Demand Media Buys IndieClick, RSS Graffiti; Expands Google Ad Deal

In addition to releasing its Q2 earnings today, content aggregator Demand Media (NYSE: DMD) has made two acquisitions: it’s bought a long-running partner, blog ad network IndieClick and RSS Graffiti, a Los Angeles-based developer of social media products, primarily Facebook. Separately, the company has expanded its ad sales partnership with Google (NSDQ: GOOG) that is intended to boost Demand’s “premium” ad inventory.

While seemingly far apart, Demand Media’s deals with IndieClick and Google are both centered around getting the advertisers to recognize it as a premium content aggregator and, the company hopes, ensure that the term “content farm” never touches it again.

The $14 million acquisition of IndieClick, which runs works with such irreverent sites as Damn You, Autocorrect and women’s culture site The Hairpin, is seen as a complement to Cracked, the 50-year-old humor property that the company bought in 2007 after it stopped publishing in print.

Terms of the RSS Graffiti deal were not disclosed.

These two companies represent the second and third acquisitions Demand Media has made since its January IPO; it bought live blogging tool CoveritLive in March. As that purchase was meant to bolster Demand Media’s Pluck social media platform, which lets customers add online forums, photo galleries, and other social tools to their sites, the company isn’t just buying IndieClick for its collection of content destinations; Demand Media is buying it for the ad sales and creative tools IndieClick has to offer.

“Advertisers are moving beyond the Interactive Advertising Bureau standards,” said Joanne Bradford, Demand Media’s chief revenue officer, in an interview ahead of the earnings.

The two companies have been working together for about three years now, added Larry Fitzgibbon, Demand Media’s EVP of media and operations. “IndieClick has strong relationships with advertisers and has built an array of ad platforms that we’ll be able to offer more widely as well,” he said, when asked why the need to own instead of partner.

Meanwhile, in addition to continuing to partner with Google on AdSense, Demand Media is also signing on with its DoubleClick platform and the Google Display Network Reserve, which was launched earlier with the promise of giving advertisers the chance to buy premium inventory on a guaranteed basis. “We see this as a good opportunity for selling premium inventory,” Bradford said.

Still, she and Fitzgibbon noted the importance of IndieClick in supplementing the branded content, such as Tyra Banks’ typeF women’s site, and looking beyond Demand Media’s best known site eHow. IndieClick is aimed at users aged 18-34, and users have moved beyond established destinations that are reflections of print publications, Bradford told me, noting that she also relies on an informal focus group at home about what younger web users want in online content. “My 17-year-old daughter was thrilled when I told her we would be working with [music fest] Coachella through IndieClick.”