I followed the technique on this Finnish website.  I couldn't read the instructions, but the photos were clear enough: glue pieces of yarn to a fabric backing.  I used Red Heart cotton yarn in a variegated pattern and a piece of scrap linen blend fabric.

I measured and cut the fabric for a full size area rug, leaving a little on the ends to create fringe.

Pulling out the cross fibers on each end created fringe.

I taped a piece of wax paper to my work table.  I then taped the fabric backing to the wax paper making sure to cover the fringe on both ends to keep from getting glue on it.  Working on a small area at a time, I cut pieces of yarn longer than the width of the fabric and glued them to the fabric backing.  I measured repeatedly to make sure I was keeping the rows straight.  The fabric stretched as I went along, so I ended once I reached the length I wanted.

I cut off the original bottom fringe and made new fringe below the end of the glued yarn.  Flipping the rug over, I cut the excess from either side of the fabric backing.

Here is the finished area rug. :)

click image to enlarge