Understanding Article Economics

Demand Media has developed an algorithm for predicting high value content.

By Matt Kinsman
04/29/2008

Demand Media Is a Startup traditional publishers should be paying close attention to. Founded in 2006 by Richard Rosenblatt, former CEO of Intermix Media (the company behind MySpace) and private equity vet Shawn Colo, the company offers a network of more than 60 general and special interest sites such as eHow.com and Cracked.com which draw more than 60 million unique visitors per month by leveraging user-generated content including articles and video.

Demand Media generates about $150 million, is profitable and there is talk of prepping for an IPO in 2009. But the biggest takeaway for traditional publishers isn’t so much how Demand has been able to leverage user-generated content as a viable business model but the way the company has developed algorithms that predict how content will perform in terms of driving traffic.

Before we get too far into this, no, they aren’t sharing the secret sauce (partly for obvious proprietary concerns but also because partnering with traditional publishers is the next step). But co-founder Shawn Colo does offer some general tips for publishers on how to take stock of their content. “You have to follow the logic of ‘It’s a search-driven world,’” says Colo. “Quality has nothing to do with findability but it has everything to do with keeping the audience engaged.”

1. Can your editors write a killer headline? Great. Now make sure they can write it for the search engines too (which entails a more simplified, to-the-point style). “Our staff editors spend a lot of time working on titling and making sure articles are optimized for search,” says Colo. “For video, editors might go back in and edit the metadata to make sure they’re optimized for search as well.”

2. Collect and analyze as much data as you can, including keyword pricing. “You’ve got to have a lot of data to really prioritize which articles work well,” says Colo. “It’s a combination of a lot of what we’ve done on the registrar side, and looking at key word prices as a metric of how to determine value.”

3. Give content the chance to mature. In today’s “go-go” Web atmosphere, constant updates are mandatory. But does that reduce the chance of people seeing it? “We worked with a publisher who had an editorial calendar that they refreshed weekly,” says Colo. “But they were changing articles just as they were reaching their maturity from a search perspective. Just as they hit maximum earning potential, they were taken off the site.”

4. Context, not content is king, and that’s true for social media as well. Just building it doesn’t mean that they will come. “Now that you have a community tab, that doesn’t mean you have a community,” says Colo. “In Version 1.0, you needed community. Now you want to make sure people can comment within articles and you need to show profiles in a contextual way, not just have them off in this dark community corner.”

Demand users can sign up for an account and pull down topics created based on algorithms for high value articles that fit the voice. “The community at large can look at this and say, ‘I know how to get a private equity job, I can write that part of it,’” says Colo.

The Demand Media network has grown thanks to its investment in content and in on-staff editors who know how make the most out of positioning the content for a wider audience, according to Colo. “You need to open up as many side doors as possible. That’s what I’m talking about in terms of investing in edit and content,” he adds. “The more contextually relevant articles you add to a site that’s architected for search, the more traffic you get.”