Posts Tagged ‘content mills’

What the Elance-oDesk Merger Means for Freelance Writers

Posted in Blog on January 14th, 2014 by Carol Tice – 89 Comments

Let's look at the Elance-oDesk merger

You may have missed it in the holiday crush, but a big deal went down right at the end of the year: oDesk announced it is merging with Elance.

Yes, I spend most of my time discouraging writers from hanging around these sort of race-to-the-bottom, bid-site platforms. But they’re mighty popular — 8 million freelancers are registered between the two merger partners — and their plethora of dirt-cheap gigs has posed a challenge to freelance writers striving to earn more than mad money.

I wanted to stop and talk about the Elance-oDesk marriage, because it signals some important changes coming down the pike, whether you use bid sites or not.

Why the merger happened

While the two companies have mouthed the usual reasons why mergers happen –  “We think we can do a better job this way,” the press release says, for both freelancers and the companies that hire them.

In reality, there are several big reasons why mergers usually happen:

  1. One of the companies is or will soon be out of money
  2. One or both of the companies is losing the competitive/branding war
  3. One of the companies covets the technology, executive brainpower and/or client list of the other
  4. One of the founding teams wants to cash out
  5. The market opportunity is shrinking and combining forces increases odds of surviving a shakeout

Any of 1-4 might be in play here — the companies are privately held, so their financial details aren’t public knowledge. oDesk’s CEO is the one stepping down, so that tells you who the weak sister is in this deal.

The one new fact they released: The two companies have $750 million in combined annual billings. That’s not what they make, but the total freelancers billed on Elance and oDesk combined in 2013.

I’m sure you can do that math: With 8 million freelancers, that means the average freelancer on Elance/oDesk makes under $100 a year. Before the platforms take their cut. Hopefully, if you ever thought these platforms were a place to make a living, you’re now cured.

But I digress. Let me draw your attention to #5 there. Because that’s the one that is a sure thing here.

A shrinking marketplace

It’s not a fluke that Elance and oDesk decided to combine forces. This merger is evidence of a sector implosion that’s happening for two reasons.

1) Junk content lost the Internet

It sucked, no one read it, and then Google did several updates to penalize keyword-stuffing content, culminating in last fall’s final blow: the Hummingbird update.

Now that cheapie content can’t get sites traffic, demand is plummeting for $5 articles. That’s why the call for quality content is skyrocketing, while demand for “link building” type articles sinks, as Google recently reported in this chart:

That’s bad news for bid sites, where scads of junk articles were commissioned at appalling rates. Let’s face it, startup websites commissioning keyword junk made up the bulk of the writing gig listings on places like oDesk, and were what fueled the growth of these marketplaces. Now, that fuel is vanishing.

2) The downturn ended

While demand for SEO articles is shrinking, my bet is that supply is, too. While many writers still gripe to me about “these tough economic times,” in fact, the U.S. economic downturn ended a couple-three years ago (depends on which economist you ask). The unemployment rate today is dead even with pre-recession late 2008.

Know what that means? Lots of freelance writers who turned to places like Elance out of desperation are gone. They’ve gotten jobs again.

There were a few years there where we had both huge demand for cheap SEO-focused writing, and a huge pool of writers hard-up enough to do it. Now, that moment has passed.

What’s next

I don’t have a crystal ball to tell you exactly what Elance and oDesk will do in the coming months as they integrate their merger and put the two companies together.

OK, I kind of do, because I spent 20+ years covering mergers and acquisitions.

The outcomes of big, high-profile mergers like these tend to follow a few pretty well-worn paths. Here’s what you will likely see:

Confusion and fear

Elance and oDesk freelancers seemed not to buy the happy talk. Both companies were flooded with hate mail from their member freelancers the minute the deal was announced.

The first comment on oDesk’s community site seems to sum it up: “This announcement fills me with dread.”

The initial phase of a merger is always marked by chaos and the wastage of huge amounts of time on speculation and gossip. Freelancers have been told everything will continue as it has been, with the two sites operating independently as before.

But everybody knows if that were true, there wouldn’t be a point to merging. This makes everyone anxious about how the merger will really shake out.

This feeling usually lasts a few months, and then everyone gets lulled into thinking maybe the status quo will maintain. As soon as writers start to relax, it’ll be time for the next phase.

