Corporate media has been a booming business in recent years. Now it also represents an attractive investment, at least in the opinion of venture capital firms that today are pumping a new round of funding into Contently, a New York company that connects freelance journalists with corporate media gigs.
The new round is worth $9 million, three times what Contently has raised in total over the past three years. It represents a vote of confidence from investors, and an indication that demand for content inside big corporations is not a fad, but rather represents a growing and sustainable business.
“This is a big one,” says Shane Snow, one of three co-founders. (He's the guy in the photo.) “We’re really committing to taking a big swing.”
Contently is still a small outfit, with only 30 employees. But it has a network of 30,000 freelancers who provide services to A-list clients like American Express, Philips, Ghirardelli, Coke and Pepsi. Contently says 40 of the Fortune 500 companies are clients of Conently. And the company is starting to get some attention, for example in this nice write-up by David Carr in the New York Times.
"Brands like GE, which are already telling stories, can benefit from Contently's access to a huge pool of journalistic talent. It’s like a supermarket for writers. You can pick and choose the writers who suit you the best," says Tomas Kellner, managing editor of GE Reports, an in-house publication at GE.
Snow is a graduate of Columbia University Graduate School of Journalism and writes for publications such as Wired and Fast Company. His own background as a freelance journalist helped him spot the opportunity that led to the creation of Contently in 2010.
All around him, Snow saw journalists getting laid off from newspapers and magazines. But at the same time, companies were looking for more and better content. Why not find a way to connect those two groups?
Thus Snow and two friends — Joe Coleman and David Goldberg — launched Contently. The original idea was to act as an agency for talent, hooking writers up with gigs and taking a 15% agency fee.
But Contently quickly recognized a bigger and better opportunity, which was to build a software platform to let corporations manage relationships with freelancers, keeping track of who has done what and making sure everyone gets paid on time.
“The big turning point came when we stopped thinking of ourselves as a marketplace and started thinking of ourselves as a software company,” Snow says.
Some companies just use Contently’s software to manage their own freelancers. They don’t hire freelancers from Contently’s marketplace at all.
Contently charges companies a subscription fee to use the software. Prices range from $3,000 to $25,000 a month, “and some big enterprise clients go higher than that,” Snow says.
Signal v. Noise
The good news for content providers, is that prices are actually going up in the corporate content market. That’s partly because so many companies are piling into the space that the only way to stand out is to create exceptional material, and that costs more.
Another implication is that as costs go up, big brands can gain an edge on smaller brands, since the big guys have deeper pockets. This perhaps explains why Contently focuses on big companies in the Fortune 1000 rather than on small businesses.
But even small shops will need to emphasize quality if they hope to stand out. For evidence, look at what’s happened lately to so-called content farms like Demand Media and Associated Content, which crank out low-cost, low-quality content and playing games with keywords in order to snag traffic.
Those guys boomed for a short time, but now they’ve been crushed.
“Content farms were built on a loophole,” Snow says. “The loophole was the state of the search engine. But that created a single point of failure, which was the Google algorithm.” When Google updated its algorithm in ways that gave preference to quality content, “that single point of failure really knocked those guys down.”
Another factor: “Those companies were exploiting talent, and I don’t think that’s sustainable for very long,” Snow says.
Small and medium-size businesses probably can’t afford Contently’s software, but they still can learn from the basic principles that underlie Contently’s success.
Think quality, not quantity. This may mean that you slow down and produce less media, but that’s okay. Do less stuff but make each one count. Blindly blasting out a bunch of junk is not going to get you anywhere, and may even set you back and hurt your brand. Take a deep breath. Think about what your brand stands for, and what you can do that will really have impact. Forget about SEO tricks. Don’t be a content farm.
Be ethical. Early on, Contently created a Content Marketing Code of Ethics. Snow argues that content marketers should adhere to standards that are even stricter than the one used by traditional journalists. Contently created rules for writers, clients, and Contently itself. They include the following: “Seek truth as fully as possible. Act independently. Seek to minimize harm. Be accountable.”
Tell good stories. Check out Contently’s corporate Manifesto, which begins with this sentence: “People don’t want `content’; they want compelling stories.” That's true, and what's more, people don’t just want stories; they need stories. Our brains are wired to crave them. Technology changes, but the elements of a great story have been the same for thousands of years. Whether you're writing a story on a stone tablet or a piece of parchment, or telling it aloud by a fire, or writing it on a blog -- it doesn't matter. Stories always have been the most powerful way to connect with other people.
Stop referring to what you do as “content.” Nobody ever woke up and said, Hey, I think I’ll go consume some content today, or, Wow, that was a great piece of content, I wonder if I can find any more content to consume. When you call your work content, you are subtly suggesting to yourself and to others that the work you do doesn’t have much value. You’re just sitting at an assembly line, cranking out word widgets, attaching some SEO widgets at the end, and then tossing it out onto the internet, hoping to catch traffic. That's not storytelling, and it's not smart marketing, either.
If you built your marketing operation around spammy low-value content and SEO-trickery, it’s time to change. That stuff might have worked at one time, but it is working less and less, and eventually it won’t work at all.
The bar has been raised, and deals like the venture funding that Contently is announcing today will push the bar even higher.