/ An inside look at the business of digital content
Avoiding platform-dependence pitfalls in content-powered ecommerceDecember 16, 2021 | By Chris M. Sutcliffe – Independent Media Reporter @chrismsutcliffe
The ecommerce boom was far and away the biggest trend to have come out of the pandemic – at least for digital media companies. Unsurprisingly, media organizations that had already invested in ecommerce infrastructure and affiliate revenue partnerships reaped big benefits. They made hay while the sun shone.
Good Housekeeping, for instance, saw an increase in ecommerce-powered sales of 567% in March 2020, compared to the same period in the previous year.
Some, like Dennis Publishing owner Exponent, even spun off parts of their businesses that were outperforming in terms of ecommerce. Its automotive-based properties were made into their own dedicated business – Autovia – in March of 2021. It was, as its chairman Peter Plumb noted, an opportunity “for those with the broadest and most engaged reach, the richest audience data and the most trusted brands and content.” They were poised to benefit from the rapid growth in ecommerce.
Meanwhile, Dennis’ future owner Future plc has absolutely dominated the ecommerce space. As countless analysts have pointed out, its long-held aim to own every part of the ecommerce journey from ideation to recommendation to purchase has proven to be a lucrative strategy.
But Future was not content to rest on its laurels. After announcing over $1bn in ecommerce and affiliate revenue in 2020, Future made a number of acquisitions to own even more verticals from top to bottom. As a result, it is set to push into the U.S. Overall, it sees a lot of headroom for its ecommerce ambitions.
And it is ecommerce-focused media companies that continue to grow ecommerce revenue even in the tail end of 2021. So, what do Future and the other huge media ecommerce successes have in common? The answer is down to that end-to-end ownership of a vertical. Though it remains to be seen how long that this strategy will suffice when platforms are also banking the benefits of ecommerce growth.
Putting the ease in ecommerce
One thing that needs to be pointed out is that it isn’t all that hard to simply launch an ecommerce strategy. Forbes has started selling branded items and called it its entrance into the ecommerce space, for instance. Meanwhile BuzzFeed has been loud and proud about its expansion into ecommerce partnerships as well. The company predicts that 18% of its total revenue will come from commerce over 2021. Even the companies whose print holdings are the main point of contact have doubled down on ecommerce technology, with fashion magazines like Grazia including scannable images in their pages.
And since the headroom for growth is so great it is also possible – or even likely – to report success in that area. That is itself cause for celebration. Diversification of revenue streams should be encouraged wherever possible. Even the recently announced tie-up of Vox Media and Group Nine was based in part on their shared investment in ecommerce, with the release stating that “both companies have proven success in bringing their brands to life through commercial licensing, affiliate partnerships, and collaborations with major retailers like West Elm, Target and Old Navy and producing premium capsule collections with, for example, Marc Jacob.”
But the corollary of that is that, in order to be one of those huge successes, you first need to be, well, huge. You need a big audience to sell to. You also need a stockpile of existing content to both demonstrate expertise and to repurpose as affiliate sales material. Hearst’s Kristine Brabson, executive director strategy and editorial insights, elaborated on this to Damian Radcliffe. Of its ecommerce growth, Brabson said “We didn’t suddenly create a bunch of new content…” Instead, the company ensured that the products being recommended on its best-performing pages were actually available for sale. It’s difficult if not impossible to do that from a standing start.
Top to bottom
Just as important as enormous scale and longevity, though, is ensuring that your ecommerce operation is layered throughout the entire operation. Meredith, for example, earned $27.7 million from its affiliate operations in Q2 this year, a 26% year- over-year increase from the same period the year before. And it did so without sacrificing any other revenue strands in service of providing the best possible ecommerce environment.
By contrast – though it has been a boon to the bottom line – the integration of Wirecutter into The New York Times’ wider business does not appear to have been quite as successful. Last month the staff of the affiliate publishing business (acquired by the newspaper in 2016) went on strike and actually urged readers not to make any purchases through the site itself. As NYMag explains: “Wirecutter was always treated as a second-class citizen, isolated in its own Slack, its own offices, and its own reporting structure under Perpich. It never joined the newsroom, and its work was openly sneered at by some long-time staffers. Many Times staffers don’t believe their work is journalism at all.”
A similar omission of an ecommerce-focused division occurred at Vice’s 2020 Newfronts. The company barely mentioned Refinery29, which pre-acquisition by Vice in 2019 had been lauded as a trailblazer for the burgeoning ecommerce space.
As with Forbes’ efforts, mentioned above, simply owning an ecommerce business does not mean that you can take the full advantage of the ecommerce boom. It has to be threaded through the entire business, treated as an integral offering, and allowed access to the entire breadth of the media company’s content. That’s what empowers Future’s success.
The reintegration of platforms
So where does that leave the media companies without the scale to own a vertical or the ability to build ecommerce through the entire business? One early clue comes from LadBible’s recent foray into the space in partnership with TikTok for a two-day “live shopping event”. Sam Oakley, director of social video at LadBible Group, said: “We are always looking for new ways to entertain and give our audience new things to discover and experience. We are proud to work together with TikTok and look forward to seeing our community enjoy a virtual shopping experience.”
While those of us with memories of over-reliance on platforms may balk, the reality is that ecommerce and affiliate revenue already rely in no small part on Amazon and other retailers. It is a growth industry not just for the newspapers and magazines, but for all players. You only have to look at the sheer amount of investment platforms as varied as Snap and Pinterest are putting into their ecommerce tech to spot their intentions are the same as media companies’. In many ways they are outpacing those publishers mentioned above: Pinterest now automatically updates products that are sold out with those that are available. But those publishers do have something platforms can’t replicate so easily – a history of curation and recommendation. Trust, basically. Provided we recognize the value of ecommerce and don’t shunt those teams to the side, we might not end up with the power imbalance between publishers and platforms that we did with advertising. Long may that growth con