Demand Media and the Decline of the Content Farm
December 19, 2013
An article in Variety, “Epic Fail: the Rise and Fall of Demand Media” can be read as a cautionary tale for the search engine optimization and content marketing crowd. Just a few short years ago, the newly-public, five-year-old company out of Santa Monica saw its market capitalization top $2 billion. Now, however, writer Andrew Wallenstein contrasts that success with the company’s status today. Demand Media is now worth about a quarter of its peak value, and was forced into several rounds of layoffs this year.
The company is prudently turning its focus to its successful side—domain registrations—and Wallenstein predicts the media side will soon be sold off or taken private. What went wrong? Well, we’ve always maintained that a building a business, nay an industry, around gaming Google‘s search engine was just asking for trouble.
The article recalls:
“Early on, Demand used [its domain-name registration service’s] 1 million generic domain names (such as ‘3dblurayplayers.com’) to serve up relevant ads to people searching for specific topics. These ‘domain parking’ pages were immensely profitable, generating north of $100,000 per day, according to a former Demand exec who requested anonymity. ‘That’s $35 million-$40 million per year without doing any work,’ the exec said.
But the tactic was fundamentally a bait-and-switch. Users landed on the pages expecting to find information on a subject and instead found an ad. To try to drive up traffic, Demand shifted its strategy, populating the sites with thematically related content….
Demand then continued to build out the content-farm strategy, treating the domain-name registration business as largely separate from the content-production arm. Paying contributors comparatively little — usually less than $20 for a single article or video — it built up a stockpile of content against which it sold targeted advertising.”
This tactic (responsible for much of the useless content populating the Web) exploded and was adopted by copy-cats. Since then, however, both users and Google’s algorithm have wised up, making content farms much less profitable. On the bright side, this means less incentive to fill websites with baloney. Hooray!
Cynthia Murrell, December 19, 2013
Sponsored by ArnoldIT.com, developer of Augmentext
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