Demand Media Traffic Takes A Hammering?

Contemplating an investment in Demand Media? Got the jitters about the effect Google might have on the stock price? Your concerns might be justified.

Whilst this could well be a false alarm, it will give you at least some idea of why there might be a concern.

PE Hub spotted that traffic as reported by Quantcast to the Demand Media group had taken a dive.
There is also extensive commentary about this on Slate.

For the record, I took all these screenshots today…

Quantcast data is normally highly reliable for Quantified publishers, and I have never seen a drop like this that wasn’t due to a real decrease… or someone accidentally or deliberately leaving the code off a page.

Finding this data on the Quantcast site isn’t as easy as it used to be, so I am not linking to it directly.

Demand Media Group Traffic

Demand Media Group 1 month daily

These stats certainly look like they were hammered in some way, lets look at individual sites.

Ehow.com

Ehow.com is by far Demand Media’s most popular web property, so is possibly the most important indicator.

Ehow.com traffic 1 month dailyThose stats suggest that Quantcast code was removed from Ehow.com sometime around July 27th-28th 2010, but they are still showing as a Quantified publisher. That seems normal to me… they are not going to pull stats totally if for some reason a developer slipped up and removed stats by accident.

We should look at Alexa data for Ehow.com

Ehow.com Alexa trafficThat looks healthy… though Alexa have been known to fudge numbers a little.

But is that all the story?

Lets look at some more sites.

Answerbag.com

Answerbag.com stats 6 monthsThat looks possibly a little drop in traffic around the “MayDay” update but nothing too serious, or just seasonal… websites get less traffic in the Summer… and then there was the World Cup.

Cracked.com

Cracked serves a younger demographic, so you would expect the traffic to drop more in the summer.

Cracked.com traffic 6 monthIf anything that looks like some growth during the summer even just looking at US traffic. Very well positioned for the colder seasons. I wouldn’t look on Cracked as a site that depends on search traffic – they have tons of social media & viral traffic due to the nature of the content.

So far all signs are rosey.

Livestrong.com

Livestrong.com Quantcast 3 monthsThis one looks like a traffic hit, or a change in which pages are being measured. If the code was taken off some of the pages it would look just like this too.

Lets look at Alexa for Livestrong.com

Livestrong.com Alexa dataThat looks relatively healthy though with some seasonal reduction, maybe less promotion or content being produced after July but there is a decline.

Demand Media SEO Risks

Danny covered the SEO risks with Demand Media admirably when the IPO was first announced.

I think one of the biggest risks might be their syndicated content strategy, even though that in some ways gives them some stability on traffic sources.

More On Demand Media

I found this video quite insightful, as you get to learn the internal workings and some of the thoughts leading up to the IPO.

All Things D (the WSJ) have some problems with their video embeds looking really sucky (320×181) as standard to encourage you to click through and try to navigate their site, or maybe just a bug, so I hacked the embed code a little. Permalinks to videos (e.g. the permalink for this one) are all messed up as well which must be great for SEO.

Not a Start Page

I think the important aspect in this isn’t that a major change has happened… I don’t think it has, but that Demand Media don’t really own a “start page” in a similar way to Yahoo, MSN, AOL or Google might be looked at as the first page that an internet user would start their online session with. They don’t have any captive audience.

They also don’t own any real news destinations, though they do provide content to news destinations.

At this time I am not worried about the traffic decline being shown, and part of what I do is help large websites fix major problems… sometimes they listen to me, sometimes they don’t.

This does however highlight a need to either fully hide traffic data, or make it reliable. Demand Media is the first major IPO in recent times I can think of that is so tied to Google both for traffic and income for their long-term income.

In some ways it is the equivalent to Apple being tied to the health of Steve Jobs.

There can be big positive and negative gains almost overnight which may or may not be permanent.

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Comments

  1. says

    Andy, a few comments
    (a) I did the same exercise for eHow.com on Alexa but changed the trailing bit to 7 days from 30 days… Alexa’s cut off is the 6th of August, that’s 5 days ago and before the IPO.
    (b) Google Trends for websites (http://trends.google.com/websites?q=ehow.com&geo=all&date=mtd&sort=0) do not show any significant downturn yet globally.
    (c) Google Ad planner (Very important) shows growth https://www.google.com/adplanner/#siteSearch?identifier=ehow.com&geo=US&trait_type=1&lp=false

    Let see how things go by the end of the month though

    • says

      I wouldn’t generally trust Alexa as their numbers as mentioned can get fudged. A period a couple of years back they downgraded lots of webmaster related sites in an attempt to counteract how many webmasters as a percentage use some kind of toolbar.
      My Alexa at the time went from around 20K to 600K

      Demand Media have lots of content creators who are also webmasters, bloggers etc, so would benefit from the same “bonus” in numbers.

      I did look at a number of other sources, and tried to find someone with a Compete Pro account to see their US numbers… the free data is always out of date. I also looked at the Google data, but as I already had an Alexa screenshot it just seemed a little superfluous.

      For me the story is really that this can give investors the jitters, and that removal of the data doesn’t necessarily help. The data is out there, it might as well be totally transparent.

  2. says

    Hi Andy,

    I can’t agree more with you on the idea that the data needs to be more private or that the data be more reliable…

    I’m not a fan of Direct Media (ehow is horrible, though I do like trails) but this is a great post that makes some connections between the environmental/fundamental factors for possible stock purchases…

    Thanks for putting this together!

    Sincerely,
    Jay