How publishers are becoming strong ecommerce players
The commerce space promises new opportunities for publishers, so how are media companies pioneering and tapping into this monetization opportunity?
By Chaymae Samir, Reuters Community | Mar 22, 2019
Publishers are no strangers to the rollercoaster ride of ad-dependent revenue. And, every now and then, we hear about the publishing industry’s next great hope – from AI to voice search to social video streaming, a revenue generating lifeline seems to pop up every quarter.
Arguably, we’re on the cusp of a digital renaissance. Online publishers from new-media monsters like Barstool Sports to heritage titles like Vogue are using ecommerce to fund journalism.
If you’re still wondering how to connect your content to a retail opportunity, here are four examples of publishers moving readers from information and inspiration to transaction:
Buzzfeed
Commerce revenue: $250 million
Revenue streams: licensed products, affiliates, ads, products development
For many publishers, doing commerce refers to salting content with affiliate links. For Buzzfeed, that means creating a 65-person team able to take an idea that is generating cultural buzz and turning it into a product that’s ready to sell in a matter of days.
We definitely have a big affiliate strategy, but we also realized that our editorial sensibility and identity-based content can lend itself to physical goods, too. ”
— Ben Kaufman, Head of BuzzFeed Product Labs
The actual manufacturing, selling and shipping of goods might seem like a risky business for publishers, but it has certainly worked for Buzzfeed since ecommerce sales reached $50 million in 2018. In fact, and since 2017, BuzzFeed has developed checkout technology, hired warehouse management and customer acquisition specialists — not your typical publishing roles, and far beyond affiliate links.
BuzzFeed also licenses its Tasty and Goodful brands for home and kitchen products, which are sold at Walmart and Macy’s. What’s more, their deep knowledge of their own audience has secured them consulting work with brands like Maybelline that includes anything from developing products targeted at young millennials to doing a product workshop.
In addition to its ecommerce websites, BuzzFeed’s shop on Amazon lets the company quickly deploy new products as well as maintain its branded-experience through a multi-channel marketplace
But, Buzzfeed has its eyes on something bigger. With ad rates rising on Facebook and Instagram, the publisher is offering brands an alternative platform of 10 million fans and a service creating branded posts to drive sales for their clients.
Dennis Publishing
Commerce revenue: $83 million
Revenue streams: car sales, ads, consultancy, affiliates
Better known for magazines like Mental Floss and The Week, Dennis Publishing is selling between 250 and 300 cars a month through its buyacar.com website. And, business is booming with growth estimated at 60% and ecommerce revenues accounting for almost 40% of the company’s total turnover. The publisher is just getting started in the car commerce business. Its plans? Getting a bigger share of the 8 million used cars sold in the U.K. each year (the site currently sells around 1,000 cars a month).
We want to massively scale the business because we believe it will generate revenue in the hundreds of millions [of pounds] in the next few years. Next year, I believe we’ll make £100 million [$138 million]”
— Pete Wootton, managing director – digital, Dennis
The focus is on selling old cars as they offer greater margins but the best cars remain the ones sold on finance packages because customers pay in monthly installments. This takes the publisher’s diversification strategy even further with Dennis tapping into financing and insurance.
Owned by Dennis, Auto Express and Carbuyer, whose sites have 2.5 million and 1.2 million monthly visitors, help drive 15% of Buyacar customers.
Although affiliate revenues are a nice add-on to the publisher’s bottom line, Wootton suggests no publisher should be dependant on those as publishers don’t retain the customer data on purchases made via affiliate links, as they typically occur on the product sellers’ own sites.
It’s that very same data that drives another source of revenue for Dennis: consultancy. Car manufacturers in Europe are asking the publisher what it has learned from selling cars online, such as whether there are patterns in what cars sell better online compared to those sold directly via car dealerships.
The New York Times
Commerce revenue: undisclosed
Revenue streams: merchandise, events, ads
The New York Times is currently selling branded apparel (sweatshirts, t-shirts, caps, etc…), books, archival photography, and personalized front page reprints. To control quality, the publisher holds its own stock.
One important takeaway from their experience is to always make sure the products you’re selling align with your brand and actually deliver real value to your audience. That is why The New York Times is constantly revising its offering. It sells personalized birthday books but no longer sells personalized wooden pie boxes, for instance.
The New York Times is exploring other strategies surrounding ecommerce, including native commerce. In 2016, the publisher acquired The Wirecutter, an online consumer guide known for publishing in-depth product reviews and producing independent editorial picks for consumer purchase, therefore earning affiliate commissions.
That acquisition signals a content-driven approach to commerce. The Wirecutter doesn’t monetize reviews by placing interruptive video and banner ads around content but rather focuses on an editorial approach to curating and reviewing what they believe are the best products in the market.
BarstoolSports
Commerce revenue: 50% of total revenue (of which 10% is ecommerce)
Revenue Streams: merchandise
Barstool’s audience is modest by today’s standards, under 10 million visitors a month, but the publisher has something many in the industry are struggling with: audience loyalty. Barstool’s fans even self-identify as “Stoolies”.
According to the publisher, having consumers actively looking for their content and engaging with it is the reason behind its success in ecommerce. A lot of its merchandise is inspired by inside jokes and “ongoing storylines” involving Barstool personalities.
It’s a brand that many men – and some women – really identify with. At its core, Barstool is an opinion-driven, unfiltered brand that connects with young men in particular about the topics they care about, the things they’re watching.”
— Erika Nardini, CEO, Barstool
And, every year the publisher leverages its reach during Black Friday to make some extra ecommerce sales. This year, they registered 35,000 orders on that day selling everything from hats, T-shirts, ugly Christmas sweaters and for the first time, an upscale line that included $60 hoodies and $100 windbreakers at 20% off. Revenue figures were in the single digit millions with cart orders in the $500 to $600 range for the first time.
Barstool Sports promoted the Black Friday sale by creating more than 20 pieces of content, including social videos and articles promoted by various personalities. It also used the Black Friday sale to push other areas of its business, including season passes for its Rough N Rowdy pay-per-view boxing series and subscriptions to its SiriusXM channel.
Pursuing an ecommerce strategy (besides the cash perk!) allows publishers to deliver value to advertisers and bring audiences closer to the brand. But, while the examples above are considered positive examples of ecommerce, other publishers have tried and failed.
What really makes or breaks a publisher’s ecommerce approach is how content is included as part of an online shopping experience, both in terms of discoverability and in decision making.