Change

It always takes merging companies a few months to get the lay of the land, analyze the assets, assess the weak spots, and decide on a plan of action. Then, they start changing things.

There must be changes because the point of any merger is to create a larger, more efficient company with higher profits, so that the owners get even richer.

If the two companies were to go on as before, there would be no efficiencies realized and no additional profit. So steps will be taken to streamline the company.

Usually, one company’s technology and systems will be chosen and their team will run both brands, while the other team is laid off to save money. That will leave freelancers at one of the sites to learn new systems. Sooner or later, there will only be one headquarters. Cuts or changes in editorial staff are likely as well.

Often, in the end, they will loot one brand for its technology or client list, gut it, and then close it down to give the winning brand more combined power. Could happen eventually with oDesk.

It’s also more efficient to have one set of policies for how to operate — and that’s what’s got a lot of freelancers worried. Elance has a floor of $3 an hour, while oDesk has none, to name just one of their differences. Which philosophy will prevail?

My money’s on Elance’s, given the trend away from super-low paying gigs. Whichever way it goes, freelancers at one of the platforms will be unhappy to see their boat rocked. Employers may likewise drift away if they dislike the new regime.

One final point: Many mergers fail. If they can’t find efficiencies, Elance could decide to try to sell off oDesk, triggering another round of uncertainty and change. It happens.

More mergers

In the wake of this merger, other players in the cheap-hiring online space will be compelled to merge to compete with the combined Elance-oDesk behemoth.

When two of the biggest players join forces to form an 800-pound gorilla (so big it requires a federal review to ensure it’s not creating a monopoly), that sets off a consolidation cycle among smaller players that must scramble to fortify their resources and stay competitive in this new landscape.

With rapidly shrinking demand for junk content, expect to see some cheap-hiring bid sites go bust and disappear. This will be a smaller sector by year-end.

Takeaways: If you rely on any bidding sites as a major source of leads, beware. Changes are coming, and despite the press release happy-talk, they may not benefit you.

Diversify your sources of clients, ideally by prospecting to find your own clients and cut out the middleman, not by signing up for more bid sites or content mills. As Demand Studios’ parent Demand Media’s implosion shows, that sector is facing many of the same challenges as the bidding sites.

If you are earning pro rates and staying off these sites, rejoice. The coming year will be one of increasing opportunity for more sophisticated gigs. Sharpen your skills, up your marketing, and get ready for the boom.

What’s your reaction to the Elance-oDesk merger? Leave a comment and give us your own trend forecast.

Content Mill Founder Quits — Will Freelance Writers Follow?

Posted in Blog on October 28th, 2013 by Carol Tice – 93 Comments

A content mill founder heads off into the sunsetAre content mills going the way of the dinosaurs? There’s a lot of talk that one of the biggest and most successful mills, Demand Studios, may be slowly winding down.

Kicking off the most recent speculation about Demand’s fate is the fact that Richard Rosenblatt — founder and CEO of Demand parent company Demand Media — resigned abruptly last week.

If you write for mills, it may be hard to find a few spare minutes to learn about the behind-the-scenes business moves of one of the leading mills. But my advice is to pay attention.

Because Demand Studios is in trouble. And as goes Demand, so goes the rest of the content mills, including any other mills that you might write for.

Inside a content mill’s disintegration

Rosenblatt’s resignation seemed to take the company by surprise — they’ve hastily appointed a temporary CEO from the executive ranks while they do a search. Which indicates he likely up and left, rather than being forced out. Instigators of a coup would have had a new leader ready to go.

So Rosenblatt has bailed. He’s on a beach with the millions he made in Demand’s $77 million initial public offering (IPO) back in early 2011.

It’s no big mystery why he’d want to move on. Since going public, Demand’s stock has gone nowhere but down, in tandem with the sinking fortunes of its content-mill business, which includes eHow. Traffic at its sites began to sink soon after the IPO, as Google implemented a series of changes aimed at blocking junk-content, SEO-focused sites like Demand’s.

Why should you care if investors are abandoning Demand’s stock? They’re doing that because the mill business model doesn’t work anymore, so they don’t believe the company’s stock will increase in value in future. Lower stock prices mean Demand is worth less and can’t borrow as much money — and likely, that means less available mill work for writers.

