The Flaw in Demand Media's Fast-Food Content Model

After Mike Arrington and Paul Kedrosky's posts on fast-food content this week, I went back and reread the excellent October Wired article on Demand Media.

Demand produces tons of content (4,000 video clips and articles a day) related to specific keywords its software decides are lucrative.

The quality is lousy, but the company meets vast swaths of content demand that aren't currently being filled.

As Wired explains:

What Demand has realized is that the Internet gets only half of the simplest economic formula right: It has the supply part down but ignores demand. Give a million monkeys a million WordPress accounts and you still might never get a seven-point tutorial on how to keep wasps away from a swimming pool. Yet that’s what people want to know.

Demand makes money by cheaply producing articles that rank for "how to keep wasps away"-type searches, then selling ads next to those articles.

There's one problem with this business over time: It's an arbitrage, it's not creating lasting value.

Over time, businesses like exterminators will figure out that they don't need to purchase traffic from Demand. Instead, they can create their own awesome content about keeping wasps away from swimming pools, and replace Demand in Google's organic results.

As soon as exterminators start creating this kind of content, they'll realize they get a lot more value out of the content than just the value of the advertising they had been paying Demand for. They'll find significant additional value in PR, lead generation, social media growth, in internal company communication, and lots more I spelled out here.

The best part? When businesses create content, they have an incentive to do it well. Exterminators want a strong brand, so they'll write strong articles about keeping wasps away from pools.

Ultimately, these incentives will keep us from getting stuck the world of fast-food content that Mike and Paul fear.

Hiring an Inbound Marketer? Here's What You Should Look For.

One of the challenges of building a company in a new market is figuring out what type of employees to hire.

If you're Children's Hospital in Boston, you know you want to hire the best pediatricians you can find; if you're the HubSpot marketing team, developing a new approach to marketing, it's not clear who you want on your team.

Earlier this year David Meerman Scott pointed out that journalists could be great inbound marketers. I think that's absolutely true. But journalists and employers have to be careful about these types of hires. Inbound marketing requires qualities that not all journalist have.

Specifically, after a year of interviewing people at HubSpot, I think there are six key qualities that inbound marketers should look for new in hires. Journalist can develop these skills, but they do not by definition have them:

(1) Digital Intuition -- You need to understand how the web works. The web is an ecosystem, and if you don't intuitively understand the dynamics of this ecosystem -- how Twitter can drive traffic to a blog; the kinds of headlines that attract attention; the simple things you can do to build blog subscriptions -- you won't be able to help your company attract online visitors.

(2) Propensity to Create Content -- Do you share links? Do you publish photos? Do you have a website? A blog? Do you favorite videos? Companies today must do all of this. If you don't create this kind of content naturally on your own, you won't have the skills and experience needed to do it well for your company.

(3) Content Talent -- It's great if you have good intuition and a propensity to create content; it's even better if you're good at it -- if you write like Hemingway, if you shoot film like Scorsese. Great content stands out on the web, spreads quickly and attracts people to your site.

(4) A Salesy, Social Streak -- The best inbound marketers promote their own content. They build and nurture relationships, and they know how to use these relationships to spread their own content, without abusing them.

(5) Understanding & Acceptance of Content's Place -- This is the one where most journalists come up short. For businesses, content is a means to an end, not an end in and of itself. Every article, tweet and video is assessed based on its ability to generate visitors, leads and customers, not on any subjective judgment of content quality.

(6) All That Is Important in Any Other Job -- Passion, raw intelligence, creativity, leadership, toughness and work ethic.

If you're an inbound marketer thinking of hiring a journalist (or any other type of candidate), you should consider these qualities. If you're a journalist looking for an inbound marketing job, you should understand that these are the skills required for success.

My Talk on Inbound Marketing in Appleton, WI

Last month the fantastic folks at Red Shoes PR in Appleton, WI, invited me out to participate in their seminar, Bottom Line: Social Media for Business. I had a great time, and enjoyed meeting everybody out there. (There's more on the event from a local tv station here.)

Here's a recording of the talk I gave, broken into two videos. (Special thanks to Ross LaRocco for sending me the files.)

A Business Model for Content? Talk to Businesses.

Who will pay for content?

If you're a writer, a reporter, a film producer or some other sort of information artist, that's the billion-dollar question on your mind. The monetization schemes we've grown up with are deteriorating, and it's unclear where the next decade of pay checks will come from.

Lots of ideas are on the table (Jeff Jarvis recently summarized many), but most media makers are ignoring one strategy that is actually working: creating content for businesses.

I'm not talking about infomercials. I'm talking about content used as inbound marketing -- high-quality blogs, research and video that is useful and interesting to a business' customers. Businesses are finding that this type of media is an effective way of attracting potential customers to their web sites.

Consider the world of inside sales content. Ten years ago, the best way to monetize inside sales content was to publish it in a print magazine with advertising next to it. Today, companies that operate in this world have a huge incentive to create and publish content on their own. That's why some of the best sales content you'll find is on the blog of The Bridge Group, an inside sales services business.

This type of content has real business value. The HubSpot blog is currently generating about 400 or 500 leads a week for HubSpot's paid software package. Assuming we pay $10/lead for blog leads (and that's low, because the blog leads are very, very high quality), the blog is generating $4,000 to $5,000 in value for us a week. That's a model that works.

Of course, traditional media turns its nose up at content produced by business. Business content is biased and low quality, they assume.

But that's no longer true. Businesses now have an incentive to create high-quality content where bias is minimized and transparent. Businesses like HubSpot and The Bridge Group can generate lots of leads and traffic from content -- but only if readers embrace their content by linking and sharing.

I see this firsthand editing the HubSpot blog. The posts I'm not happy about (the ones I know will be less useful to our target customers) generate less traffic, links, leads and -- ultimately -- customers. That gives me a strong incentive to keep quality high.

Content produced by businesses isn't going to fill the gap left when newspapers disappear, but it will be part of the solution. If you're a content consumer, businesses will become an increasingly reliable source of information. If you're a content producer, businesses will become an increasingly reliable source of income.

A Remarkable Talk

One other thing: If you're not familiar with Seth and his work, check out Ellie's encyclopedic blog post.

What Works