<link href=’http://****.com/favicon.ico’ rel=’icon’/>
**** is the hosting site where your favicon file needs to be hosted.
We tried this new feature on our blog, but unfortunately I think that the feature is currently not working with custom blogger domains. But if you are on a blogspot URL, the feature seems to be working perfectly fine.
Just sign in to your blogger account, go to Design > Page Elements tab and click Edit on the new “Favicon” setting above the navbar element:
Click on Save and view your blog.
Hope, Blogger will fix this feature soon for custom blogger domains. If you are on custom blogger domain [www.****.com], then you can add the favicon by editing your HTML as shown above.