New paths to e-commerce
E-commerce is hot, and not just for Cyber Monday retailers. Publishers are getting more aggressive with e-commerce plays that expand their digital revenue options.
Through a variety of partnerships and platforms, media companies are finding new ways to connect content with commerce. Some are building or buying their own digital storefronts; others are partnering with commerce sites or directly with retailers. This week, Martha Stewart Living Omnimedia and social commerce site OpenSky.com announced a partnership through which Martha Stewart will contribute product recommendations to OpenSky members.
MSLO is the second media partner OpenSky has landed for its roster of “influencer” brands; earlier this month, the startup announced a similar partnership with Dwell Media, publisher of design magazine Dwell. OpenSky CEO John Caplan said Dwell and MSLO are the first of what he believes will be many other media partners.
“The world’s best media brands have incredibly engaged audiences,” Caplan said in a phone interview. “Those brands influence lots of purchasing behavior – but they don’t capture any of the value. Joining us helps them build their reach because we’re a network and we offer a consumer experience that’s dedicated to commerce.” OpenSky splits profits on each sale 50/50 with its media partners.
A more seamless path to purchase
Not long ago, commingling editorial with any type of purchase offer was considered a strict church/state violation. But publishers are starting to see synergies (and revenue opportunities) in providing a more seamless path to product sales. Either through direct sales, revenue shares with retailers or affiliate fees, commerce could represent a reliable revenue stream for publishers, via the Web or, increasingly, through mobile devices.
Readers are beginning to warm up to the possibilities as well. In a recent Association of Magazine Media survey of tablet users who had downloaded at least one magazine app, 70% of respondents indicated they would be interestedin the ability to purchase products and services directly from the articles they read in digital magazines.
So how does a media company get into the commerce business? Beyond traditional affiliate marketing – which generally provides just pennies on the dollar in return – three approaches are gaining traction among publishers.
1. Sell your own stuff
E-books, print books, DVDs and CDs all represent natural brand extensions for media companies, and a handful of publishers, including F+W Media, Interweave and Success Magazine, have built decent businesses selling these types of content-related products.
E-commerce is F+W’s fastest-growing segment – in 2009, e-commerce revenues grew by 113% – and CEO David Nussbaum predicts e-commerce will be the company’s second-largest business by 2014. F+W touts a “curated consumer experience” as the key to its e-commerce strategy. This sentiment is echoed by other publishers who believe product sales are a natural extension of the trusted relationship they have established with an audience.
Success.com’s mantra, as Thomas Chafee wrote in a post here last year, was “one reader, one experience, one shopping cart.” A key part of the experience is the ability to personalize product promotions:
The foundation of this strategy was to gather every user’s e-commerce activities and history, plus e-mail preferences, personal profile, and circulation system data into a single online system. Having this data accessible in one place gave Success’s staff the ability to make informed marketing and merchandising decisions, while encouraging users to self-manage their relationship with Success.
In other words, rich audience profiles will allow you to present them with highly targeted product offerings.
2. Sell other brands' stuff
Affiliate marketing has evolved from promoting text links in a box to publishing full-blown product pages and, increasingly, peppering those pages with editorial content. Fashion magazines have taken the lead in this marriage of editorial and commerce and continue to push the integration envelope.
Condé Nast’s Style.com, for example, recently began featuring fashions from six major designers, which readers can purchase directly from the website. The “Instant Get” feature – also included in Style’s new print magazine – is enabled by e-commerce provider Edition01.
Publishers don’t need to erect a digital storefront to bring in e-commerce dollars. Premier Guitar, for example, has an affiliate program called PG Perks, through which advertisers can promote merchandise, contests or other give-aways to a 29,000-member, opt-in email group. Vendors pay Premier Guitar a sponsorship fee or a cut of transaction revenues, according to Peter Sprague, managing director of parent company Premier Media Holdings.
"A manufacturer's or a retailer's desire to sell directly to consumers is converging with the interest of media companies in providing another dimension of service to their readers,” Sprague said in an interview. “It’s also another way for publishers to monetize the revenues coming from their end users."
“The daily deals site is the next evolution of the ecommerce offerings at F+W,” Nussbaum said in a press release announcing the site. F+W is partnering on StitchSocial.com with Martha Pullen Co., publisher of Sew Beautiful magazine and a maker of sewing products.
3. Recommend other brands' stuff
Including “click-to-buy” buttons on your website is a tacit recommendation of third-party merchandise. But some media companies are formalizing these recommendations by combining traditional “editor’s picks” with direct purchase options, either on their own websites or through third-party stores such as OpenSky.
“Inspiring your fans to buy a product that you recommend is the ultimate in fan engagement,” said OpenSky’s Caplan.
This summer, Condé Nast’s Allure.com launched Beauty Product Finder, an online tool that helps visitors find the right hair, skin or makeup products for their needs. The product finder stems from a partnership with Quidsi to allow Allure.com visitors to buy beauty products directly from Quidsi’s Soap.com and BeautyBar.com properties.
The ability to purchase products from editorial content may be poised to take off through tablet devices, where early app users have come to expect a high level of interactivity. Wired featured this type of “t-commerce” option in its
June May iPad edition in a promotion sponsored by MasterCard. Product references included a “buy now” option for purchasing through Amazon.com.
Howard Mittman, Wired’s VP and publisher, said the program “has been successful from all parties’ point of view,” without providing specifics. The “buy now” option is featured in Wired’s “The Year in Gear” app that was released last week, and Mittman said Wired plans to continue to “improve and expand upon” on its t-commerce capabilities next year.
A bridge too far?
Integrating purchase options directly into product reviews or other editorial content is a bridge that some publishers are still not willing to cross.
"We do gear reviews, but we never recommend products,” said Premier Guitar’s Sprague. “We continue to believe in a major wall between church and state. Reader trust is the only real foundation for any sustainable media enterprise."
Caplan counters that a third-party site such as OpenSky provides an important buffer between a publisher’s editorial and the products its editors recommend. “By using a commerce network, publishers don’t complicate the editorial relationship they have with an audience on their website,” he said.
Elle magazine (which Hearst Magazines acquired from Hachette Filipacchi in June) adopted this approach through a partnership with luxury shopping site Rue La La. An Elle-branded channel on the site features editor-selected “private sale” boutiques.
Similarly, Hearst’s Esquire partnered with J.C. Penney this fall to launch CLAD, an online site for men’s fashion that includes a “daily endorsement” from Esquire editors as well as a section called “Damn Good Advice.” In a blog post introducing the new site, Esquire Editor in Chief David Granger said the retail site will also include “seasonal sales timed to topics in new issues of the magazine and editorial features on Esquire.com."
“We hope that this will be the beginning of something new for magazines,” Granger wrote. Esquire, he added, makes recommendations “many times in each issue — what to watch, what to drink, new ways to get dressed in the morning — and we share with you what we and our experts like. But … we left it to you to make the leap from the page of the magazine to finding the item in a store. With CLAD (and with the help of Esquire.com), we want to … make it easier for you to investigate and then purchase the things that catch your eye or meet a need.”
[UPDATE: JC Penney pulled the plug on CLAD in January 2012.]
Whichever approach a publisher chooses to take, the goal is clear: Sell more stuff.