What does it say about Discovery that it was willing to take an 82% loss to get rid of “How Stuff Works”?
After all, the site is 327th on Alexa, which means it is heavily trafficked. But, as Ad Age comments, “the right mix of traffic, ad revenue and expenses ultimately proved elusive. ”
And here’s why. When Discovery bought “How Stuff Works in 2007 (for $250 million) it was one of a number of highly popular “content farms” that hired low-paid freelance writers to generate content on subjects that were popular with search engines. Another site like that was EHow.com, Demand Media’s flagship site. Back in the day when advertisers bought on page views, the formula content farms used for generating page views– superficial posts on common subjects — worked really well and attracted advertisers.
However, when consumers clicked on these articles and found them largely without value — and sometimes even copied from site to site — the complaints went to Google, the search engine that got them to these low quality sites. So Google had to respond for its own brand reputation, and in 2011 it released what is known as the “Panda” algorithm — a method for supposedly cutting through the low quality content on the internet:
As “pure webspam” has decreased over time, attention has shifted instead to “content farms,” which are sites with shallow or low-quality content. In 2010, we launched two major algorithmic changes focused on low-quality sites. Nonetheless, we hear the feedback from the web loud and clear: people are asking for even stronger action on content farms and sites that consist primarily of spammy or low-quality content.
This algorithm immediately “demoted” sites like “How Stuff Works” and EHow and caused them to lose readers, and then of course advertisers.So now it is 2014, and advertisers are buying much more targeted audiences, and are buying on different metrics, such as engagement and viewability. This creates even more of a strain for sites that aren’t positioned as premium.
We don’t have visibility into the specific metrics for “HowStuffWorks,” and we’re not trying to pass judgment on their content generation practices, which we believe were generally superior to the other members of the content farm genre, but the recent sale for $45 million emphasizes the need for any publisher to provide quality content at all times to justify the trust of brands and advertisers.
In the specific case of ZEDO’s network, we screen carefully to make sure we have premium publishers who publish quality content with which brands wish to be associated.