One of the greatest challenges we face here at FM is answering a very simple question: What kind of a business are you?  

When a reporter, partner, or colleague asks me this question, it’s usually followed by a deep intake of breath on my part, because my answer often runs for quite some time. Federated Media wasn’t built to answer easy questions, and our business isn’t easy to define. Quite purposefully, we have built our business in the center of some swiftly changing currents at the nexus of media, marketing, and technology.

But if you don’t take the time to define your brand publicly, others will. Over the past few months FM has been called a social media network, a blog network, a vertical ad network, an advertising rep firm, a media services firm, and even a new kind of advertising agency.

The truth is, FM incorporates aspects of all these businesses. What we are not, however, is any one of them alone.

Hence, our problem (I prefer opportunity, being eternally an optimist…)

So for the record, let me state what we believe FM *is*: FM is a media company, founded on an evolving definition of the word “media.”

Why the caveat? Well, anyone who thinks the media industry is in a period of stability is clearly not paying attention. And anyone who believes they can create a media company with a static business model must have money to burn. Our industry is in a period of intense change, and that creates extraordinary opportunity. FM’s mission is to thrive in this chaos, both by embracing it, as well as helping to define it.

FM exists to serve two core constituents: Authors – creators of content, community, and platforms that bring engaged audiences together – and Marketers, who wish to promote their brands to authors and their audiences. In traditional terms, that’s a pretty easy model to understand: It looks a lot like a publishing company. (Our full name is Federated Media Publishing, after all). But being a publisher in a world of Conversational Media isn’t exactly well defined – yet.

The original thesis of our business was also pretty simple: In a world where talented individuals and teams could easily (and cheaply) gain access to the tools of media production (content creation) as well as the means of distribution (content consumption), traditional economic models of the media business were ripe for reinvention. No longer did a great writer or producer need to attach themselves to Viacom or Time Inc. to find their audience, instead, they could create their own site and, if what they made was good enough, audiences could find them. Thanks to search and social media, it turns out good stuff gets found pretty quickly.

In the past five years, thousands of such extraordinary sites have emerged, from the directory of wonderfulness that is Boing Boing to the true life confessions of the Pioneer Woman.

But creating great content and connecting with great audiences is only part of what makes a media company. The other parts have to do with interacting with the marketplace – the brand marketers who, in the main, have always underwritten the creation of great content. Interacting with those marketers requires a very distinct set of skills, skills that traditional media companies have honed over the decades, and skills that most independent creators of content either can’t afford (in most traditional media companies, “content creation” is usually less than 20% of costs), or don’t wish to fully develop (ask any creative person which they’d rather do: create, or sell and service their wares? The answer’s usually the former).

And just as the traditional media business is undergoing a process of extraordinary change, so too is the marketing business. (I’ve written a fair amount about this on my other site.) Briefly, marketing in an environment of conversational media requires another new set of skills, skills that most brands (and their agencies) have only recently begun to explore.

So we’ve got an interesting ecosystem emerging: On the one hand, great publishers are building compelling platforms that attract millions of engaged audience members, but many of them simply don’t have an economically viable way to go to market. On the other hand, thousands of great brands wish to engage with those publishers and their audiences, but since those publishers don’t act like “traditional media companies” with large sales, account services, finance, and operational staff, marketers find them hard to work with.

This is where FM comes in. We connect great media brands with great marketing brands, and we try to do it in a way that adds value to everyone involved. That’s what publishing is, and that’s why we call ourselves a media company at our core.

But creating a new kind of media company in times of great change requires acting in ways that may seem confusing to anyone seeking to put FM into a bucket of one kind or another. For one thing, the publishers with whom we work never comprise a static list – one brand might leave, another might join, or we might announce an entirely new group of brands (what we call a “Federation”) all at once (keep an eye out, we’ll be doing that very shortly). We also like to break new categories of social media – as we did initially with blogs, then with applications on Facebook and community sites like Digg, or superfresh platforms like Twitter.

We call this a “fluid portfolio” approach to media – we recognize that the publishers we work with are also in a state of constant change. Some may be sold to traditional media companies, others may find new partners, and others still might simply no longer be a fit with our model. That’s very different from traditional models of media, where big media companies invest millions into building owned and operated brands that they then hope to milk for decades.

This fluid portfolio allows FM to be flexible when it comes to addressing the needs of marketers and their brands. Sure, we sell a lot of traditional IAB banners, but that’s just the table stakes. When HP wanted to reach influential people in graphic arts, we created the Graphic Arts Federation. When Microsoft Windows wanted to reach music lovers, we struck a deal with Outside Lands, created CrowdFire, and invited many of our current authors to contribute to it, as well as striking new relationships with sites like Pitchfork and Jambase. When brands asked us to help them understand Twitter, we called Twitter, and now work with them to create new publishing platforms like ExecTweets, which we then promoted across a broad swath of our publishing partner’s sites.

Sometimes it helps to explain your business by comparing it to well understood categories. So here goes.

* How does FM compare to ad networks? While we have significant scale (47mm uniques and growing), FM works directly with a select portfolio of high quality sites, less than 200 or so. While our sophisticated (and largely unsung) technology platform has most of the capabilities of an ad network (optimization, run of network, measurement, various flavors of targeting and reporting, etc.), we are most definitely NOT an ad network. Like most premium publishers, we do work closely with top ad networks – more than a dozen of them and counting – to fill unsold inventory (what’s called “remnant” in our business.)

* How does FM compare to an ad agency? FM works directly with nearly every advertising agency in the industry. But because we execute marketing campaigns, some people see us as an ad agency. Truth is, every major media company must provide a level of marketing services to its clients, both ad agencies as well as direct to the brands those agencies serve. But while an advertising agency’s core mission is marketing: bringing marketer’s brands to market, FM’s core mission is publishing: to bring publisher’s brands to market. The two often overlap, and happily so.

* How does FM compare to traditional media companies? As I outlined above, FM was created because we saw the traditional models for media creation and consumption in flux. A key tenet of FM’s philosophy is to be “author-driven” – we don’t own the publisher’s content, nor do we control it. This is a constant source of confusion in the marketplace – how can a media company not *own* the intellectual property it represents? To us, this is a source of pride – we think if the authors made it, the authors should own it! Our job is to help those authors go to market.

* How does FM compare to vertical networks or rep firms like Glam or Gorilla Nation? Of all the categories we are compared with, this one is perhaps closest, but it suffers from the same issues as ad networks – many “vertical ad networks” focus on building out the largest Comscore number they can. Reach is important, but engagement is key, we believe. We also believe there are significant differences in our approach, experience, and execution, but I best leave that for another post.

In short, FM exists in a robust ecosystem of all these categories of media-related businesses, and as with any ecosystem, their success is our success. As I inferred at the beginning of this post, it takes more than a catchy tagline to explain FM’s business model.

However, if you have one, we’re all ears!