When senior media executives talk openly in the mediafutures benchmarking project, it becomes clear just how complex the reality of ecommerce actually is.
Firstly, the word ‘ecommerce’ can mean very different things dependent on the media sector. A B2B publisher, which has already made the 180-degree pivot to create workflow tools to replace traditional magazines and push-content, has a very different view from an events company, which is turning annual exhibitions into all-year content engines and commercial marketplaces. In turn, newspapers, which are adding vertical interest products to their core news content, are in a very different place to consumer magazines, which may have been in the business of brand extensions for years, but in an offline way.
This article will focus on B2C activity, where the mediafutures participants register that ecommerce accounts for an average 2% of turnover for consumer magazines and 1% for newspapers. Now, there are significant exceptions, where the figures are way above these industry averages – Future, Dennis, Immediate, The Guardian and The Telegraph to name a handful. Also, these industry averages are predicted to more than double over the next two years. So, this is a growth area. Yet for most media companies, the net revenues from B2C ecommerce are still way behind what the fulsome press releases suggest.
There are three basic routes to selling stuff to consumers:
1. Selling old stuff in a new way
Brand-stretching has been around for as long as there have been newspapers and magazines. Books, mugs, diaries, calendars, article reprints, insurance, holidays, live events, etc have all been sold off-the-page for years. Yet the ability now to sell them all online, both publisher-direct and on social platforms (although these still remain a controversial route which polarises publisher opinion), adds extra power and flexibility to the marketing and allows them to be flipped from one-off purchases into a recurring subscription offer or a membership bundle.
2. Selling new stuff in a new way
This is the exciting new development area, normally through affiliate deals, which takes publishers way beyond simple brand extensions into shoppable content, where the leap from an editorial piece into an actual purchase can be made online. Most publishers’ efforts are still a bit clunky and multi-step in comparison to an Amazon. And not yet as mobile-focused as they need to be. Yet this whole area is what Future’s aggressive ecommerce strategy is all about – it is interesting to watch them swoop on Marie Claire USA to roll out its UK Marie Claire Edit experience into the North American market.
3. Selling all stuff in an old way
Amazon is the main pure-play online operator, which has reversed into physical retail in its multi-channel strategy for products as diverse as books, newspapers & magazines, grocery and tech hardware. “Going multi-channel” is not a one-way street into digital. It means being wherever the consumer is. Another overlay on all is has been to extend the media brand itself into physical retail. So far, the examples have been small scale (eg. Allure’s shop in New York, Monocle’s outlets in city centres and airports), but they are all part of the multi-channel whirlpool.
So, whilst there are multiple routes to selling stuff in an increasingly wired world, the challenges to ecommerce remain significant for most publishers to execute well. Here are two big ones:
- Internal company culture, skills and buy-in. Retailing, whether physical or online, is a very different business to creating content. One of the best documented examples of a blind and poorly-planned commitment to ecommerce, which literally bankrupted the company, was F&W in the USA. Also, Condé Nast burned through a reported $100m in its Style.com disaster, where one of the issues was the fact that the editorial teams simply did not buy into the whole ecommerce strategy.
- The required tech to make it all happen. Most media ecommerce operations have had to buy in or develop in-house over several years (Future’s Hawk being an example) the tech stacks that provide both the internal processes and the low-friction consumer UX (easy payment is a boring, but essential requirement) needed to compete in the open ecommerce market, which is already filled with some very slick and well-funded companies. Also, what is not always recognised in media companies is that the fuel of any successful ecommerce operation is user data rather than content, important though content is in drawing eshoppers into the purchase funnel.
So, a few tips on the road to a successful ecommerce operation:
- Be clear what you are doing and why you are doing it. And have clear success measures along every step of the journey.
- Be obsessive about the core brand and how you can damage it by both what you sell and also by how competently you do it.
- Get buy-in from everyone within the company – not as easy or obvious as it sounds.
- Test and learn with MVPs – you simply won’t get it all right first time.
- Invest in tech.
- Invest in finding the best partners and building long-term relationships with them.
- Focus on the customer – shoppers are not the same as readers. And the UX is everything.
- Stay multi-channel – pure play online is not necessarily the be-all and end-all.
- Look either for real economies of scale or dominate your niche – getting stuck in between is a dangerous place to be.
To sum up, quality and independent content, credibility in the marketplace and a strong sense of community are all essential – and sometimes conflicting – factors in the road to profitable ecommerce.
Get it right, and the revenues will flow. Get it wrong, and you’ll wish that you’d stuck to the knitting.
Test and learn with MVPs – you simply won’t get it all right first time.
About mediafutures international: mediafutures is an annual benchmarking survey of the industry undertaken by Wessenden Marketing in partnership with InPublishing. In 2020, mediafutures went international with Colin Morrison’s Flashes & Flames and Access Intelligence in the USA as two new partners.
This article was first published in InPublishing magazine. If you would like to be added to the free mailing list, please register here.