AOL Meeting Market Needs as On-Demand Content Producers

I think this is a great move for AOL. There is definetly an unmet market need for good content producers/providers. The general public is board, they need something new. Although you may think of AOL as an ISP, they have been in the premiem content business for a long time, so I think that this is a great expansion of one of their core competencies.

Here is the article from Wired.com:

AOL Becoming Automated, On-Demand Content Factory

By Ryan Singel November 30, 2009  |  2:51 pm  |  Categories: Advertising, Commerce, Crowdsourcing

AOL’s new chief plans to combine algorithms, marketing partnerships and cheap freelance writers in order to turn the stale web property into a vibrant online content factory pumping out stories to fit the zeitgeist.

Tim Armstrong, a former Google ad executive, wants AOL to create automated content for the people. The idea is to mine search data and traffic patterns to find the latest hot searches and then automatically commission matching stories from a bevy of freelancers at Seed.com, according to the Wall Street Journal.

The point is to drive inefficiency and editorial costs out of creating news and entertainment, while simultaneously drawing in viewers and thus advertisers. AOL, which has been consistently losing users and revenue, is being spun off from Time Warner back into a standalone company in December. Earlier this month it announced it would lay off about 2,500 employees.

But that leaves AOL with a thriving business of online, niche media sites, including PoliticsDaily, Love.com and popular blogs like Engadget and Joystiq. AOL is trying to become an online content empire, with many sites being standalone brands that readers don’t associate at all with AOL.

With this new system, Armstrong is betting that the future of media, and thus AOL, involves turning editorial functions over to algorithms and writing assignments to freelancers willing to work for pennies a word, according to WSJ.

AOL says its new system determined that the most popular topic on the Web last Tuesday was “crib recalls,” following news of a massive recall by Stork Craft Manufacturing of Canada. AOL had only one story on its sites on the recall. But, if the new system had been live, editors would have geared up to supply stories on the subject from a number of angles, the company says….

AOL says it will pay freelancers based on how much its technology predicts marketers will pay to advertise next to their articles or videos. It says that will range from nothing up front, with a promise to share ad revenues the article generates, to more than $100 per item.

But the company will keep lots of high-profile professional journalists, including writers who made their names at newspapers like the New York Times and magazines such as Portfolio.

Additionally, AOL is planning to let advertisers commission stories for its ads to run around. For instance, a videogame store could ask AOL to write a story about how online games make users more social.

AOL isn’t the first to attempt the mass production of content, based on algorithms. Demand Media (profiled in Wired magazine) largely pioneered the idea of pumping out cheap, niche content of marginal quality based on calculations of how many people would search to find a video on how to make say, kobocha french fries. Armstrong is a large investor in the company.

AOL’s test is whether its algorithm, not editor-driven, system can create high-enough-quality content to please brand-name advertisers, who still pay a premium to have their ads paired with professional and respected online content. The internet is already filled with unresearched and uninformative ‘articles’ intended to draw readers through online searches, but the payoff in that game is thin for everyone except Google.

Correction: This story initially reported that Armstrong was an investor in Demand Media, but Demand says this is not the case.

Posted via email from MEDIA CHECK