Friday, April 07, 2006

Why Does Content Pay

I believe great content is one of the least expensive ways to aggregate an audience. There are three main types of traffic on the internet that are outside of purchasing clicks or advertising. These are supplied by search engines, links from other sites to yours, and type-in traffic where someone knows your domain and types it in.

Search engines are improving. SEO tricks work less and less. Search engines like great content that answer questions. Create great content and get more search engine love. Vote #1 for content.

People link to things that are interesting and provide comments. People read one piece and follow the links to see the reference. The better the content, the more other people will reference your content on their sites and blogs. Vote #2 for content.

Now that you have a sense of how traffic flows to sites - albeit a simple one, here's a simple analysis of why it pays to create content to reach a targeted audience.

Most content sites are supported with advertisements. Advertisers want to reach the audience the content creator has aggregated. So in this sense, the publisher and advertiser are competing for the same target customer. However, the publisher has to pay less for each user than the advertiser, or the publisher would never make any money. Assuming the content site is profitable, this means the advertiser is willing to pay the content creator a fee that supports the content creation. On top of this fee, there is often a middle man like Google Adsense that is taking a brokerage fee for bringing the advertiser to the publisher. Google's cut is roughly 30%.

If it's profitable for the content creator, profitable for the advertiser, and the middle man is taking 30% in the form of a transaction fee. Why doesn't the advertiser invest in content and save at least 30%.

Hubpages is creating a place where anyone can create content free. Create a piece that supports your business.

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