go back to Photoshop, go to your brush-tool and open the Brush Preset Picker by clicking on the arrow pointing down in the upper taskbar containing the type of brush. Then, press the play-looking button in the top right corner and select the option Load Brushes and use the finder to locate your brushes. They will automatically be added to your list. Then simply select one and choose the desired color. In this case red.
And unlike a normal brush, just click once to apply this stencil-brush, if you will.

Adding the blood
To add the blood, create a new layer above the text-layer and use a nice red color to add some blood on that layer. Just fill it up and make sure it looks like a package of blood just got spilled.

Then change the blending-mode to Multiply to make sure the blood gets darker and "falls" over the shadows which will make it look like the blood is actually on the text.

And to miraculously remove all the blood that's not part of the text, press CTRL+SHIFT+G. WHat this does, is that it masks the layer selected with the layer underneath it. Meaning that everything not visible in the layer underneath, will remain invisible in the layer selected.

The bloody shadow
To create the bloody mess underneath the text, simply use one (or a few) of your blood brushes on a new layer and place that layer behind the text and the overlayed blood-layer. Remember again to use the same color as before and also the same blending-mode.
Using Edit>Transform>Perspective, transform the blood-layer that way, it will look like it's on the ground. To do that, you will have to perform 2 simple actions. Once you've activated the perspective-transformation, drag one of the top corner anchor-points closer to the center. When they are close enough, do not press ENTER yet, but go to Edit>Transform>Free Transform and drag the upper center anchor-point closer to the center.
That should make the blood-layer look like a "rug" laying underneath the text.

Finish it off with a nice shadow made using a VERY stretched circle on a new layer.
Create a new layer above the blood-carpet and grab the Circular Marquee-Tool and drag the tool from the left of the text to the right and a little bit down so you will get a very long egg (or pancake).
Fill that selection with black and go to Filter>Blur>Gaussian Blur and add a nice soft blur of 2-3 pixels. Then lower the opacity and admire your work!

Conclusion
As you've noticed by my last image, you can go all the way with this by applying this to many different materials. The beauty of this is that because you're using the blending-mode Multiply, you're making sure that the blood will ALWAYS overlay the surface realistic.
Try to experiment with other materials and not only text but also objects maybe. Or drops like me. If you got a very original outcome or an even better idea, email me or post your image in the comments and if it's original or just simply awesome, I will include it in the tutorial!
Thanks for reading and good luck with practicing!