Internet Advertising

Posted on January 13, 2010 by Ben Connard 

We hosted Thanksgiving for the first time.  I was in charge of carving the turkey.  Having very little experience, and not wanting to disappoint the in-laws, I did some Internet research.  I searched “How to carve a turkey” and predictably got almost 1 million hits.  I clicked a few until I found a professional looking video featuring a butcher demonstrating his method for carving a turkey.

Every time I clicked a link it was potentially worth money to the website as it increases traffic and allows them to charge advertisers, especially if I then click through an advertisement.  Therefore each query has a lifetime value based on the traffic it will generate and the value of the advertisements placed alongside the article.  Queries starting with “how to” and “best” are the most valuable, most likely because of their timelessness and specificity.  The method for carving a turkey is not changing and the articles provide a good place to advertise recipes and ingredients.

Companies are busy trying to monetize these terms.  Using algorithms, companies can determine what is being searched and cross reference with what advertisers are paying for the terms.  This allows the company to create an article around the search terms and calculate its lifetime value.  Essentially, companies know what consumers want and what it’s worth, they just need to create the product that fits these needs. 

One of the leaders in this field, Demand Media, has a well-devised system for this process.  The company’s goal is to create articles and videos to answer all questions consumers may have, from kayaking to cake decorating.  They post videos on YouTube and articles oneHow.com and other sites.  Competitors include About.comMahalo and Answers.com.  Like much internet content, the creation isn’t the problem; the difficult task is generating the revenue to make it profitable.  Amounts paid per click are estimated to be between $0.15 and $0.60.  It can take months for an article to generate $15.

The solution is quantity produced at a low cost.  Demand Media pays freelance writers and filmmakers $15 and $20 per production.  They pay editors, fact-checkers, and others a few dollars or less to finalize the product.  The method keeps costs low to Demand Media, but also encourages speed over quality.  A writer has to churn out more than an article an hour to make a decent wage.  And the amount of time spent fact checking at $1 per article is debatable. 

The first search result for “How to carve a turkey” was from eHow.com.  I clicked the link (this was before I had ever heard of Demand Media) and read the article.  The article was 9 steps and included a typo.  I didn’t find it very helpful- short on photos and description.  The video I ended up watching a few times was produced by the NY Times and the butcher was very articulate.  This is anecdotal evidence and I don’t know which took longer to create, but in my opinion the NY Times video was better.

This can be a fatal flaw for any company looking to profit through mass production with low quality standards.  Eventually consumers will catch on.  When an eHow.com article pops up, they’ll look to the next search result.  If your goal is to be the destination for answers, you better be sure your answers are right.  When we research a company, we want to know that it can produce a high-quality product or service so customers return.  I successfully carved the turkey thanks in large part to the video.

See “The Answer Factory” at Wired.com for a more in-depth look at Demand Media.