Stuffing tons of SEO articles onto a website and making affiliate ad cash off the viewers you drew was a business model that seemed to have great promise, for a brief time around 2009-10. Then Google got wise to how junk-content sites were ruining the usefulness of its search results, and took evasive action.

Now, this business model doesn’t work anymore, and it will never work again. Traffic will continue to sink at mill sites as search engines roll out initiatives to screen them out of results.

Internet users are increasingly hip to avoiding junk-site links they see in search, too. After you read five different eHow posts and none of them clearly or accurately explain how to do the thing you searched about (like I have), you don’t come back.

Demand has responded to its shrinking mill audience by diversifying into other business types. It’s bought e-commerce marketplace Society6 and online-learning site CreativeBug.

They’re taking their IPO money and using it to buy into other businesses that work. They’re not using their cash to expand their content mill empire, because the sun is setting on it.

Follow the money…

Demand Studios has never been a big moneymaker — all the profit was always in the domain-name side of the business. Despite the pittance they paid writers, Demand could never figure out how to make a profit off your back.

In the most recent quarter, they squeaked out just over $1 million in profit on $97 million in revenue. They could get a better profit margin running a grocery store, which is one of the most notoriously low-margin sectors in all of retailing.

Pretty sad for a company that once boasted it would be bigger than the New York Times (and whose stock value, briefly, was larger than the venerable daily).

The company said that despite Rosenblatt’s departure, it is moving forward to split eNom off of its content-farm business and sell it off separately. Why? Because eNom is a valuable, profitable business. Being shackled to a content mill is dragging down its value.

Once eNom is spun out on its own, what will happen to the content farm side? My money is on its getting sold off for a pittance, scaled back dramatically, or shut down.

A key indicator: This week Demand laid off its entire research and development unit. Translation: there are no new twists or products or ideas coming down the pike to save the content mill.

Other surviving mass-content sites are casting about for new business models that might be profitable. A notable example is About.com, where the model is shifting to sponsorship as executives scramble for income.

What’s your game plan?

Given the declining fortunes of content mills, the question is — what will mill writers do?

Here’s hoping you’ll follow the CEO of Demand out the content-mill door. And not to sign up with some other content mill. (Though most other mills are privately held, it’s safe to assume their fortunes are in similar decline.)

If you rely on content mills for revenue, know that this is a shrinking opportunity built on shifting sands. Yes, new mills spring up all the time, but few achieve critical mass and survive. You can expect fewer mill assignments and less pay in the future. Debating whether mill X is better for writers than mill Y, or complaining about mill pay rates is a waste of your time.

Mills were never meant to be anyone’s full-time income, a fact mill owners were always the first to admit. If you’ve made the mistake of counting on them to pay your bills, now’s the time to change course and start marketing your writing to find your own clients.

Do you think content mills will survive? Leave a comment and share your reaction to Demand’s decline.

 

 

Why Freelance Writers Should Stop Bitching About Crappy Pay

Posted in Blog on October 9th, 2013 by Carol Tice – 65 Comments

Complaining freelance writerBy Linda Formichelli

I keep reading posts in writing forums where someone will say, “X company wants to pay $15 for a 750-word blog post. Why do they think that’s a good price?”

Or “This content mill thinks it can get away with paying $10 per article…why, why, why?”

Cue outraged comments from dozens of writers who spend their time contemplating and bemoaning the state of the writing industry.

It Doesn’t Matter

The thing  to remember is, these conversations get you nowhere as a writer. Frankly, it doesn’t MATTER why the low-ballers think they can get away with it.

Maybe they’re knowingly taking advantage of writers. Maybe they don’t know how to run a business. Maybe they think it’s fine because, hey, they’re getting lots of applications from writing hopefuls, right?

Who cares?

All that should matter to you is that you spend all of your precious time engaged in activities that will bring in well-paying work.

And if you’re spending your time complaining and ruminating to your friends and on writing forums, that means you’re not going after top-paying gigs.

It’s Pointless

Some writers craft angry responses to businesses seeking out writers on Craigslist or oDesk, proudly claiming they would never take on work with such crappy pay, and here’s why.

