Demand CEO Richard Rosenblatt Talks Panda
Last week, after he turned in better-than-expected earnings and tried to explain to a worried Wall Street how the search algorithm changes at Google, called Panda, were significant but not devastating to his business, BoomTown had a short phone interview with Demand Media CEO Richard Rosenblatt.
To ask even more questions about Panda! Grrrrr…
Actually, Rosenblatt was as cordial as ever about what is a hair-pullingly critical issue for his newly public company, which has really been under investor and other scrutiny from the get-go about the way it handles content.
Which is to say very much differently than traditional media companies had done in the past, with an eye on how to optimize traffic and advertising revenue by using tech to know exactly how much each piece of content online is actually worth and how much it should cost.
Them’s been fighting words for a while, with accusations by detractors of Demand’s system that it is little more than a “content farm,” producing poor quality fare.
Rosenblatt has battled that charge all the way through a lucrative IPO, but the company definitely got caught in the Panda maelstrom, as Google has tried to cull out bad results (and make itself look better, it must be said).
This has put Demand in an awkward position–trying to minimize the damage, real and perceived, created by the changes, and also making sure Google does not become even more aggressive by tut-tutting those changes.
It’s a delicate dance for Rosenblatt, as you will see from my handful of questions (especially since Demand’s stock has been badly hit):
Q: What were you trying to communicate in the call, especially since investors seemed very focused on Panda?
A: I was trying in the simplest way to explain the way we figure the relationship of how much traffic to ROI (return on investment) and RPM (revenue per 1,000 impressions).
I think the best way to assuage the worries is to just keep on growing our business and traffic.
What I also wanted to show was that third-party data sources should not be relied on.
We did get affected, for sure. But I was not just being optimistic, we wanted to use that to really understand what we can do better.
We really need these kind of signals to shake things up.
Explain what you are doing to improve quality–does that mean longer articles or paying more for content to get better stuff?
A: There are some topics that do not deserve more than 500 words, and some deserve more.
But we’re not going to make content that is expensive just because, except maybe for marketing purposes. It has to make financial sense at the scale of our current business.
We would spend more on a post on “How to Build a Deck,” for example, if Home Depot were interested in sponsoring that content.
Q: Given Google’s shift in its algorithm, are you shifting your distribution, such as toward social and mobile?
A: If you look at where trends are going, that’s where we are going to be.
Everything is shifting quickly to mobile and social and we will shift in the same way.
It used to be there were not a lot of places to make content for, and now we have a lot more choices.
If you are out there with our data and our assets, you change as the market changes.
Q: How are you changing the continued perception that Demand is a content farm?
A: I don’t think anyone has defined what a content farm is and I am not sure what it means either.
We obviously don’t think we are a content farm and I am not sure we can counter every impact if some people think we are.
The only way we are going to do that is continued growth in revenue and showing that we are doing this for the longterm.