Got commerce? Enthusiast publisher F+W grows emedia store business 113%
F+W Media has leveraged the power of the community – or communities in its case – to carve out a high-growth e-commerce business. Its 21 e-stores – selling everything from books, CDs and DVDs to workshops, calendars and, increasingly, affiliate products – helped the publisher grow its e-commerce revenues by 113% in 2009.
The growth stems from a business makeover initiated by David Nussbaum, a former Penton Media CEO who was named chief executive of F+W in January 2008. Since then, Nussbaum and his management team have restructured the organization around F+W’s enthusiast and professional communities – writers, artists, designers, antique collectors, construction professionals and 11 other groups – instead of by channel (magazines, events, commerce). The company has lessened its dependence on advertising by re-focusing development efforts on products over websites. It even changed its name, from F+W Publications to F+W Media.
'Extremely profitable' e-commerce business
The result is what Nussbaum calls an “extremely profitable” e-commerce business. Print and online advertising revenues now make up just 14-15% of the company’s total sales, while commerce (online and offline) accounts for close to 80% of total revenues.
“When I started here , our emedia group was really focused on aggressive Web development around the magazines to build traffic and attract advertising,” Nussbaum said in an interview. “But as an enthusiast publisher, we would never aggregate the kind of traffic needed to compete with the big boys. And I also believed that advertising was becoming a commodity.”
The restructuring, not surprisingly, required new roles and new hires – along with some layoffs and some high-profile departures, including, most recently, Print magazine editor in chief Emily Gordon.
Nussbaum says the company has been hiring aggressively to ramp up its commerce efforts, recently bringing on board a new director of commerce, a partner/affiliate manager, and an email list manager. It recently formed an audience development group and is currently seeking in iPhone app developer and a Web analytics expert. Increasingly, the company is looking beyond the publishing industry and bringing in people with online retail experience.
“The Web development team is now focused on developing best-in-class e-commerce channels rather than websites with lots of pages to sell advertising on,” Nussbaum said.
The editorial teams have had to adapt to changing roles as well.
“We try to educate our content teams that in the Web world, it’s no longer a pure separation of church and state,” said Nussbaum. “If you can do product reviews, and link to where readers can buy those products, that’s what audiences want.
“Some of our content people immediately understand that. Others need more education. And others just don’t want to play that game and move onto something new.”
More than just a store
The combination of content and commerce expertise has enabled F+W to create unique audience experiences in its e-stores, Nussbaum said.
“These are not classic e-commerce stores,” he said. “You can shop, read blogs, join a message board, swap goods. We have fully baked communities, offering a lot more to the shopper than we ever did before.”
Nussbaum’s current priorities include growing F+W’s partner and affiliate program in order to expand the scope of the merchandise it sells. In addition to providing books and other resources for hobbyists, it hopes to provide a full spectrum of related products – for example, paints, easels and other supplies for artists. “We want to provide a full experience for the passionate enthusiast,” said Nussbaum.
Nussbaum also wants to build out the company’s analytics capabilities to understand the desires of the community better in order to develop and deliver more relevant products.
“We have hundreds of thousands of shoppers in our store,” he explained. “We know what they’re looking at, what they’re buying. We want to develop more ways to learn about what those customers are interested in. If they give us more information about their interests and hobbies, we can tailor better products to those needs. And those better products will benefit our partners, retailers and suppliers because they will improve sell-through.”
For publishers considering an e-commerce model, Nussbaum offers one piece of advice: Look at your business through a much more radical lens. “Being focused on advertising or sponsorships is not going to bring home the bacon over the long term,” he said. “You need to look at your communities in terms of commerce and connections.”