Sunday, August 23, 2009

DEO - The concept going forward

Everyone who is trying to grow traffic to their Internet site(s) knows the all important topic and battles of SEO: Search Engine Optimization. SEO has become a powerful practice area, and indeed an industry, that is characterized by perpetual improvement, tools, tips and tricks, information sharing and hoarding, and gaming the continually shifting algorithmic properties of the search engines, or maybe I should say search engine. Included in SEO is big concept stuff like content being "fresh, unique and relevant." Also included is a recognition of the negative controls, that is the effort to make sure you aren't blacklisted, delisted (or even relisted) as a spam site, mashup site, or poser site -- lest all your hard earned traffic disappear overnight. The complexities around this one effort, and often around one algorithm, are truly amazing and the free market in hyper-action.

However, looking out, I see DEO, Distribution Engine Optimization as the game of the future. More and more companies are recognizing that being a portal (a destination site) is a tough and expensive game for growth and return on effort (and for VC investment). I am seeing more and more companies start to make great and well distributed CONTENT, not traffic, their claim to fame.

In addition, the search engines of today are link-to-website, not content driven, and there is a large difference. Companies that deal in content first need to normalize that content, need to assure its quality and consistency and format and make it ready for mass distribution. Next they need to merchandize that content by applying their unique domain knowledge of what drives placement for that content, not on one site, but on 1000 sites. Next they need to complete that content by adding other pieces of content that are correlated, and put them in context (the context of a user of the content making a buying decision). Good Content DEO companies next want to add monetization to their content, so that it is attractive to publishers. I believe it is KEY to recognize that for many swaths of the online economy, monetizatioin fits better with CONTENT than it does with AUDIENCE. Finally, reporting to consituents will continue to be a differentiator.

I expect in 10 years there will be massive new market cap companies that are leaders in all these things, and these will be the new leaders of DEO.

2 comments:

  1. Jim, I agree with your sentiment. Just look at Hulu's distribution vision. At launch, and currently, Hulu is able to create high-quality, normalized content that can be seamlessly integrated into partner sites via the partner's own video player. The monetization vehicle (ads) is embedded directly into the content before distribution to ensure that Hulu gets their cut.

    Alternatively, this would seem to also be Reuter's online business model, though I am less familiar with their approach and monetization efforts.

    Any thoughts on content categories ripe for distribution?

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