This week, Demand Media plans to go public, with an expected valuation north of $1.3 billion; the IPO is seen as a key indicator of market reception for tech IPOs in 2011. For the demand-driven content space, Demand's IPO represents the tip of the iceberg; it is the earliest sign that there is a major shift happening in the way in which brands approach reaching their target customers, and it has everything to do with the power and prevalence of search.
Search has become the primary means of information discovery in the US, with more than 18 billion searches being run on a monthly basis. The first to capitalize on this change in consumer behavior has been (surprise!) traditional media companies. As the sole providers of content online, those media companies saw more than half of their traffic coming from search, and they were able to monetize that traffic by selling access to their customer base in the form of traditional online advertising.
Marketers wanted to reach those searchers, and now spend more than $17B annually to reach them through paid search engine marketing (SEM.). As the cost of SEM has climbed significantly (see Google's 29% quarterly profit increase for proof), brands want to invest in a different way, reaching the same searchers, on the exact same searches, but through the natural search results on the left hand side of the screen instead of the paid search results on the right. This also gives brands the opportunity to engage with customers more directly through content creation.
The roots of the so-called "content farm" are planted in the rising cost and popularity of SEM initiatives by brands and media outlets alike. This has fueled Demand Media's growth ahead of its IPO. Demand will create custom content for a marketer on their eHow property (and other O&O properties) and wrap that custom content with the marketer's message. And these content farms have done one thing right: they have followed the consumer's thirst for certain types of information. What they have created in response, however, fails to satisfy. A better approach would be to use a similar demand-driven model, but to invest in knowledgeable writers who create quality content that can truly fulfill what readers seek.
The pendulum is swinging back. In the first days of television, companies like Procter & Gamble created soap operas to sell Ivory soap. They were directly involved in the production and financing of content. Over decades, we saw the pendulum swing away from brand-created content to the modern television model, where networks create/license the content and brands pay to advertise against it. With the launch of content marketing, we are now returning to a time when brands will create and compete for consumer attention directly.
Skyword, behind Procter & Gamble's Pampers brand, has engaged Moms to share their knowledge with Moms-to-Be by creating quality content for Pamper's site at www.pregnancy.pampers.com. The site exists as a resource for expectant mothers to learn from and interact with women that have been there and done that. By creating high-quality content on subjects that matter to their target customer, Pampers is able to not only reach consumers, but also build a bond with them by actually answering their questions.
With news from Google in recent days that they will be taking a closer look at "webspam," there has been a lot said about what this move will mean for Demand Media's IPO. Google's decision will benefit searchers by prioritizing quality content that actually creates value for the reader, over content that is simply meant to siphon search traffic. This will help brands that invest in quality content creation. It will also differentiate between those who use a demand-driven media model to create content that provides value to the consumer and the content farms that do not.
The content marketing industry will thrive only by creating real value for those people seeking information.
Tom Gerace is Founder and CEO of Skyword, the leader in Search-Driven Mediaä (SDM). Skyword offers a platform for demand-driven content creation to leading brands and media companies, allowing them to generate high-quality quality, demand-driven content. Customers include P&G, Everyday Health, and ImpreMedia. Tom can be reached at tom at skyword dot com