When Contently launched out of TechStars startup accelerator in 2011, content farms were quickly becoming the bane of content producers everywhere. Gumming up search engines with low-quality, SEO-optimized linkbait and shoddy content marketing models, these farms were in the process of jumping the shark.
Today, thanks to continuing changes in publishing business models and digital advertising, content marketing and native advertising are the buzz du jour. Newsrooms are shrinking, and as we saw recently, freelance marketplaces grown rapidly. As these trends slowly re-shape the publishing industry, New York City-based Contently finds itself well-positioned to take advantage of the new era of brand publishing.
Over the last two years, Contently has been busy building a marketplace where brands and advertisers can go to connect with freelancers and journalists to commission work on their behalf. The idea is to allow brands and marketers to build content strategies optimized for a new generation of digital-savvy readers, doing so around content — whether it be a blog post, a white paper or a sponsored article — written by real, accredited journalists.
In turn, Contently is looking to fight low-quality, hastily-produced linkbait by offering a marketplace for journalists and content producers that compensates them for their work at a much higher rate than will typically be found on the eLances and oDesks of the world. Whereas a writer may be paid $5 to $50 for a blog post listing on eLance, Contently co-founder and Chief Creative Officer Shane Snow says that writers can expect to be paid $275/blog on average on the platform, and can expect to find regular work in the $500 to $1,000 price range.
To turn this model into a real business, rather than offering the traditional revenue share with writers in which the platform takes a cut of the price publishers set, Contently licenses the software behind its marketplace to those publishers — along with brands, marketers and agencies. In doing so, Contently’s customers get access to its network of freelancers and journalists, along with workflow and payment tools, and can hire any content producer of their choosing on a project-by-project basis.
These subscription fees for publishers allow them access to Contently’s talent and payment solutions, with pricing based on a sliding scale depending on how deep they want to go. This runs from basic access all the way up to plans that include project management software, which he describes as akin to “Salesforce for publishing,” and integrations with content management systems like WordPress and Tumblr.
This costs anywhere from $3,000 to $25,000/month and up for larger companies looking for enterprise-grade content marketing support and on top of that, Contently takes a 15 percent “agent’s fee” from journalists when they’re hired for projects. This means that, if Contently introduces a writer to a client, Snow says, that the startup guarantees they will be paid immediately without the paperwork or net-60 day-style terms and ensure content producers are vetted and treat their writer well.
Today, Contently has close to 30,000 journalists on its platform, about 5,000 of which are vetted as “experienced professionals” from major publications and are willing to freelance. The remainder, the CCO says, are on the site to take advantage of its free portfolio tools or are students working to get clips until they qualify for real work.
The real goal, he continues, is to empower freelancers and independent journalists by removing the headache of managing all of the work that doesn’t have anything to do with the actual craft. Over the last 18 months as the platform has become more robust, Contently has taken this to range from helping journalists with sales and marketing their own personal brands, getting credit for their work and their name ranked on Google to receiving payments and helping them navigate freelance tax returns.
By offering real, accredited journalists working at top publications who are willing to freelance and are well compensated for the work they produce, Contently has been able to attract a growing roster of big brands. The startup now has about 50 enterprise clients who are signed up via its 6 to 12 month contracts, which he boasts “almost always renew,” and clients include Coke, Pepsi, General Electric, Federated Media, American Express and others.
Having raised $2 million early on and with its model producing 400 percent revenue growth in 2013 and an expected $20 million in revenue by this fall, Snow says that the company has been actively eschewing the fundraising process. But venture capitalists are excited by content marketing models, Snow says, and the money pouring into the space continues to increase: “For the last year, we’ve had investors cold calling us saying they’re actively looking to invest in content marketing.”
While the company has held off on raising, Snow sees an arms race looming. “Market pressure has basically showed that either we need to try to build a huge company now or go home.” Of course, Contently is hardly the only beneficiary of the fevered interest in content marketing, and is itself the beneficiary of the growing popularity and success of sponsored content and stories on sites like Buzzfeed.
Buzzfeed, which creates sponsored versions of its posts and listicles for advertisers and marketers, has said that it expects to see revenue increase to $120 million in 2014, according to BusinessWeek.
With all of these trends converging around it, Contently today announced that it has raised $9 million in Series B financing from investors that include Sigma Prime, Sigma West, Lightbank, Contour Ventures and David Lerner. The new funding brings its total raised to $11 million and will be put to work expanding its enterprise tools for advertisers and ensuring that journalists have the types of tools that can help them survive and even thrive during the ups-and-downs of the publishing industry’s ongoing evolution.