Former Content Producer to Let Go of Handle

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Demand Media is turning over a new leaf.

The Santa Monica media and e-commerce holding company announced late last month that it would change its name to Leaf Group, effective Nov. 9. Demand Media last year purchased Leaf.tv, a women’s lifestyle video content creator.

The company has been retooling for a while. In addition to some recent acquisitions, it has sold off a few hallmark properties as part of an effort to distance itself from a reputation as a content farm and decrease its reliance on advertising revenue. Gone are arts and crafts website Creativebug, social media engagement tool CoverItLive, and domain registry Rightside.

The firm was bitten badly by the content farm references, an industry term for a publisher that cares more about editorial scale than quality with the goal of luring in web surfers and advertisers. After Alphabet Inc.’s Google recalibrated its search engine formula in 2011 to partly reject cheap content, Demand Media’s market capitalization shrunk dramatically, from more than $2 billion to about $110 million today.

The company has refocused on its growing e-commerce properties, print seller Society 6, and fine art marketplace Saatchi Art. Its combined e-commerce revenue grew by 47 percent last year to $52.2 million and now represents 41 percent of revenue.

Watching Competition

Pathmatics last month partnered with Nielsen Holdings to sell a new way to spy on the competition.

The Santa Monica startup’s digital ad technology helps companies track where competitors are placing ads and what type of ads are being placed, and provides estimates on how much is being spent on those placements.

“That allows our customers to dive in and understand how they should be reacting in a market,” said Chief Executive Gabe Gottlieb, adding, for example: “If my sales are down and I’m getting outspent 3 to 1 (in advertising) by my competitor, that’s probably a good reason why.”

Britain’s Nielsen has integrated Pathmatics technology into its advertising intelligence software products for U.S. and Canadian customers. Nielsen will give a cut of revenue to Pathmatics, and its large customer base could help boost Pathmatics’ revenue by a double-digit percentage, said Gottlieb, who wouldn’t disclose specific revenue figures.

In addition to integrating its software with Nielsen’s programs, Pathmatics has a standalone subscription product that costs tens of thousands of dollars to hundreds of thousands of dollars a year, depending on the size and needs of a customer, Gottlieb said.

Though much of Pathmatics’ revenue comes from selling its products to brands and agencies, it also sells to advertising exchanges to help them figure out where customers are buying ad space.

“We help them understand who’s buying a lot of ads, so as to determine if there is a big brand that is not working with them,” said Gottlieb.

The firm has roughly 100 customers, including agency Mindshare, Pasadena ad exchange OpenX, IAC’s About.com, and software firm Videology, he said.

Founded in 2010, the company has raised about $5 million from investors such as Santa Monica’s Upfront Ventures and BDMI of New York.

Civilized Cannabis

Derek Riedle believes that marijuana culture is too narrow.

The chief executive of digital media company Civilized of Venice thinks the leafy green drug has received a bad rap and in reality is enjoyed by more than just stereotypical stoners.

In response, Riedle launched website Civilized.life last year with the intent of making casual marijuana use just as acceptable as drinking a beer. The website covers cannabis policy as well as lifestyle topics such as clothing, food, and travel.

Riedle said the site reaches 1.7 million unique visitors a month.

“We certainly don’t embrace the color green. We don’t have leaves. We don’t have cannabis or weed anywhere in our logo or brand promise,” said Riedle. “We are letting people, our staff or contributors, talk about it in everyday terms rather than this vocab and mystique that has grown up around it because it’s been a prohibited substance all these decades.”

The company has raised about $1.3 million in seed funding from investors that include Mitch Fox, former group president and publishing director of Condé Nast.

Riedle said he came up with the idea for a mainstream cannabis website when he stepped outside a restaurant to smoke a joint behind a dumpster on Abbot Kinney Boulevard. It struck him that there were other professionals like him who enjoy the drug but don’t fit in with the cannabis culture and don’t appreciate having to consume it in the shadows.

“Our readers don’t define themselves by cannabis use. Just like beer and wine drinkers don’t define themselves (that way),” he said. “There are so many people because of prohibition, which we believe is silly compared to alcohol, they are living their lives in the cannabis closet.”

Staff Reporter Garrett Reim can be reached at [email protected] or (323) 549-5225, ext. 232.

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