We call that “tilting at windmills.” You may momentarily piss off one of the low-pay culprits, but it’s not like they’re going to say, “Oh thank you, writer, I now see the error of my ways. From now on, instead of paying $15 for a 1,000-word article, I’ll pay the much more acceptable rate of $300.”

These crappy clients are not going to change their rates, especially when hordes of writers are banging down their doors to accept them. So you may as well focus your efforts on finding well-paying work.

It’s Better for YOU

And consider this: The more writers who go after the lowball jobs, the more high-paying work is left for you.

The Craigslist ads, bidding sites, and content mills are not meant for writers of your caliber. So let the dabblers fight over the scraps while you go after the filet mignon of assignments.

I don’t ever like to see writers falling into the low-pay trap, but they’re doing it in droves — so you may as well see the positive in the situation.

Pros Don’t Bother

To an established pro who’s used to making big bucks from her writing, these content mills, bidding sites, and bottom-feeder clients are not even on the radar. They don’t matter. They may as well not exist.

Pro writers complaining about low-pay gigs is like top-rated chefs complaining about the crappy pay at McDonald’s. You can bet your burger the top chef at a four-star restaurant doesn’t know or care about how much the fry cook jobs in the local papers are paying. Because he’s not looking there.

Those low-paying gigs aren’t going away any time soon. Take the time you would have spent kvetching about them, and use it to bring in gigs from top clients.

Have you moved beyond venting to action? Leave a comment and share how you’re moving forward.

Linda FormichelliLinda Formichelli has written for close to 150 magazines since 1997, including Redbook, USA Weekend, Writer’s Digest, Inc., and Fitness. She also runs the Renegade Writer Blog. Tomorrow, Linda launches her e-book Write Your Way Out of the Rat Race…And Step Into a Career You Love with a super-low introductory offer! 

 

How I Scored Great Clients Off My Low Paid Content Mill Gig

Posted in Blog on October 2nd, 2013 by Editor – 47 Comments

Freelance writers need stepping stonesBy Angie Mansfield

We all know how Carol feels about freelance writing content mills, and I absolutely agree with her.

They’re not a way to make a good living.

But can you ever make a mill job work for you? I did.

Here’s how.

Find the “right” mill

I worked for Demand Studios years ago, but I escaped and never looked back.

Earlier this year, though, someone in the Freelance Writers Den asked a question about a mill called Media Shower. I’d never heard of it, so I decided to go through the application process, just to report back to the Den.

I found out that MS uses a guest blogging model to get its clients’ links all over the web. Writers get a bio with a link to their Google Plus profiles in order to establish Google Authorship. Pay is $25 per 500-word post.

I got accepted, then didn’t do anything with them for awhile because I didn’t want to get sucked into another mill. But the more I thought about it, the more I started to wonder: Could I make that bio work for me?

Use it as a marketing platform

Specifically, I wondered if I could turn my posts into a marketing tool for my freelancing business. By writing high-quality posts and including my G+ link, I’d give potential clients a showcase of my skills and a way to track me down. I made sure to link to my regular website from my Google profile, and then I waited.

It took a couple of months, but then the emails started trickling in. One day, I even got three emails, all from different clients who’d read my MS posts on websites they visited.

Those posts turned out to be a decent marketing tool. They landed me two ongoing gigs (both for blog ghostwriting), along with a special request to write an article for the digital edition of Business Review Australia.

Not a bad return for my experiment. And I got paid for marketing my services!

Learn from it

I should make a disclaimer here: I still do not recommend writing for content mills. At all. $25/post works out to about $25 an hour (you don’t get to pick your topics at MS, so you’ll have to do some research). As Carol has mentioned, that’s not a livable wage for a freelancer.

But if you’re going to write for a mill anyway, here are a few lessons I’ve learned:

  • Pick a mill that gives you a byline, and try to stick with mills that give readers a way to find you directly.
  • Always do high-quality work. You never know who’s reading those quick, piecemeal posts.
  • Keep marketing to real clients. Your goal should be to move up and not have to use the mill anymore.

Content mills aren’t a viable long-term option for freelancers. But with a little strategy, I managed to turn a mill gig into a decent marketing tool.

Angie Mansfield is a freelance blogger who’s thrilled that “Freelance Blogger” is a real title these days. She writes mostly about business for her “day job” and helps fellow geeks (and freelancers) de-stress their lives on her blog, TranquiliGeek.