Video Marketing Blog

Consumers and Brands Demand (higher quality) Media

An IPO is on the horizon.  Demand Media will be going public! The online video world is all “a-twitter” (one of my mother’s iconic phrases rendered senseless by the modern era).  Instead, the online video world is “abuzz.” Should we sell our shares in Apple and try to get in?  Or should we “head for The Hills”?  (sorry mom, there goes another good one).

The argument for running the other way has a lot to do with this question:  does Demand Media make junk content, or do they make real content?   Is it spam, or isn’t it?  Let’s skip the argument about whether Demand Media’s content de-values journalism and degrades writers…that’s a whole other debate that many have covered.

If Demand Media makes real content, then their model is brilliant.  In the big, unfettered picture, here’s how that model works:

  1. Figure out what people are searching for.

  2. Pay nickels to have people write articles answering those questions, and pay a couple more nickels (but not a whole quarter) to have people make videos answering those questions

  3. Optimize like crazy so consumer queries result in Page One exposure for the content in search results

  4. Send those click-throughs to eHow (mostly) to read (or occasionally watch) the content that satisfies their query

  5. Create a ton of traffic on eHow as a result, generating a boatload of media impressions

  6. Collect the ad money that inevitably shows up whenever a media outlet succeeds in collecting a sufficient volume of eyeballs

  7. Charge more for the eyeballs than the nickels it took to make the content that brought them there

  8. Do it all day long until your site and your brand name stands for a reliable, trustworthy place for consumers to get information

  9. Therefore….and here’s the real kicker…with that eHow brand name standing for trust, reliability, and credibility, attract quality, big brand advertisers who, as a rule, insist on placing their advertising solely in high quality, credible environments.

Maybe you noticed that Steps 1 through 7 seemed pretty easy…lots of companies can do that and in fact, many are trying.  But then you get to Steps 8 and 9 and the bar suddenly gets reallyhigh because consumers and the advertisers set that bar, not press releases.

Demand Media sprang forth from eNom, which is still 40% of the company’s revenue.  eNom is a domain registration company that makes money from “errant clicks.”   Mistype a domain name, land on one of those content-empty sites filled with referrals of where you might really want to click, and Demand makes a nickel.  Interesting heritage for a “content” company now filling the web with articles that cost less than $6 to make and videos that cost less than $50.

Does Demand Media make content?  Or is Demand Media propagating a giant spam play?  Don’t ask them, ask the consumer if they trust what they find there, and ask brands if they find it to be a suitable advertising environment. Because at the end of the day, it will be consumer engagement and brand sponsorship that will make or break their model.

As for Mom’s iconic phrases? Well, it turns out that people don’t care for spam of any variety.