Enom 2011 Annual Report Download - page 8

inaccurate information because the demand for highly specific, relevant information is outpacing the supply of thoughtfully researched, professionally
produced content.
Content Creation Trends
The rapid evolution of audience behavior, particularly the significant fragmentation and the shift of audiences online, is changing existing content
creation models, including the formats of content that are produced for online consumption. Historically, traditional media companies have generated high-
cost, general interest content targeted towards a mass audience of predominantly offline consumers, and have monetized it through advertising or by selling
this content directly to consumers. This traditional cost structure is less effective for creating niche content and for selling targeted advertising to fragmented
audiences. At the same time, the widespread adoption of social media and other publishing tools has reduced barriers to publishing online content and has
enabled a large number of individuals to create and publish different types of content on the Internet. However, the difficulty in constructing profitable
business models from their individual endeavors has relegated online content publication largely to bloggers and passionate enthusiasts whose limited
resources have often resulted in varying levels of quality. Businesses with online presences have struggled to capitalize on the marketing opportunities
presented by new forms of Internet-focused content publishing.
Distribution Trends
Advancements in social media, search monetization and digital publishing technologies have also dramatically reduced barriers to distributing content.
As publishers attempt to meet increasing consumer demand for specific content, the number of websites has proliferated at an exponential scale. Prior to these
developments, website publishers, similar to traditional media companies, relied primarily on marketing to attract audiences. Now consumers primarily use
search engines, social recommendations and mobile applications to discover content. Brands have recognized the potential to attract consumers to their
offerings by supplying them with valuable and engaging online content related to their products and services. Further, content increasingly is distributed and
accessed virtually anywhere via smart phones, tablet computers and other mobile devices.
Monetization Trends
The percentage of advertising budgets allocated to online advertising still lags the percentage of time spent by people consuming media online.
Marketers are seeking better ways to reach the fragmented consumer base in a more targeted fashion. This trend is likely to accelerate as advertising dollars
move from offline to online media, and marketers increasingly adopt strategies such as search engine optimization, paid social media and search marketing.
Some marketers are attempting to further enhance brand recognition by sponsoring featured online content that is both credible and responsive to consumer
interests.
Our Solution
Consuming, creating, distributing and monetizing different types of content online presents new and complex challenges. Currently, content produced
by media companies and Internet portals is often expensive to create and focused on event-driven topics that, given their short useful lives, are challenging to
sell to advertisers for sufficient amounts to justify their production costs. On the other hand, individuals such as bloggers are able to economically create and
publish niche content, but often lack recognized credibility, production scale and broader distribution and monetization capabilities. These challenges have
had a profound impact on consumers, freelance creative professionals, website publishers and advertisers who are in need of a solution that connects this
disparate media ecosystem.
We have built a platform with a proprietary set of solutions that we believe addresses the market challenges and unfulfilled needs of online consumers,
freelance creative professionals, website publishers and advertisers. Our business is comprised of two distinct and complementary service offerings:
Content & Media and Registrar. These service offerings provide us with a unique combination of proprietary technologies and social media tools, extensive
audience reach through our owned and operated websites and our network of customer websites, a qualified community of freelance creative professionals
and access to a significant amount of proprietary Internet data.
Our Content & Media service offering is engaged in creating media content, including text articles, videos and other formats and delivering it along
with social media and monetization tools to our owned and operated websites and our network of customer websites. Key elements of our solution include:
•Content. We create highly relevant and specific online text articles, videos and other content formats that we believe will have long-term
commercial value. The process to select the subject matter of the majority of our content, or our title selection process, includes automated
algorithms, third-party and proprietary data and several levels of editorial
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