Discovery Communications bought the U.S. portion of how-to site HowStuffWorks for $250 million last fall, and as CEO David Zaslav tells the NYTimes, the site is the “cornerstone” of Discovery’s digital media strategy.
Discovery’s digital division is relatively small and unprofitable. How to change that? A $150 CPM for online advertising can’t hurt. But to earn that, HowStuffWorks CEO Jeff Arnold is trying something that competitors Wikipedia and even About.com (NYT) wouldn’t do:
In addition, Mr. Arnold has started pitching custom content deals. He imagines teaming up with a hardware store chain, writing articles about power tools, adding links to tool suppliers, and creating custom versions of the articles for the advertiser’s own Web site. He estimates HowStuffWorks could earn $150 per thousand views for custom content.
Content created by and for advertisers is nothing new to the magazine publishing business, but typically a hard line is drawn between the content that an advertiser creates, or has a hand in creating (advertorial), and the content created on the other side of the Chinese wall by writers and editors (editorial).
So, the question is how HowStuffWorks deals with the content paying them $150 CPM vs. that that is paying them much, much less. And a further question: Will consumers tolerate advertorial on a how-to site?
In a sense, it’s not too different than the custom content HowStuffWorks will create for Discovery TV programming, such as “Shark Week,” to take advantage of TV promotion.
It’s just one of a few ways Discovery is planning to grow its online business. In addition, Arnold also tells the Times the site has grown to 15 million unique visitors in May from 10.5 milion monthly uniques in December thanks to… search engine optimization! Though the site still trails Wikipedia in most search results.
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