February 8, 2010

What Happens When All Our Content Comes from Content Factories?

“Content factories” like Demand Media and Mahalo are turning the SEO industry inside-out. In the next few years, they will cut off the main source for entry-level SEO professionals, eliminate small web design agencies from the SEO business, and scoop up a bunch of ad dollars they absolutely don’t deserve.

The Internet is an efficient marketing: any source of cheap, high-quality traffic won’t stay cheap or high-quality for long. When I started doing SEO, one of the cheapest ways to get traffic worked like this: First, come up with a list of keywords that people search, but that competitors don’t use in their sites; next, build pages that speak to the audience that searches for these keywords; and finally, use article directories to promote those pages.

A Different Plan: They Own Content, You Rent Visitors

The content factories have a different plan in mind: you can create all the landing pages you want, but they don’t intend for you to rank well for any of those target keywords: they’ll create their own junk content (for less than those article-directory articles cost), and then sell visitors one at a time through ads.

This is a terrible idea. It outsources a customer’s first encounter with a product to a company with a vested interest in making that interaction frustrating, but not infuriating (it bas to be frustrating because, as Patrick MacKenzie points out, the content must be less useful than the ads. If it’s infuriating, visitors will just leave. But that’s a low standard.)

A Word on Pricing SEO Services (and How People Get SEO Jobs)

This doesn’t just make the web a worse place, though: it also destroys the business model of small, independent SEO companies—and it makes it harder for new people to break into the industry.

The way I started doing SEO was simple: I answered an ad on Craigslist. The ad was looking for someone who could write simple articles, fast. And I can do that.

The good news about learning SEO this way is that I got to start with the very basic stuff: a refresher course on HTML, some practice writing useful information on pretty much any topic, an understanding of where people started their searches (and what steps they took next), and a peek into how keyword lists were generated.

I wouldn’t have gotten into this business if that opportunity hadn’t been available, but I can do the math: even as a part-time, off-site intern, my cost was at least 50% higher than Demand Media. And that’s not counting the value of the experience, which is obviously far higher.

Under the Demand Media model there’s no need to learn about SEO. Why bother, when the articles can be churned out so cheaply? They have their own algorithms to determine which keywords are useful, and their own formulae for crafting the right headline.

I’m not the only person who got a job that way, and I don’t work for the only company that started SEO as a sideline before it became a major production. For these companies—web designers or web developers who use SEO as a value-added service—it won’t be feasible to compete with content factories. The end result is not just less income for those designers and developers, but that it won’t make sense for them to optimize their customers’ sites.

What Google Can Do About Content Factories

The only thing Google can do here is apply a selective site-by-site penalty for junk content. This will hit article directories just as hard as these other sites, and it will cut into Google’s revenue (since these sites often use Google Adsense to make money).

The heuristic is not difficult, here: if a site has many links, but few links per page, and people tend to click on an ad once they get to the site, it’s clearly there just to take organic Google traffic and turn it into paid Google traffic. That might be nice for Google’s revenues, but it’s bad for their customers. (If Google doesn’t penalize them, maybe Bing will.)

Two Alternatives: Content Factories, but Benign; Or…

If we do need to live with content factories, I can see two ways it might be okay. First, content factories that handle writing articles based on someone else’s keyword list and specifications: these would offer tiered pricing based on quality and keyword lists, and would send organic traffic rather than ad traffic. The great thing about this model is that they could keep track of individual contributors, and forward the promising ones on to the companies that paid for their articles. It adds another kink to the SEO recruiting pipeline, but keeps it intact.

Second, we can get used to the idea that there’s a lot of junk content out there—more very day. Instead of creating lots of lower-quality content, SEOs can make a smaller number of very worthwhile pages, and pay for traffic to them. At the same time, searchers will learn to use broad terms, and then navigate from the site they land on (i.e. searching for “401K” instead of How to Determine if Your 401k is Safe).

In the latter case, we may see a bigger premium for more experienced copywriters with an SEO background. After all, they’ll be writing the landing pages that everyone sees, instead of pages seen only by people who search for a very narrow term. And when every visitor costs money, every improvement in copy translates directly into a higher return on a big investment.

So even the end of “free traffic” from long-tail terms could be good news.

SEO Hater’s P.S: If you think I’m alone on this, please note that programmers are doing it, too. It’s only a matter of time before Demand Media for apps appears. In fact, back in April I talked to a VC about something that boils down to “Demand Media for Apps.” Fortunately, we both had better things to do than to make that happen.

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I’m currently the Co-Founder and CEO of a startup providing equity research and M&A due diligence to investors analyzing online businesses.

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