If you happened to wake from a two-year nap today, you might be surprised to read that content is the new, and only, solution for marketing success. You would wonder, what happened to all the fundamentals? Article after blog post after conference session after more articles – all about “creating, branding and marketing content.”
Over the next few days, we shall, for posterity's sake, peel apart this rather large and odorous onion.
In each part of our series, we will assess one of the main types of content. Today we review one that has no real name, just a derogatory label: “content farm.” We believe that is too kind. Nothing is really nurtured or grown on a content farm. The content is dead on arrival. Dead on planting, if you will.
Exhibit A is a company called Demand Media. Its core business model is simple – sign up hundreds of freelance writers to churn out thin-as-tissue “how to” articles, spread it across the Interwebs like so much manure, and pay them pennies on the, er, pennies of advertising revenue.
We told you here, six months after Demand Media’s IPO, that its business was doomed…that it could not scale as a public company with shareholders clamoring for 15% annual growth.
It has come to pass, pretty much as we predicted. Although Google Panda, a series of NSA-like search engine algorithm changes, was a big factor in throttling Demand Media’s revenue growth from “content” throughout 2011, the company seemed to be back on track in early 2012.
But when you string the 2012 quarterly numbers up to the present, you will notice an interesting trend in Demand Media’s online ad revenue growth.
Q2-2012: + 9.3 %
Q3-2012: + 6.3 %
Q4-2012: + 6.0 %
Q1-2013: minus 3.9 %
Q2-2013: + 0.8 %
Q3-2013: minus 9.4 %
The trend is obvious. And now Demand Media is stuck at a quarterly run rate of $55 million in content ad revenue, plus or minus a couple of hack “how to” articles.
Now for the “De-manned” reference in our headline. In mid-October, Demand Media’s CEO resigned. That’s right – he quit. Then just two weeks later, the brains behind the whole content farming model, “Chief Innovation Officer” Byron Reese, was sacked.
Next, the content angle on this story. Every quarter since mid-2011, Demand Media showed a double-digit increase in page views on its “owned and operated” sites (eHow, Cracked, et al.). Yet every quarter, its revenue-per-thousand views grew at a much lower rate, and actually began to DECLINE late in 2012. And every quarter thereafter.
Sure, blame Demand Media’s fall on Google Panda. But we believe that Internet users have come to understand the value, or lack thereof, of “farmed content.” Advertisers who are paying attention, who should rightly scoff at the popular notion that all content is marketable, would be wise to instruct their media buyers to stay away from content farms.
We’ll know how many advertisers are thinking judiciously about their support of content – i.e., about where to place their advertising – about one year hence, about the time that the other big content farm, About.com, has its plug just about pulled by its new owner IAC.