Dan Eldridge 2014-10-17 00:59:16
Publishers of all sorts are attempting to broaden their revenue streams with ecommerce initiatives, using high-quality editorial to drive retail activity. We’ve been using the internet to tell stories for 20 years now, and for nearly as long publishers have also been using the internet to grow revenue by selling ancillary goods: from T-shirts and coffee mugs to niche enthusiast and B2B products. But in the last three to five years, the worlds of content and commerce have combined in ways rarely seen before. It was in May of 2010, for instance, when the New York City-based digital media company Thrillist announced its acquisition of JackThreads, an online retailer offering stylish clothing and accessories for young men. Today, more than half of Thrillist’s revenue comes from retail, and the company expects that figure to eventually reach 80%. More recently, the collaboration of content and commerce seems to have become almost par for the publishing course. In late 2013, the beloved shelter magazine Domino, which had ceased publication some five years earlier, surprisingly resurfaced as both a print magazine with a $12 cover price and a website, domino.com, featuring ‘shoppable’ articles. And in August 2014, an ecommerce platform known as BeachMint famously partnered with Condé Nast to take over all operations for the shopping magazine Lucky. Clearly, ecommerce is already well on its way to becoming the publishing industry’s next great hope—a revenue-generating lifeline for publishers who can no longer survive on ad dollars alone. And yet regardless of the increasingly large numbers of publishers—print and digital alike—that are now experimenting with online retail, it’s also clear that no singular ecommerce model has yet emerged. We recently spoke with a number of publishers, many of which are gravitating toward relatively hands-off affliate ecommerce programs powered by strong editorial voices and curated consumer goods. Food & Wine: Thanks to the Time Inc. acquisition, unique collaborations with ecommerce at their core may become business as usual at F&W. It’s easy to assume that Food & Wine, the 36-year-old culinary lifestyle magazine, would be an ideal platform from which to execute any number of potentially lucrative ecommerce plays. Both its editorial and ad pages are packed with high-end housewares and kitchen gear, for instance. And its readers’ median personal income is just north of $82,500, according to the magazine’s 2014 media kit. But according to publisher Christina Grdovic, Food & Wine was unusually restricted where ecommerce was concerned during its existence as an American Express Publishing title, due in part to the challenges of being owned by a bank. Thanks to the 2013 acquisition of American Express Co.’s publishing arm by Time Inc., however, that scenario has since changed. “I think there’s going to be a lot more exciting partnerships coming down the pipe,” says Grdovic. “We’re super, super excited about the [acquisition], because we think [ecommerce] is going to be way easier than when we were part of American Express.” Indeed, F&W has already embarked on new ecommerce partnerships. The most recent is a unique affiliate partnership with Mouth.com, a New York-based online purveyor of artisanal foodstuffs ranging from dry-cured maple bacon to raspberry plum jam. Known as Food & Wine Selects, Grdovic explains that her editors played a major role in the collaboration, single-handedly selecting over 60 of Mouth.com's "must-have foods you've never heard of" in specially curated batches of 21 items each month. The relationship largely came about, Grdovic says, because of F&W editor- in-chief Dana Cowin's fervent passion for the Mouth.com brand. In an effort to drive epicurean readers first to foodandwine.com and then to Mouth.com, a full page in the first signature of the magazine's October 2014 issue advertises the partnership. "And then we get a piece of that revenue," Grdovic explains, "based on people coming through our site." Empowered by new Time Inc. ownership, F&W has also opened its doors to licensing deals with consumer products that match its editorial purview. To that end, F&W launched The Food & Wine Collection for Gorham, a tableware and cookware collection that features three distinct dinnerware sets available exclusively on Amazon.com from September through December 2014. Beginning in 2015, they'll appear on other ecommerce sites and in select brick-and-mortar stores. "The Gorham partnership started as a good ol' fashioned advertising deal," says Grdovic. "We were talking to our friends at [Gorham parent company] Lenox, and one thing led to another in the brainstorming of ideas." With themes such as the Scandinavian-inspired "Modern Farmhouse" collection and a party-inspired set of dishes known as "The Entertainer," the high-concept