E-commerce has emerged as one the most important alternative revenue streams for many publishers in recent years. As consumer habits shift to digital, there are massive changes in how people access content, as well as how they shop. E-commerce is growing almost five times faster than in-store sales. According to a Business Insider Intelligence report, e-commerce sales are projected to double to $1.1 trillion by 2023, with m-commerce sales totaling more than $447 billion.
“A burgeoning revenue stream”
Publishers stand to benefit from e-commerce because of their expertise in a given area and access to, as well as the trust of their audiences. Many of them are aggressively building e-commerce-driven content and making profits. Condé Nast told Folio that its e-commerce revenue in October and November 2018 was nearly double compared to the same period last year. This was a direct result of increasing the amount of commerce-related content.
Even as those trends (falling ad spend, intense competition for subscribers) look bad for publishers in the short-term, it’s forcing smart media companies to refocus their efforts around their core competencies of high-quality, accurate content production and around niches, forgoing the indiscriminate publishing strategies in favour of appealing to smaller but more valuable audiences. In the long-term, that will work in their favor, since it will allow them to take advantage of a burgeoning revenue stream – that of e-commerce.Chris Sutcliffe, Senior Journalist, and Columnist with The New European and the Guardian
Magazine publisher Future, with a portfolio of 50 brands spanning consumer electronics, music, and photography, is among the many publishers that have ventured into e-commerce. “We want to make e-commerce a much bigger part of the overall mix rather than just incremental,” “We’re expecting it to be the majority (revenue stream),” says Future’s Chief Revenue Officer, Zack Sullivan.
E-commerce is not a “dirty word” in journalism anymore. Nor is it bad or evil. At Future, we provide honest and impartial advice about products answering the questions readers need answered. When good impartial content engages audiences it provides e-commerce opportunities that convert really well. Journalists have adapted to write good content which is searchable and marketable, yet still independent.Julian March, Former MD of Media, Games, Video, and Entertainment at Future
Need for a different business model
Once T3 redesigned its website, making e-commerce the dominant revenue model over display ads, e-commerce revenue grew by 120% this December compared to the previous year. Traffic to the site also increased by 12% year-over-year. According to the publisher, 10% of the people who visit T3 make a purchase.
The thesis was how do we build a site that facilitates transactions, operations and marketing director at Future. If you want to be serious about e-commerce, you need a different business model. You need different relationships with retailers; they need to tell you what is important. The KPIs, the planning, the audience research, almost everything needs to be overhauled.Zack Sullivan, Chief Revenue Officer, Future plc
T3 altered its content strategy to go deeper and broader with coverage, rather than creating multiple variations on lists and buyers’ guides. The team experimented with writing more shorter, quick-hit pieces, but found that commercial features like e-commerce widgets and display ads required more room on the page. So they began focusing on fewer, longer pieces that could hold more ad units.
So for example, instead of an article on the top 10 best TVs, T3’s editorial team uses social and search data to produce longer pieces around trending topics, like interesting new technology in TVs, or how to create best home movie experience. “It’s a more natural journey; users may not come on to explicitly buy a product, but we know they are looking to spend money. You have the content, a relevant element and then the retail buying experience all on the same site — it’s more how a retailer would behave,” comments Sullivan.
Making e-commerce a priority can cannibalize the conventional display ad business. If a user clicks to complete a purchase, they are not clicking on an ad. But so far, to Sullivan’s surprise, e-commerce revenue hasn’t cannibalized display ad revenue. While it did overtake display ad revenue in November, the following month they were equal. However, despite the unexpected growth in display, T3 is looking at e-commerce for future growth
“Serving as trusted voices and authorities”
According to StackCommerce’s VP of Business Development, Ben Gafni, “One thing that smart publishers end up doing well is becoming a discovery platform for their readers. The best publishers aren’t just presenting people with a list of deals and discounts, they’re using the power of their voice to talk about things that people might not have heard about.”
“I think it comes down to trusted content. Publishers really need to be discerning about what they’re publishing, what products they’re promoting because that really keeps the trust going in your audience base. Feel free to get more niche, as long as that is still targeted at a subset of our audience,” he adds.
While e-commerce may have been something that publishers had to pursue because of shrinking ad revenues. It has led many to discover that smaller and more engaged audiences can be more valuable in terms of e-commerce, as well as subscriptions. It is an extension of what they were already doing, serving as trusted voices and authorities for their audiences and it promises to help them thrive in the coming years.