Content Farm’s screwed-up business models, the Human Web and the end of the SEO domination?

This post has been written by Guillaume Decugis, Scoop.it’s CEO, and has been published on Business Insider

A little more than a year ago, Wired Magazine published a story on Demand Media describing in details how what’s now being called Content Farms worked. It looked brilliant. No more articles produced in the vague by journalists with no idea of who would be interested in reading them. Demand Media had it all figured out: analyze Google and you’ll not only know what people are interested in reading about, but also in what companies are interested in advertising about.

But Demand Media and Content Farms didn’t stop here. They’ve pushed further the industrial rationalization of the media business: now that you know what content to produce, get it done fast and cheap by starving freelancers. And recruit SEO Top Guns to make sure your sites rank first in Google. No need for quality content produced by well-paid journalists: if you know how to perform search engine optimization, your low quality, rapidly-produced video or “article” will top Google’s results and dwarf playing-by-the-book regular media’s traffic.

If you pushed the model further, it was like imagining the future of media being a content factory (Demand Media and the likes), distributed by a search algorithm (Google Search) and monetized by an advertising factory (Google AdSense).

The Matrix.

And it might actually happen…

What’s interesting to me is that it might not. For a number of reasons and trends we start to see emerge.

First, in spite of what Wired claimed at the time, Demand Media doesn’t seem to be “profitable as hell”. A private company with no obligation to report its financials, Demand Media seems to have entertained the illusion of being profitable. Primarily through the use of an exotic measure of profitability that no public company would be allowed to use (OIBDA which stands for operating income before depreciation and amortization which means in short without taking into account the large content costs the company has to face to pay its army of freelancers). But also through accounting rules that seem far from being cautious and that caused Demand Media’s IPO to recently be delayed. Some (Scott Austin or Bo Peabody) think at the end of the day, the company never turned a profit, in the regular meaning of the word. And this in spite of its scale: $200m+ revenue in 2010 according to the documents submitted to the SEC for the IPO. Which means it’s not today than smaller Content Farms could expect to break-even if they don’t come out with a different model.

While Demand Media might actually end up a profitable company and successfully IPO, there’s another major trend that should put content farms in perspective: Social Media. Whatever definition you want to give to the word, there’s the idea that content will be either created, distributed, curated or recommended by humans. Not by a factory. Now, the interesting thing is that 2010 has seen the Social Web becoming huge with Facebook now being bigger in traffic than Google. Social Media sites, and not only Facebook, are all taking a bite at the Google ecosystem’s monopoly on the Web: product reviews, purchase recommendations, display advertising, traffic generation, local search, etc… All of these now have a social solution in the form of Facebook, Twitter or some other social start-up.

The way I like to interpret that trend is that, fundamentally, like the Will Smith character in “I, Robot”, humans don’t trust robots. Or rather they don’t trust robots as much as they trust other human beings. We will trust a friend more, in spite of all the human biases that a scientific mind would point out, when he tells us that this laptop works great or that this ski resort was awesome.

That’s what Social Media is all about: making it easy for humans to handle the content process: creation, distribution and curation. It started at the creation level with personal pages and blogs. It exploded at the distribution stage with Facebook which started as a Social Network but which is now often referred to as a Social Media – probably under Twitter challenging impulse and focus on content. Our News Feeds and Timelines and nothing but large conveyor belts of content pushed to us by other human beings rather than algorithms.

Critics say that this explosion actually created confusion rather than quality. Because until recently, the fundamental part of the content process which is curation – the act of selecting, organizing, contextualizing and sharing content – was not properly addressed by the Social Media revolution. While in theory, following the right people will bring you the right content, we all know how much a Twitter timeline can create an information overload feeling.

There have been attempts to bring algorithms to the rescue to clarify social media but no clear winner has emerged and some such as Digg are actually on the declining trend. Curation will thus also be a battlefield in the Robot vs People war as with Human or Social Curation, the content process is about to enter a new phase in the humanization change I just described.

Curation is not new. But the democratization of curation is. Some, including me, see Social Curation (this time not done by algorithms but by people manually selecting, editorializing and sharing content) as a major development of 2011 (disclaimer: I am the CEO of Scoop.it(http://scoop.it), a publishing platform that works with content curation). Thanks to such tools, anyone can now become the editor-in-chief of his own media, publish it and distribute it to an audience which are not just friends or followers but people sharing the same interest.

Social curation tools leverage the passion, the expertise, and the propensity to share of the curators to make sense of the web, for all. This new form of expression brings 2 advantages that curation algorithms didn’t have: context and topic diversity. The former is key as it brings meaning and the latter also is critical as information overload is not so much about having too much content than it is about having too much non-interesting content, hence the need for niche, detailed and precise topics so that all readers can pick up the few that precisely match their interests.

If they prevail, fueled by the appetite for expression that social media users seem to have plenty of, Human curation could be the ultimate weapon of the “Human Web”, a word I like a lot and that I read first in a great article by Tom Forenski.

Will there be a winner? I doubt it.

I’m not predicting Google’s extinction nor Demand Media failure. And I don’t think this Human Web should be replacing to the algorithmic one. It should come in addition to it, challenge it and compete with it. And hopefully we can have the best of both Webs.

I don’t want to end up in the Matrix. But I’m not ready to burn my laptop either.

Rate this post: (No Ratings Yet)

---

Loading...