Behind the scenes: How Demand Media partnered with USA Today
While Demand Media's critics decry its breakneck content production rate (the company's freelancers produce over 7,000 pieces of content daily) the company is finding friends in the main stream media.
Last week, USA Today announced it will be handing over an entire section to Demand Media. The newspaper's "Travel Tips" section will be entirely stocked with Demand content and Demand's algorithmically based technology will control what appears on the page.
On the surface, Demand's arrangement with USA Today came out of nowhere, but the deal was built on the foundation of a relationship that went back years.
In 2007, USA Today agreed to incorporate Pluck, a suite of social media tools, into its relaunched website. Pluck's feature set helped the newly redesigned USA Today incorporate comments, forums and blogs.
In March of 2008, Pluck was acquired by Demand Media for $75 million, giving the content creation company a direct relationship with USA Today.
"We've worked together for three years so there's a lot of trust between the organizations," says Dave Panos, Chief Marketing Officer at Demand and the former CEO and co-founder of Pluck. Not coincidentally, Panos also helped lead the charge for the USA Today deal.
Though Demand also has a partnership with the Atlanta Journal-Constitution where the company contributes a single weekly story to the AJC's travel section, so the USA Today deal involves deeper integration of Demand's technology and content.
Still Demand attributes the lessons learned from its other content deals as a reason that the USA Today agreement happened.
"We've been doing enough [partnerships] that we were ready to package it up for bigger customers," he says.
The deal was a delicate balance of making sure the new travel section fit well with Demand's current operational structure and talent pool, but didn't overlap with something USA Today was already doing. The company also made sure that the voice of the new travel section wouldn't require a drastic retooling of Demand's editorial guidelines.
Why did USA Today partner with Demand? USA Today's parent company, Gannett, has trimmed editorial staff (though not nearly as heavily as some of its counterparts). Mostly, however, the company was looking to attract the search engine referrals that Demand Media has refined into a science. Additionally, the content created for USA Today is exclusive.
"The economics are such that we can do it this way, as opposed to creating an article once and syndicating it 100 times," says Panos. "That's a much better value proposition."
Panos says the company has other content agreements signed and will be announcing them in the near future.
"I think its a continuation of trend that's been around for 100-plus years," he says. "People have been buying syndicated content forever."