Although advertising and digital subscriptions remain at the heart of the revenue strategies of many publishers, there’s an increasing recognition of the need for diversification. As a result, an importance is being placed – by many publishers and content creators – on growing alternative income streams. As I outlined in my 2019 report, 50 Ways to Make Media Pay, there are many different ways to do this. For some players, eCommerce could be a key part of these emerging revenue strategies.
eCommerce grew by 15% in the United States in 2018, representing a $517.36 billion market, and with global web sales in 2019 nearing $3.46 trillion, up 18% year-on-year, this is clearly too big a space for publishers to ignore.
For many publishers, eCommerce is increasingly about more than just affiliate links, branded content and online shops.
Although these activities still have their place, we are increasingly seeing a number of media outlets – across a wide variety of verticals and areas of content focus – exploring some of the wider opportunities that eCommerce potentially affords.
In some cases, this means innovating and moving into spaces, such as brand licensing (exponents of which include Time, Conde Nast and other magazine publishers), which many publishers have previously been uncomfortable with.
Alongside this, embracing eCommerce may also mean going beyond just the sale of physical products online, in order to explore a range of commercial transactions that are facilitated through the internet, including both the transaction of goods and services.
A number of these ideas were explored in-depth in my report, The Publisher’s Guide to eCommerce, which was published at the end of October 2019. In the coming weeks, What’s New In Publishing (which, with Sovrn, commissioned the original analysis) will publish updated extracts from that study, with a key emphasis on the key strategic lessons for publishers large and small alike.
We begin with a look at the emergence of eCommerce and some examples of how a range of different content creators and media players are approaching the potential afforded by this emerging revenue stream.
Publishers are betting on eCommerce, but it’s still early days
The percentage of revenue most content creators derive from eCommerce, remains small.
NBC’s TODAY Show generated $60 million in eCommerce revenue in 2018, which sounds impressive until you compare this with the $509 million in advertising revenue that the show reportedly brought in during 2016.
Similarly, The New York Times, which generated $709 million in total digital revenue in 2018, found that most of this came from subscriptions and advertising. “Other digital revenues,” a category which consists “primarily of affiliate referral revenue,” contributed just $49.4 million.
Nonetheless, these organisations, and others, are betting that this will change; and that eCommerce will become an increasingly substantial revenue source. As a result, they’re investing in eCommerce accordingly.
In a previous report, “50 Ways To Make Media Pay,” examples of existing eCommerce activity – ranging from selling archival prints and publications, through to the development of online stores and the travel programme run by the progressive American magazine, The Nation – were all highlighted.
However, as we shall see, those examples were just the tip of the eCommerce iceberg.
The Denver Post and Seattle Times
Selling products related to a publishers archive has been a time-honored staple for many print publications.
Outlets like The Denver Post, have an online store, which sells Colorado photos (grouped around themes like National Parks and the Denver Broncos) taken by its photojournalists. The Seattle Times, another well-known newspaper, sells wall art, keepsake pages (reprints for their archive), photos and prints as well as coffee table books.
In doing this, publishers will often work with third parties for the fulfillment, creation and distribution of products, reducing some of their risks in the process. As they stand, these moves are unlikely to bring in large amounts of revenue.
Nonetheless, they are a relatively low-risk way for traditional publishers to harness the power of their archive, and dip their toe in the eCommerce waters.
The Rise of Online Stores
Alongside dabbling with efforts to unlock some of the financial potential of their archive, an increasing number of publishers are also embracing further opportunities afforded by online stories.
StackCommerce, one solutions provider in this space, has highlighted the benefit of their partnerships with publishers such as Boing Boing, The Awesomer, Slashdot and Digg.
After integrating an affiliate partnership in 2015, 20% of Boing Boing’s revenues now come through native commerce, while Digg generates $100k in annual incremental revenue through a white-labeled shop (store.digg.com) and a shopping specific newsletter.
Meanwhile in Ohio, the Richland Source, a for-profit online news site, has taken this to a whole new level, through “Made in the 419,” a portal selling clothes, books and music designed and made in the 419 area code.
Launched in December 2014, the site notes that it “is proud to say that our photographers, graphic artists, screen printers, embroiderers and artisans are from Mansfield, Plymouth, Shelby, and all over the region.” “And if we can’t get it here,” they add, “we buy from companies like American Apparel that manufacture their goods here in the USA.”
Jay Allred, publisher of Richland Source, nonetheless has downplayed its financial impact, noting that despite “Made in the 419” catching the eye of media commentators, it’s not necessarily a direct money-maker. (Although, of course, there may be knock-on impacts which are hard to measure, such as increased brand recognition and profile, which may help other revenue streams.)
“Made in the 419 gets more interest than any other thing we do,” he told Nieman Lab in 2015, “even though I’ll tell you it generates the least amount of revenue; we’re basically break-even on it.”
Hearst and Dennis Publishing’s eCommerce efforts
Dennis Publishing, through its buyacar.co.uk website, is selling between 250 and 300 cars a month. Its titles Auto Express and Carbuyer, help drive 15% of activity on Buyacar and the company hoped to make £100 million [$138 million] in revenue from sales in 2019.
Their acquisition of Car Throttle in August 2019, a market-leading automotive social media brand, is part of their wider strategy “to build an end-to-end automotive business in the UK.”
According to Digiday’s Max Willens, U.S. based publisher, Hearst, has developed four commerce products, in the past year.
This includes a Runner’s World Store, a cookbook developed by Delish (their digital-native food site,) and Women’s Health, as well as online workout classes, costing $15 per month, or $100 a year. The classes feature a mixture of new and repurposed content.
BuzzFeed’s pivot to product development and eCommerce
BuzzFeed is another example of a media company actively pursuing multiple revenue streams, including eCommerce. In 2018, they made $100 million from income sources that didn’t exist two years ago. The company’s commerce division, which is supporting this diversification, generated $50 million in sales in 2018.
Alongside high profile successes – such as best-selling cookbooks, as well as partnerships with major American retail giants Walmart and Macy’s – BuzzFeed is also helping to design products for other companies. It’s an approach that some UK publishers – like Hearst UK, Jungle Creations and Highsnobiety – are also pursuing. In BuzzFeed’s case, these products do not necessarily have their name on it, although some, such as a combined lip gloss holder and fidget spinner, have done.
More conventionally, BuzzFeed’s eCommerce efforts have also introduced a new “Shopping Showcase,” a form of shoppable ads, designed “to connect our strong Advertising business and fast-growing Affiliate business.” Clearly labelled as an advertisement, former Product Manager, Swara Kantaria (she now works for Twitter) explained the potential behind the move, saying:
“The shopping ads are awesome because they are a new native ad format that not only grows our biz but also serves our users’ needs. When readers are on shopping posts, they are in the mindset to shop and find products they love and want to buy. With the new shopping ad product, brands can put their products in front of potential buyers who are ready to shop and therefore, will more likely buy the product.”
Online shoppable ads go mainstream
Google report that 50% of online shoppers say images of a product inspired them to buy it.
The emergence of shoppable ads, as exemplified above by BuzzFeed, is a format that allows brands to personalise the products an audience sees. Moreover, it also reduces the path to purchase, making items available for purchase at the tap of a finger. It’s an advertising format – and consumer behaviour – that is rapidly becoming more commonplace.
The presence of shoppable ads across Google Image search, social networks and elsewhere on the web, are all helping to make eCommerce more viable and appealing, helping to usher in the next era of online shopping.
It’s a bandwagon many publishers will, understandably, be keen to keen to jump on.
This article is adapted, and updated, from our free to download report, The Publisher’s Guide to eCommerce.