The days of publishers’ unchecked growth is over. Under pressure from falling ad spend to media businesses and tooth-and-claw competition from rivals for subscription money, publishers are having to scale back both the types of content they cover – and that’s a good thing.
Even as those trends 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 favour, since it will allow them to take advantage of a burgeoning revenue stream – that of ecommerce.
Publishers have been reorganising their publishing strategies to proritise ecommerce for years. The late lamented Gawker, for instance, was seeing fully a third of its revenue delivered through native advertising and ecommerce through affiliate links all the way back in 2015, with its tech and culture brands particularly well placed to generate revenue that way.
Since then, other publishers are prioritising ecommerce growth over advertising solutions.
Future Publishing, for instance, saw its revenue from ecommerce increase by 72 percent last year, with that strand now making up 15 percent of its total revenue for the year. Consequently, it was reported that the publisher was looking to “turbocharge” its ecommerce-ready brands like T3 to capitalise on that early advantage. David Tomchak, digital director of editorial at London-based freesheet The Evening Standard, told Digiday that its ecommerce offering was set to “be an important part of our revenue, not just an add-on”.
That growth is driven, unsurprisingly, by changing consumer habits. As tech, particularly smartphones and mobile platforms, has become omnipresent, consumers have become habituated to buying products online. Research from Emarketer and FIPP found that the majority of first-time digital buyers are completing transactions via their mobile devices, and that “ by 2021, mobile ecommerce could rake in some $3.5 trillion and then make up almost three quarters (72.9 per cent) of ecommerce sales”.
The old adage that mobile readers are worth a fraction of desktop audiences might be about to be ripped up. That’s especially likely if you take a look at how mobile ecommerce works on platforms like WeChat, where its users are used to paying for everything from stickers in chat to their taxes through the single (admittedly huge) platform. WeChat’s owner Tencent has begun to encroach on Alibaba’s ecommerce territory as a result, and it isn’t being shy about its intentions to expand into territories like Europe. Even if it doesn’t have the same success outside of Asia, it’s almost certain that other platforms will copy its ecommerce integration, further habituating audiences to paying for things on mobile platforms. For publishers, who have historically had a hard time monetising mobile audiences through advertising, that presents a huge opportunity.
More than that, however, there are still huge changes to the integration of online and offline experiences that are set to accelerate the trend even further:
I suspect machine learning will be the biggest change to ecommerce since it began – image recognition in particular. What happens when you can wave a phone at something and say ‘I like this’?
— Benedict Evans (@BenedictEvans) May 19, 2018
Similarly, the rise of voice search has implications for publishers looking to sell products and services on devices like Alexa, although comScore found that consumers are still less likely to purchase through such devices than via mobile or desktop.
But not all publishers are ready to take advantage of the ecommerce boom, and there is no one-size fits all solution for those that are trying to grow their commerce revenue.
Stackcommerce, for instance, is an ecommerce tool for media companies that is designed to sit within the publisher’s CMS – which it describes as ‘native commerce’ – avoiding the issues around ad-blocking and interruptive design that hamper some ecommerce strategies. It works with publisher partners including Ziff Davies, Engadget, AOL and Bonnier to alleviate some of the issues around the disruption of the digital advertising ecosystem, while also allowing revenue share between the publishers and the brands with whom they partner. Its VP of business development Ben Gafni explains:
“I think people are becoming a lot more ad blind. We’ve had folks attempt to serve the content that we create and the products that we’re producing for publishers within ad units and it just doesn’t work. It’s pretty clear that when people go to their favourite sites they’re often completely immune to what they see in that light rail and that banner position.”
Gafni is keen to note that the product is neither designed nor positioned to be a replacement for advertising revenue, instead being additive:
“Really being in that content well has a lot of benefits to the publisher, as well as being incremental to what they’re doing with ads. Because you can always create another piece of content that flows down the river, so we don’t have to get involved in the game of yield maximising. You can always work to get that piece of content delivered to the right person at the right time.”
Stackcommerce also has a brand studio, which 60 percent of its publisher partners take advantage of. Gafni explains that, as publishers are often struggling to create enough purely editorial coverage to stand out in crowded markets, they often appreciate the option to have ecommerce content created by the Stackcommerce team.
By contrast, Shopify provides ecommerce solutions that span the online and offline worlds. It has integration with platforms like Facebook Messenger, as well as allowing users to manage custom digital storefronts. Since it was founded, Shopify has enabled over 600,000 merchants to sell over $55 billion of products, and is primarily designed to allow small businesses to transact with the ease of the larger online retailers.
