Lessons From the Content Farm

With Demand Media’s IPO coming up fast, many reporters and editors are wondering: will content farms sound the death knell for professional content sites? But what they should be asking is: what can we learn from Demand Media to beat them at their own game?

Demand Media has turned traditional journalism on its head, flipping the model to create content that meets user demand, and using algorithms to determine which content makes the most money. For better or worse, its strategy has been effective. Search for anything from “how to bake a yellow cake” to “how to belch,” and you’ll find Demand Media content at the top of the search results.
 
With AOL and Yahoo adopting similar content strategies, it’s clear Demand Media is changing the nature of the publishing world. Critics complain that Demand Media is a journalism killer because it uses low-paid, non-experts to write the content.

But adopting Demand Media-like tactics may actually be key to many professional publishers’ survival. Other publishers need to:

1) Recognize that most content has “lifetime value.”
A key component to the Demand Media mentality is that content has value not just when it’s new, but over the long term. A mass audience might read a new article, but a long tail of several hundred to several thousand people might find that article useful at any given time in the future — most commonly, when they use search engines to find the answer to a question.

And as much as it may tax journalistic sensibilities, publishers need to embrace the fact that some articles have more lifetime value in terms of advertising revenue than others. Evergreen content where publishers have expertise will provide more revenue to help pay for all editorial efforts.

2) Identify high-value content.
Once publishers begin to think about content in terms of monetization, they can implement the next part of Demand Media’s strategy: monitoring which topics and questions interest Web users and offering them content to match.

And here, many publishers have a head start on Demand Media. Where Demand Media identifies high-value Google and other search terms and hires inexpensive freelancers to write the articles, many publishers have access to their own content libraries full of evergreen stories on the same topics. Others have valuable, search-friendly facts embedded in last week’s or last year’s news stories. Publishers can resurface stories with high reuse potential, as well as assign search-friendly stories to existing staff or freelancers, writing high-value articles to their own standards.

3) Pick your search engine battles.
Demand Media has grown rapidly in part because few publishers are competing to own search-friendly topics. Or, to be precise, few are competing on topics that have lifetime value and high revenue potential. Most publishers now have search engine optimization (SEO) programs in place to try to push their content to the top of search engine results. Yet they’re not doing this with revenue in mind, which is where Demand Media starts its day.

Here again, many publishers may have built-in advantages over Demand Media if they dare to think the same way. By combining a wealth of searchable content (both archived and newly created) with a well-known brand name (the Los Angeles Times, for example), professional publishers could edge out Demand Media articles in online searches.

4) Monetize with contextual ads.
A major part of content monetization too frequently overlooked by mainstream publishers but (surprise!) embraced by Demand Media is the value of cost-per-click (CPC) advertising (often, Google’s AdSense or Microsoft’s adCenter). CPC ads are more effective in hooking “drive-by” readers who come from search engines, since contextual ads can match their expressed interest. While display-ad targeting is evolving fast in the same direction, CPC is a vast, untapped revenue stream for most publishers ($11 billion spent last year vs. $5.4 billion spent on online display, according to an April report from Needham Insights).

5) Scale it up.
One thing Demand Media is good at is creating a lot of content. As Byrne Hobart reported on Business Insider, Demand Media has “2.2 million pieces of content (videos and articles). If that number is growing at 5,800 per day, it’s growing at approximately 24 percent per quarter.” One way publishers can build scale for their high-revenue content, as discussed, is to mine their often-large existing libraries.

Finally, publishers can also try to scale revenue faster than Demand Media can on a per article or per video basis. How? By winning on quality. High-end publishers have a distinct advantage in that their brand name and professional journalists are respected and trusted by readers.

An industry attitude shift may be under way. Publishers such as Hearst Newspapers and USA Today have already started to use Demand Media content on their sites. But instead of outsourcing the opportunity, publishers would serve themselves (and the public) well by applying these tactics to their own, high-quality content.

Robertson Barrett is chief strategy officer at Perfect Market.

See also: “Group Targets Content Farms”