Demand Media in the Hot Seat

January 12, 2010

Bulk content producers are the latest next generation content business that irritates the poobahs in “real” publishing companies. The DNA of Demand Media marries with writers hungry to get their name in the Google index and earn some cash achieving this goal. That’s a potent combination. I must admit I don’t see much to raise my feathers. The database business is built along similar lines. Demand Media adds one or two twists; namely:

  1. Writers create content, post it to the Demand Media’s Pluck system, index the story, and get paid. No annoying human editors slow down the process.
  2. Media companies buy these stories, slap their label on them, and sell them in other publishing entities. Demand Media lists some of the media superstars who find a cheap source of good enough content ideal for their readers and the CFO’s blood pressure.
  3. New investors include some media savvy outfits; that is, smart money from Goldman Sachs, 3i Group, Generation Partners, Oak Investment Partners and Spectrum Equity Investors.

You can see a list of some of the Demand Media customers in the graphics on the Demand Media Web site that USA Today seems to be a customer of some Demand Media services.

When I read “Demand Media May Be Bad for Social Media but Not for Journalism”, I was surprised that the criticism of a company producing content would extend to social media. Here’s the passage that caught my attention:

I believe Demand Media is more of a threat to social media communications than it is to journalism and journalistic standards because of the kind of content it provides and what it does by providing search optimized content for corporate sites and evergreen content for the news industry.

With SEO undergoing seismic shocks, content has become a hot commodity for some Webmasters. Most companies can’t write too well or quickly. Demand Media has a method that generates several thousand stories a day. The company allegedly optimized the content, although I think this type of numerical recipe is like Macbeth witches’ brew. A great stage effect. A site with zero content can obtain Demand Media content. The inclusion of content might be just what the PageRank doctor ordered. Who knows?

Demand Media is not a “real” publisher. The coinage of the term “content farm” was a stroke of genius because it made it possible to discuss blogs, semi real publishing, and real publishing in a more interesting way. The idea is that a blog may be written by a few people but we know that blogs are not “real journalism”, according to some experts. The “real publishing company” engages in a centuries old tradition of picking content, paying a writer to write to the needs of the market as the publishing company sees them. This top down approach is where the notion of “knowing best” and “quality writing” emanates. The “content farm” is some weird beast that is worse than a blog and concerned less about “quality” than a traditional publishing company.

Baloney. The “content farm” is an information factory just like units of the Bureau of National Affairs, LexisNexis, West Publishing, and most commercial database companies. But “content farm” is way more suggestive than an “information factory”. What’s happening is that a phrase is making it possible to have a discussion about a business method that has been around a long, long time.

What’s happening is that certain high volume content production methods are being applied to different markets and at a price point that is appealing to some customers and to Webmasters who need a way to get traffic to a Web site.

Lots of talk over a business method that has been around for decades in electronic information. This is one more example of folks not knowing what they don’t know. In this case, the chatter is interesting but unlikely to halt the shift from top down content generation methods to alternatives.

The question I am considering: What happens when Google deploys its automated content generation technologies? I am looking forward to another big argument because when Google moves it will be too late to do anything about smart software that can write news and other types of documents with zero humans. None. How about that for low cost production. Demand Media pays humans and Google won’t have to. That will be something to see unfold.

Stephen E Arnold, January 12, 2010

A freebie. Thank goodness there seems to be an endless supply of regulatory authorities concerned about who pays me to write a blog article. Today my boss is the Department of Agriculture, a fine group.


4 Responses to “Demand Media in the Hot Seat”

  1. Oak Investment Partners - Topic Research, Trends and Surveys on February 3rd, 2010 5:48 pm

    […] I must admit I don’t see much to raise my feathers. The database business is built along … Read More RECOMMENDED BOOKS REVIEWS AND OPINIONS ESolar hits it big, becomes first […]

  2. Steve N on February 5th, 2010 7:56 pm

    I find Demand Media fascinating. Here is what I consider significant about them:

    -traditional media companies don’t see them as a threat – at all
    -yes, the content is hardly quality journalism
    -Demand Media will take a massive share of ad revenue right out of the pockets of traditional media

    Let’s face it: an article on how to de-ice my sidewalk is a much better context for a Honda snowblower ad than a news story on the disaster in Haiti. I believe THIS will be the key impact of Demand Media. For the first time in history, it is so easy and cheap to produce easily findable, long-tail content that advertisers now have a much better alternative for ad placement. In our experience, the boring, middle-of-the road type of “journalism” represented by Demand produced a 400% lift in campaign results over placements on traditional media sites. Historically, traditional media needed controversial opinion, rousing entertainment or tragedy to sell subscriptions. These same companies, who are now still locked-into their editorial styles, were the only game in town for advertisers – particularly when reach was the only measure of campaign success.
    All of that changes as of now. And no, blogging is not as much of a threat to traditional media because 95% of bloggers are unreachable by premium advertisers – and most advertisers want assurances on the type and tone of the content. Demand (and Glam, and the like) have their own media salesforces with established relationships, they have reach and they have compelling data that will make advertisers drool. I’m really pulling for traditional media brands, but they had better wake up and take notice.

  3. Curating the web one story at a time » Demand Media – They Get It. on February 5th, 2010 7:59 pm

    […] Demand Media in the Hot Seat ( […]

  4. Stephen E. Arnold on February 7th, 2010 6:30 pm

    Steve N

    Thanks for the comment. I look forward to more from you.

    Stephen E Arnold, February 7, 2010

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