Its product manager Zabrina Hossain explains its platform agnosticism:
“Shopping is becoming this natural integration of our everyday life. I don’t just research something online, I might get retargeted on a Facebook ad and then see it again and click through and then read a blog. With this increased time we’re spending online and on mobile and also with these physical experiences, Shopify is working on these experiences that are on the bleeding edge of ecommerce.
“Today’s world, what’s great is that platforms like Shopify really enable small merchants to relevel the playing field. What we recognised is that merchants have various needs. Some might want to reach a wider audience base with Amazon or eBay, or some might want to build their brand through more social channels on Instagram and Facebook.”
In addition to CMS integration and bespoke digital storefronts, the affiliate link remains a favourite for publishers looking to monetise their content through ecommerce. Providers like Skimlinks connect publishers with brands in its network, earning publishers commission from any sales that originate from one of those publishers’ pages.
Skimlinks has worked with luxury lifestyle brand GQ, for instance, to develop best practice for ecommerce using its user data, which Digiday reports has already had a significant effect on its revenue:
“Recommends is the second product GQ has added to earn more affiliate commerce revenue. A Best Stuff newsletter launched in August. GQ said commerce revenue grew 500 percent, year over year, in 2017, though it declined to share hard revenue figures. It expects to grow that total 30 percent in 2018.”
All three solutions – affiliate links, CMS integration and bespoke digital stores – rely on accurate user data that helps optimise publishers’ strategies. Hossain describes that user data as “the core of any commerce business, whether online or offline”. All three are also increasingly moving towards a mobile-first approach to ecommerce, driven by the changing consumer habits that enable publishers to succeed in the first place. More importantly, however, is that each solution is additive to publishers’ other revenue strands, and in many cases support them. Gafni, for instance, is especially excited about Stackcommerce’s ability to sell publishers’ subscription services, and believes that the future of ecommerce for publishers is less about the sale of physical products and more about the selling of services:
“A lot of times when you think about ecommerce for publishers you’re really thinking about those physical products – headphones, technology or beauty or one of those categories – a huge part of our business has been digital products.
“E-learning and classes has been a surprising part of our business. I think that my sense is that the definition of ‘ecommerce for publishers’ is going to continue expanding.”
Hossain believes that publishers’ experience with content creation will be an advantage as the ecommerce ecosystem matures, and real-world experiences drive digital sales. She cites Shopify’s work with Snapchat and Nike earlier this year as an example of the sort of mixed-media approach to ecommerce she expects to see become more prevalent:
“I think the line between our online and social worlds and with our offline worlds are going to become increasingly blurred. I think we’re going to have experiences where we’re in person but buying over one of our social networks; we’re going to have experiences where we’re interacting with someone in virtual reality but having a shopping experience.”
She also believes that deeper integration with platforms like Facebook Messenger will become more common as a WeChat-like model of digital payment becomes more widely adopted:
“Facebook is obviously a giant in the market where merchants are using it to build their brands and communicate with their buyers, and so a few years ago when this opportunity came up, we knew that merchants wanted a way to sell even more seamlessly through Facebook, and so that’s how the partnership began.”
So, what are the commonalities among publishers looking to grow their ecommerce business through one of those three types? The primary shared advantage of publishers is their expertise in a given area; the trust that their audiences have in their content both as a means to discovery and in terms of reviews. Gafni says:
“One that that smart publishers end up doing well is becoming a discovery platform for their readers. The best sites aren’t just talking about deals… it’s really about what types of products are there out there that reach this bar of ‘we want to write about it’.
“You go to the front page of Amazon, you try to buy a gift for someone. You have literally every option under the sun… so 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.”
Similarly, though Shopify isn’t as predicated on publisher content as Stackcommerce, Hossain agrees that those publishers who are best placed to grow commerce revenue are those with a trusted reputation around a niche topic:
“I think the most compelling thing is to have a story that really resonates with your users. If you’re a publisher that is more on the business front, don’t try to sell toys.
“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.”
So while shrinking ad revenue is certainly bad for publishers in the meantime, it has also forced most of them to reappraise where their strengths lie. Now that brands are more constrained around the types of content they can afford to create, many are rediscovering that smaller, more engaged audiences are more valuable, both for subscription and ecommerce purposes. Some sites are even unbundling themselves specifically to appeal to those audiences:
— Digital Content Next (@DCNorg) May 21, 2018
It might have been largely forced upon them by dwindling ad revenue, but publishers have turned themselves into lean, mean ecommerce machines. In concert with service providers like those mentioned above, they are set to ride the wave of ecommerce growth by doubling down on their original purpose – that of being trusted voices and authorities, the lone signal among all the noise online.