Posted by How would you feel if you found out that everything you are reading in the newspaper was chosen for you by a robot?
Would you have confidence in the choice of topics and its quality? Is it even possible for a robot to figure out what works in a newspaper? Behind the scenes at any newspaper is a crack editorial team composed of editors and journalists who spend their days hunting for the news that matters most to you. Some of it is local, some national and some global. They meticulously curate and edit this content so that it fits within the allotted pages. Success in the publishing business comes from the publishing company that employs the best people who have a "nose for news." The amount of pages published daily in this newspaper is (somewhat) predicated on how much advertising is sold. That’s the true business model (beyond the cover price and subscriptions). As the publishers of your local paper creates a compelling enough newspaper, this grows the audience, and that larger audience is attractive to advertisers.
The big question is: Can robots do a better job than these editors in knowing what content you are most interested in?
We may have uncovered the answer to this question last week, when Demand Media went public. Demand Media Inc. is a U.S. company based in Santa Monica, California, and is headed by Richard Rosenblatt, who is the former chairman of MySpace. The business model of Demand Media is unique. Through studying Web analytics and niche topics that are getting search engine traffic online, Demand Media uses the information to create content (mostly text articles and videos). This content is then syndicated across the Internet and the articles are coupled with Google‘s AdSense advertising program (which generates contextually relevant ads that are only paid for by the advertiser if someone clicks on it).
It seems like a genius business model, doesn’t it?
If people are looking for a particular type of content and Demand Media can figure out what that content is, get someone to create it, and monetize the article, it seems like not only have the robots figured out what type of content the consumers want, but they’ve also uncovered a simple and elegant revenue model to match it. Wall Street seems to agree. When Demand Media went public last Wednesday, the shares soared 33 per cent in their first day of trading. The closing price on its first day of trading brought Demand Media a market cap of close to $1.9 billion – making it larger than the New York Times Co. and Time Inc.
But all is not perfect for Demand Media.
While it might seem like an entirely new type of company to you, many companies over the years developed a similar business model. The success of this type of business is predicated on the ability to not only create, monetize and syndicate content, but to get it to the top of a search engine’s natural listings as well. This is where things get interesting: Companies such as Google, Yahoo and Bing are not looking for just any type of content to be present on the first page of search results. Their success is based on a search delivering the best result – which means quality and relevance. Demand Media (and other companies with similar business models) are often accused by search engines and media as having low-quality content akin to spam. "The company’s sites, which include eHow, Answerbag and Livestrong, ranked the firm as the nation’s 17th-biggest Web property overall in November, according to ComScore, as 105 million viewers clicked on its how-to articles and videos on topics such as ‘How to sew your own pillow,’" reported the Los Angeles Times in an article titled, Demand Media shares jump 33% in trading debut.
These types of content creation and syndication companies have been labelled "content farms" and it’s something that search engines such as Google have been paying close attention to.
The last thing the major search engines need is someone creating content that has been gamed through links, keyword focus and other search engine optimization tactics to be placed at the top of their results. What Google (and the others) really want is the most relevant answer at the top. Rosenblatt counters that the content Demand Media creates is the type of content people are looking for. "Each article is actually touched by 14 humans, titling, writing, fact checking and copy editing," Rosenblatt said in that same Los Angeles Times article. "We can’t imagine a more rigorous quality process. We think content farms are non-original, duplicative, spammy content. And that’s not us."
Google bites back (sort of).
Regardless of how Rosenblatt feels, in a blog post on Google’s official blog titled, Google Search And Search Engine Spam, written by Matt Cutts (principal engineer and head of the "webspam" team at Google), he says: "As ‘pure webspam’ has decreased over time, attention has shifted instead to ‘content farms’ … In 2010, we launched two major algorithmic changes focused on low-quality sites. Nonetheless, we hear the feedback from the Web loud and clear: people are asking for even stronger action on content farms and sites that consist primarily of spammy or low-quality content. We take pride in Google search and strive to make each and every search perfect. The fact is that we’re not perfect, and combined with users’ skyrocketing expectations of Google, these imperfections get magnified in perception. However, we can and should do better."
This is where the business paradox kicks in…
Demand Media’s success is directly tied to Google’s financial success. The more successful Demand Media is, the more advertising revenue Google gets. If Google begins punishing Demand Media’s content by lowering its relevancy and placement in their search results, they are also hurting their own financial outcome (especially when you look at the financial and traffic success that Demand Media is experiencing).
Who decides what the definition of "quality content" really is? Is it the editors of the newspaper, the webspam team at Google, the Web analytics behind Demand Media or you?
The above posting is my twice-monthly column for the Montreal Gazette and Vancouver Sun newspapers called, New Business – Six Pixels of Separation. I cross-post it here with all the links and tags for your reading pleasure, but you can check out the original versions online here:
- Montreal Gazette – The unique business model of Demand Media.
- Vancouver Sun – not yet published.
Never another podcast episode or article 
I see another business opportunity. A subscription-based plug in for browsers that allows a user to ignore sites and the their publishers who engage in this practice. Feedback from users along with research is used to flag search engine results – Origin = reputation.
Mitch, There was a story in the NYT a few months ago, business using terrible PR to rig the Google algorithm game by getting bad reviews – on purpose – which led to tons of top referring links, keeping them atop the Google search board. Raised the debate of how and if Google should decide what is “quality” or what has “value” and what if they don’t like say a particular political slant or as you said, if something hurts the revenue stream. Slippery slope, and this is where I insert someone else’s joke about Google going self-aware in a few years, killing us all.
