I\’m pretty happy with the revenues the ad units on my websites generate every month. I\’d be a lot happier though with the revenues that Richard Rosenblatt\’s websites receive every month.
The former chairman of MySpace now runs Demand Media, a content company that\’s said to pick up an income of more than $200 million.
It helps that his company started with investments of $355 million in its first two years. But it helps too that Rosenblatt has taken a hard-headed approach to publishing content.
His company has created a series of algorithms that analyzes search data to look for topics that users want to read and which are underrepresented in search results. They then look at the value of the keywords in the article and the predicted clickthrough rate to produce an estimated lifetime ROI.
As long as that return is higher than the flat $15 fee that Demand Media pays its writers for articles, it commissions the content and publishes it.
It\’s exactly the opposite of the way Internet publishers usually approach content production. Most of us assume that if we create great content, visitors will come, traffic will grow and revenues will rise.
For Rosenblatt, the quality isn\’t important. The subject isn\’t important. The words and the passion behind them aren\’t important. The only thing that\’s important is whether the article has the keywords to pick up search traffic and generate a reasonable click price.
Most publishers don\’t have $355 million to spend on buying Internet real estate and paying smart people to produce smart algorithms. Most publishers don\’t have the time to build up a team of 10,000 freelance contributors. Most publishers write the articles themselves and few really want to spend their days thinking about techniques for fixing radiators or feeding gerbils — the kind of content that Demand Media publishes.
Most publishers write their own content, and researching stuff that dulls is just too much like work.
Write about the topics you love, are familiar with and want to share with others, and you can still make a profit. No less importantly, you\’ll have a good time doing it.
But that doesn\’t mean that Demand Media\’s focus on the bottom line can\’t teach us something important. Content has a value, and while that value may, in theory, be limitless, in practice, it\’s going to be restricted by the size of the market that wants to consume it. And the profits will be limited by the cost of producing it and the expenses involved in marketing it.
Internet publishing is a business and your product is your content. While you should be producing a product you like and have confidence in, you should also be keeping an eye on the cost of production and the size of the potential profit. Heartfelt passion is vital in online publishing success. But thinking about the numbers is crucial too.