|
Getting your Trinity Audio player ready...
|
At first glance, the latest Digital News Report does not seem like an obvious source for insights into eCommerce strategies and implementation. A cursory glance of the 164-page document reveals that “eCommerce” and “online shopping” are mentioned just three times.
That may be surprising, given that an earlier study, the Reuters Insitute’s annual “journalism, media, and technology trends and predictions” noted that “new digital revenue streams such as subscription, e-commerce, and digital events [have accelerated] over the past 18 months.”
Moreover, the earlier report (published in January) also included findings from a survey of 246 media leaders in 52 countries, which found that just under a third of commercial publishers (32%) said that eCommerce would be an “important” or “very important” revenue stream for their company in 2022.
One reason for this variance is the Digital News Report’s (DNR) emphasis on audience habits and attitudes, and less on wider market developments – or the C-Suite lens – seen in their annual predictions report.
The two studies, of course, are complimentary. And digging into the DNR reveals insights that help to reinforce why eCommerce can be a potentially good strategic fit for many publishers. For those players, here are three key reasons that help to emphasise the importance of their eCommerce efforts:
1. eCommerce as a means to combat subscription fatigue
“Thanks to creeping inflation, your monthly digital subscriptions might need some pruning,” an article in The Washington Post observed recently, discussing the most common forms of premium entertainment, and ways in which (some of them) could be swapped out for a number of free alternatives.
This followed a 2021 article in The Post which highlighted how “everything’s becoming a subscription” and that some Americans are now signed up for 10 or more. “It’s bringing convenience,” they commented, “and a lot of monthly fees.”
Against this backdrop, the ability to grow reader revenues – and in particular the size of your subscriber base – may become increasingly challenging. As a result, it is incumbent on publishers to avoid putting all of their eggs in one financial basket.
Diversification is key and placing too much emphasis on any single revenue stream could prove to be a costly mistake. Moves to grow reader revenue must be accompanied by other efforts too, and eCommerce can play a pivotal part in that mix, especially for lifestyle brands.
The report demonstrates elements of this in operation, including the establishment of an online store by the Ming Pao newspaper in Hong Kong, as well as the buyout by the Hong Kong television network TVB of the local eCommerce company Ztore. The broadcaster hopes the move will help enable them to grow the revenues they generate through online sales of products first shown on TV.
As Jonah Peretti, BuzzFeed’s Founder & CEO, has previously acknowledged, media companies typically have an “attribution problem,” whereby “Google and other middlemen end up capturing value they didn’t create.” Peretti explained this by pointing out how content has often “inspired a consumer to take action… But most of the profit is captured by digital middlemen who didn’t create much value.”
Affiliate partnerships, online stores (on your own website) and other eCommerce efforts, offer the potential to help close that attribution gap, capture consumer expenditure that would otherwise be spent elsewhere, as well as provide publishers with a welcome revenue source.
2. eCommerce as a means to capture valuable first-party data
“Beyond concerns about subscription diets, media companies face another challenge in maintaining advertising revenues in the face of the imminent phasing out of third-party cookies,” the report authors write. “Without these cross-platform trackers, media companies are looking to build up their own first-party data that can give them more leverage with advertising companies – and increase the rates they can charge.”
Securing this data is not simple, however. The report shares that across the 46 markets covered by the study, most consumers are still reluctant to register their email addresses with news sites. Only a quarter (28%) are willing to do so.
Part of the reason for this is a sense that audiences can find the same content elsewhere, for free, or without having to hand over these details. Alongside this, only around a third (32%) of their sample said they trust news websites to use their personal data responsibly.
Remedying this means having a clear value proposition. Publishers need to make clear why registration is required (and they need to engender trust that this data will be used wisely). This could include the ability to access subscriber-only content (The New York Times, for example, put its review site Wirecutter behind the paywall in the past year), as well as online – or newsletter – only deals and savings.
Proponents of first-party data also argue that it can lead to a better consumer experience in terms of more personalized and relevant content (including ads), benefits that publishers may also want to highlight to their audiences and make good on.
There are potential benefits for the brands and advertisers that publishers work with too. According to Google and the Boston Consulting Group (BCG) companies using first-party data for key marketing functions achieved up to a 2.9X revenue uplift and a 1.5X increase in cost savings.
3. eCommerce as a plank in your content strategy
This year’s report highlights how audiences are increasingly turning away from – or at least selectively avoiding – important stories such as coverage of the pandemic, Russia’s invasion of Ukraine, and the cost-of-living crisis.
Almost four in ten (38%) digital news users say they often or sometimes avoid the news. That’s up from 29% in 2017, and news avoiders have doubled in Brazil (54%) and the UK (46%) in the past five years.
There are a plethora of reasons for this, including levels of trust in the news media, concerns about misinformation, as well as the complexity of the language or assumed knowledge often contained in news reports. Alongside this, the report also reveals that among digital news consumers, the proportion of users who indicate that are “very” or “extremely” interested in the news has fallen across a number of markets over time.
All of these issues need to be addressed, with publishers looking at the style and tone of coverage, the formats they use, as well as their wider content mix. This is especially important if news outlets are to continue to grow their subscriber base and encourage audiences to pay for news.
As it currently stands, co-editor Professor Rasmus Nielsen observes in the report’s press release, “much of the public – including people who happily subscribe to online video or music streaming services – do not find news worth paying for.”
“It is therefore critically important,” Nielsen argues, “especially for those who believe journalism needs to serve the whole public, to think about how they can create a more compelling offer for a wider public and look beyond subscription-based models that primarily serve more privileged people.”
eCommerce can have a role to play here. The rise of review sites and sections, for example, don’t just generate page views and revenue, they are also a potential gateway that can be leveraged to introduce audiences to your other content (including news stories).
It’s a tactic that publishers have successfully harnessed in recent years with COVID content, using this as a gateway to demonstrate the breadth of their portfolio, including archive and evergreen content. eCommerce-related materials can arguably be used in much the same way; potentially introducing less-avid news users to stories they otherwise might not have sought out or consumed.
Moreover, as publishers like Gannett, Future, Marie Claire, BDG, The Independent, and others have shown, eCommerce has the potential to drive new products, verticals and titles. With more and more consumer – and advertising – spending moving to eCommerce, this is a content area that is already too big for most publishers to ignore.
The Digital News Report further reinforces that conclusion, given its emphasis on the risks of subscription fatigue, the challenges manifest in current first-party data strategies, as well as levels of news avoidance, seen among news audiences around the world.
eCommerce is not a panacea, but it can be a part of publishers’ solutions to addressing these important structural and strategic issues.
