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Rise of the Generators

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Content mill. Content farm. Scam. Try Googling “Demand Media,” “Associated Content” or "Seed.com," and those are some of the terms you’re likely to encounter. Yet if you read any content produced by these companies, you’re also likely to encounter ads from established brands like Chevrolet, Tide, AT&T, CoverGirl and Progressive Insurance.

Even as industry observers obsess over whether these next-gen content companies -- which churn out thousands of search-friendly articles usually produced by inexpensive freelancers -- are destroying journalism, advertisers don’t seem to care. According to digital buyers, while not every brand is right for this category, most aren’t scared off by this budget content model, despite lingering questions about quality and even SEO gamesmanship. “It’s cheap, but it’s smart,” said Edward Montes, evp, managing director, Havas Digital. “The quality of the placement and production are well done.”

Buyers like Demand Media and Associated Content can produce custom, highly targeted content for brands. And with the rise of blogs, many clients have grown more comfortable with the idea that long-tail, nonprofessional content “can be very valuable,” said Rich Kim, associate media director at RPA. “Niche content can represent an environment where people are most receptive.”

Still, skepticism endures. One buyer warned that these companies are skilled at getting “side door traffic” -- but not loyal users. Sloan Broderick, managing director, MediaCom Interaction, said that while he saw strong potential for local retail advertisers, conservative brands remain wary. “A company like Audi doesn’t want to be associated with anything that seems half-baked,” he said. But Associated Content CEO Patrick Keane said advertisers are often surprised by the company’s output. “We are more clean and well lit than many presume," Keane said. "This isn’t Facebook. We’re not having people throw sheep at each other. This is people seeking information on stuff like how to potty train a three-year-old. Brands are comfortable with unique voices on the Web.”

The sector is set to heat up more, as former Yahoo sales chief Joanne Bradford joins Demand just as it positions for an initial public offering. Over the summer, Demand also plans to revamp one of its core sites, eHow.com, with a more user-friendly design and Amazon.com-like editorial recommendation features. “This is about providing a great user experience…and really positioning our brand in the best light,” said Gregory Boudewijn, gm of eHow, which reaches more than 70 million unique users and dominates several comScore categories. “This is not just a periodical or a textbook. This is a place that people come back to again and again, with demonstrated intent. There is tremendous upside to our business in terms of advertising.”

It’s Demand Media’s reach and depth that Bradford plans to tout to advertisers. “We have fantastic data, a fantastic audience and high quality content,” she said. “To me that is game on. We have the largest media company that marketers don’t know."

And what of all the talk that companies like Demand Media and Associated Content are somehow cheapening content? “We just need to educate the market…about the rigorous edit process we have,” said Bradford. “That argument will eventually wear itself out.”

See also: "Yahoo's Identity Heft"