Interesting question on who controls what we read and see: editors, Google, robots? For my local major daily, I have to crawl through the website for things relevant to me, for stories that aren’t national or AP. Yet one of the smaller newspaper sites, the editor mentioned once in a meeting about customizing the site via clicks and tracking those stories visitors really did read and share. Perhaps they’re not demanding “quality” content, but by reading and clicking, these readers are driving more of what they see, which is local, regional news. As content consumers and one who uses search and Google for much of my news, I think we do need to demand more quality from the content producers and curators, to use Danny Brown’s term. FWIW.
You ask me if I would have confidence in a robot to choose topics for me? Let me tell you, I know journalists in Italy, and I can safely say that, yes, I would have a lot more confidence in a robot. I’d probably read a lot less about who goes in bed with whom and the latest Big Brother happenings, and more about things that really matters.
Ideally, if I had a way to be presented with content that really interest me, from various topics, I’d be more than willing to give up part of my privacy to let this service “scan” my habits.
To answer your question, I believe that it’s the user who decides what is quality content, and a real successful service must predict this pattern and act accordingly. I am not sure where the “content war” will lead Google or Demand Media, but one thing I know is that I stopped trusting editors a long time ago.
Hello, my friend, timely piece.
To answer your last question re: “Who decides what the definition of quality content is”, I would say anyone who has spent time in the trenches as a pureplay journalist (so perhaps the editors of publications/periodicals).
I have to say that the Demand Media thing really ticks me off. Here’s a response I wrote to another article in AdAge that was essentially in praise of Rosenblatt’s venture:
What are we really talking about here – success of the IPO (which can mean a lot of things) or the long-term scalability of Demand’s business model?
Demand Media pays what the market will bear – which is relatively little – because inventory and demand are in flux. Media companies have NOT always scrambled to give people content they want, they’ve scrambled to shoehorn them into media environments to inflate demand.
Media companies also do not understand what works about the publishing business: which is that good quality comes at a premium (even if some versions of that content are offered for free). The perceived popularity of the platform is predicated on the fact that tons of journalists are out of work, not because it is a healthy alternative. Between journalists, advertisers and pure-play publishers, the entire market is cannibalizing itself because it is still beholden to broken media model.
“Content farms” are analogous to raising chickens on birdseed.
A similar construct applies to the IPO. Of course it is getting a lot of flack — it’s been valued higher than the Wall Street Journal for chrissakes! The company is $10M in the red and has yet to prove out its revenue model, yet the stock is trading on a valuation that is entirely speculative… didn’t we learn anything from the last bubble?
Make no mistake about it, The Demand Media model is a smart albeit temporary solution, a big band-aid on a broken leg. Because we have been poor (if not absent) at federating and regulating media inventory, Rosenblatt was wise to seize the opportunity to ride the “Social Media IPO” wave while it’s hot and fill his pockets, but let’s not fool ourselves into thinking that this model is sustainable.
Interested to hear your thoughts on this…
Best,
Gunther
I’d have to agree with Gabriele Maidecchi, it is the user who knows best what he or she wants as a good content, and we should see if there is a certain pattern to it. Robots might not be able to determine the pattern correctly since sometimes it would miss the “human factor” of the users’ preferences though.
-Angela Giles
Social Media and Publicity DIVA
***Yes, I’m giving away the 3rd edition of my Twitter Blueprint for FREE! No strings attached. http://ow.ly/3EwwG
Greetings from Indonesia, after I read the articles you write, to be honest I am very happy at all, because the article was very beneficial for the people, hopefully this does not stop here only, please visit my blogs and please provide comments on these blogs for progress I personally, am glad I met you, success always. Thank you
Tobias, that’s not necessary. If Google doesn’t compensate for the mechanized content, they become irrelevant.
I don’t think there is any one right answer. What I consider great/relevant content will not be the same as what you or my Dad or Mom or neighbour or sisters or brothers think is great content.
What the bots are finding is popular content which is not the same thing as great content.
I like the idea of demand content. I love the idea of getting a single source of relevant, interesting, reliable news. But we need to think of it in terms of Chris Anderson’s Long Tail. That’s where the value of technology should shine. We have the technology to create a (semi) personalized news service. What I would get doesn’t need to be the same as what you would get.
As to Google search, they are walking a fine line between eliminating relevant results and displaying irrelevant. Personally, I’m okay with some junk if it means I get all the good ones, too. They run the risk of fine-tuning themselves out of existence.
This business model, while ingenious, has to back itself up with quality in its work, how it reports, and develop a repore with its customers for the business to grow and thrive. Couple great reporting with good video production and they have a chance at becoming THE internet source for news. At AMS Pictures, we’re keeping an eye out for these types of businesses just in case they need some video work done!
It’s an interesting business model. The only people who can really tell you if the content is “spammy” are those who visit. What’s the bounce rate? What time do people spend on the sites? What % of the visitors return?
If the content is wrong, and people aren’t intersted in it eventually these sites will probably die a natural death, regardless of search engine rankings.
Interesting that Livestrong is one of their sites, it might be niche, but certainly doesn’t seem to be part of the model. I post links to Livestrong quite often on my community site for families affected by childhood cancer.
Seems to me it’s incumbent on all of us to gather (through our Readers or other methods) only that content that we really want to read. And when it becomes spun garbage, we stop reading, close those RSS receivers, and their numbers go down. When someone becomes irrelevant, they will have to stop publishing pablum. But with SO much info out there, we HAVE to rely on those strong sources we trust and ignore the others… or we’ll be reading all day and getting nothing done.
Charlie Seymour Jr
http://RepairYourOwnLegendNow.com
You are right Charlie.
We have to know what we are reading or what we want to read. But I have to say that even those strong sources of media out there also have tendencies to fall under irrelevant topics(well sometimes).