E-commerce is the future of publishing.
The days of huge advertising revenues carrying publishers around the world are over. Ad-blocking rates are booming, people are disengaging from ads that make little effort to resonate, with them on a personal level, and the net result is publishers in urgent need of fresh revenue streams.
It is by no means the only alternative revenue stream open to publishers, but it is one of the most lucrative if they get it right. An entire new class of publishers have sprung up since the 2009 crash solely based around e-commerce: Refinery29, Gizmodo and The Wirecutter have all built their editorial brands on the influential role they play in the purchase cycle. And unlike more traditional counterparts, they’re earning dollars every time someone clicks on a link in their article and makes a purchase on a retailer’s website.
These publishers have embraced affiliate marketing and comtent (commerce-related content) as a key strategic initiative for the future. By monetizing their content, they get around the intrusive nature of advertising, capitalize on the influential role they play in starting purchase journeys, and create content their audience cares about.
The virtuous cycle of writing comtent means that your entire process refines from the start: You can see what products deliver better conversions, which merchants drive best earnings per click and understand what your audience loves to shop for. You then create content around those products and brands, the audience engages with it because they show high brand affinity for those retailers and as a publisher you earn commission on sales you drive.
So where does native commerce into play?
Native commerce means different things for different people. From our perspective, if you’re talking about native commerce you’re talking about publishers developing their own retail offerings.
There is a logic behind this too.
If publishers can influence purchase decisions by writing about products they know their audience are interested in, why shouldn’t they own the entire purchase journey and fulfil transactions too. It holds potentially the best rewards of any alternative revenue stream out there and publishers should be uniquely well placed to sell products to their audiences.
Publishers with specialist audiences have seized the opportunity. Dennis Publishing, the UK’s sixth largest publishing house saw its revenue jump by almost £40m since 2009. That growth, in a market where publishers revenues are seen to be falling, can in part be attributed to its direct retail efforts: In 2014 Dennis purchased online car dealer BuyaCar. They now sell 200 cars a month and the dealership drives 16% of the group’s total revenue.
Other publishers haven’t seen the same success however. Take Hearst Magazines for example. Esquire US launched an e-commerce partnership with J.C. Penney in November 2011 and had closed it by January 2012. In 2013, Refinery29 which has since found success with comtent, abandoned its pure commerce efforts as they were only delivering 5% of revenue.
Hearst has since found success with Harper’s Bazaar offshoot Shop Bazaar but, this took time, and Carol Smith, who developed the business plan for Harper’s Bazaar is clear that lack of e-commerce experience delayed progress, “We were missing that element. We went to build before we understood.” She also acknowledges that the bulk of Bazaar’s revenue still comes from advertising. Across the industry publishers are also keeping quiet about the revenues their native commerce efforts are driving.
Clearly publishers can, and are making a success of native commerce, but it is time consuming and takes up a lot of resources. Lack of e-commerce experience is also frustrating progress, as publishers are often from scratch developing their own offerings, in a highly competitive landscape dominated by brands who already have established businesses. To put things simply, producing great content is quite different from managing inventory and a lot of publishers end up dramatically underestimating how big of a distraction they are signing up for.
Comtent gets around this
Comtent simply takes publishers strong suit and adapts it to capitalise on the lucrative opportunity e-commerce presents. The end goal may be driving a sale for a retailer, but overall the same is any non-monetising article: Engage the audience with captivating copy that drives traffic and shares. If a comtent post is engaged with strongly, that engagement will naturally turn into sales, as people will be arriving to find out about products, research brands and discover up and coming retailers who sell products that match their interests.
Entire brands have grown up around this, but the real advantage of comtent over native commerce is that publishers who don’t have a niche audience can still write and create comtent. Look at The Financial Times. It has reaped the e-commerce rewards of transforming its How To Spend It supplement into a dedicated comtent site. The Wirecutter, which generated $150 million in e-commerce revenue in 2015, was purchased at the end of last year by The New York Times because of its “service journalism”.
For the future it’s clear that e-commerce is going to matter and as publishers are forced by advertising’s decline to seek new revenue streams it will only become more prominent. Where native commerce requires learning an entire new business, means fierce competition from far more established rivals and crucially significant investment of time and resources, comtent is simply a pivot of existing editorial practice. You can use the same staff, doing the same work as writers they always have and have a virtuous cycle where through time you’ll be producing content that delights your audience and drives sales for retailers. With publishers facing a world of challenges on all fronts, comtent will be a key part of securing success in 2017 and beyond.