Last week Federated Media split its legacy content marketing business from its programmatic, ad-buying business, which is now called sovrn. Whether this move spells an end for Federated Media or whether the content marketing arm will bloom again at LIN Media is unclear. But surely it marks the end of an era, so I thought we could reflect on the intellectual legacy that Federated Media left behind.
In 2010, when a handful of marketers were starting to look seriously at content marketing as a potential industry, and companies like Contently, Movable Media, and Kapost were drawing up their articles of incorporation, there were two brands that could be reliably pointed to as evidence of an emerging content marketing trend: Red Bull on the consumer side, and American Express Open Forum in B2B. While Red Bull had home-grown its publishing operations and was sincerely (and successfully) attempting to build a media company out of whole cloth, Amex Open Forum was launched by an innovative digital agency that had pitched and sold through a massive, multimillion-dollars budget to help transform the brand into the publisher of record for small-business content.
The firm was John Battellle's Federated Media. Federated began by representing bloggers, but transformed itself into the first of the new generation of content marketing agencies and platforms. Many of the content marketing firms that are now well into their Series B rounds (including ours) were at least partially nourished by leftovers from Federated’s plate, as it outsourced its clients’ voracious demands for original content to other firms.
Federated Media leaves at least two major legacies to be acknowledged: First, it pioneered the notion that not only would "brands become publishers," but they would be positioned to compete directly with publishers. Federated wasn’t aiming to be a substitute for the custom publishing arms of trade publishers like Meredith and Rodale. Instead, it was actively trying to disrupt that model with a brand-new approach to outsourced, contributor-based content creation. At the time, everyone was looking for “the Huffington Post in-a-box,” and Federated came closest to realizing that vision for brands.
Secondly, Federated was the first to recognize that the followings of bloggers and new social networks like Twitter allowed content creators and influencers to become the channel. While FM had not entirely figured out the value equation (it probably overpaid a lot of their “influencers”), it was the first to actively enlist luminaries like Guy Kawasaki to move their own audiences to the Amex Open site, demonstrating the content creation potential of influencer marketing.
These were both huge, market-making ideas, and the execution of those brilliant, prescient, too-early ideas was not only Federated's legacy business, but also its legacy to content marketing.
In my first few years working at a content marketing agency, I was frequently asked “So, are you like Federated Media?” But eventually those questions ceased, and we were asked to compare ourselves to Contently, or Skyword, or Newscred. Federated had somehow lost its way and stumbled into becoming yet another ad network.
Perhaps the margins in that space seemed better. Perhaps there was a leadership vacuum when Battelle stepped down, from which the firm was never able to recover. Or perhaps content always just seemed like a lot of custom work, while an ad network based on technology felt more "scalable" to its investors. I’ll leave the analysis to the comments section.
But whatever the case, Federated chose either the wrong course -- or worse, both courses. The schism announced last week might fix this dissonance, but then again, it might not.
Sometimes it's hard to be early. Federated Media stood alone in the marketplace when only a handful of companies like Amex wanted to take a serious stab at content marketing. The company had the whole market to themselves, before there was really a market to speak of. And then company strategists took their eye off the ball.Still, as content marketers, we owe them a debt for showing us the way.