products were designed to help home cooks plate food with the same skill and accuracy as professional chefs. According to Grdovic, the partnership was structured as a licensing deal, with the F&W editorial team consulting on the product's design and Gorham producing the items and executing the sell-through. Though not a strict ecommerce endeavor, it goes to show the synergy that robust, content verticals and allied consumer brands can achieve. Both of the current F&W partnerships, Grdovic says, were intentionally launched during the year's fourth quarter. "The fourth quarter is a great time to determine whether it's going to be successful, and whether we're going to move forward or not," she says, "because that's when people are doing a lot of shopping." "I think partnerships like these are incredibly important," she adds, "because everyone—not just in publishing— is always looking for new revenue streams. And second, I think our most important assets, at magazines and media brands in general, are our editors. There's so much choice in this world now that you want somebody to narrow it down for you. And I think you can't beat getting it narrowed down by an expert in whatever that field [may be.]" Refinery29: Refinery29 may appear to be a fairly standard online fashion and lifestyle publication for the millennial-minded reader. According to Patrick Yee, the publisher's EVP of marketing and strategy, "R29 is a brand and a destination that's built for a creative and sophisticated millennial girl, and it's one that's really focused on independent and emerging perspectives." In other words, R29, as the site is often referred to, covers the type of cutting-edge style trends and designers that aren't often profiled in the mainstream style media. And yet in 2013, Refinery29 was named by Inc. magazine as the fastest-growing media company in the U.S., with annual revenue of $29.1 million. On this year's recently-released Inc. 500 list, Refinery29 scored a respectable ranking of327, with its three-year growth listed at over 1,400%. Contributing to that growth is the site's ecommerce model—which has gone through two different iterations— now based almost entirely on affiliate sales. During Refinery29's earliest days, the site handled its ecommerce by partnering with painfully hip fashion retailers—Rebecca Minkoff and Opening Ceremony were two such accounts— and offering those merchants' goods through a native ecommerce platform. But even though the "marketplace model," as Yee calls it, was generating revenue for all parties involved, and even though Refinery29 didn't handle the fulfillment end of the sales (products were drop-shipped from each respective retailer), the challenge of customer service was nearly insurmountable. "To the consumer," says Yee, "the customer support issue always goes back to whoever captured the credit card information. For us, that position of being the middleman [was] just not a highvalue position to be in." Refinery29 has since returned its focus to what Yee says the site has always done best: discovering unusual fashion and lifestyle products, and then sharing those discoveries with readers through a revolving door of high-quality content. "That's always been our approach at Refinery," says Yee. "It's about being able to tell the stories behind products: why they're interesting, why they're not, why we love them, why we don't." Refinery29's distinctive editorial point-of-view is matched with an affiliate-based ecommerce approach: Links to certain products within the site's content take readers to outside ecommerce portals where those items are sold. Refinery29 earns a share of each sale it refers. Yee likens the affiliate program to a casual shopping trip at the mall. "It's less about whether you buy something, although you probably will," he suggests. "[And more about] being able to have an entertaining, and really cool and inspiring experience. We consider that more 'shopping' than 'commerce.' Commerce," he says, "has a goal of trying to get you to check out, whereas shopping has a goal that's more discovery and entertainment based." Today, affiliate sales account for less than 10% of Refinery29' s overall revenue. That may sound like small potatoes, but Yee points out that the site's affiliate revenue has actually doubled every month since January 2014. And with 12 million unique visitors consuming Refinery29's content on a monthly basis, it's not difficult to imagine how quickly those dollars and cents add up. The remainder of Refinery29's revenue comes from a mixture of traditional display advertising and content marketing style partnerships with brands whose products are covered prominently in the form of clearly-labeled sponsored posts. Yee also points out that every product featured on the site is first approved by the editorial department, and that some shoppable products aren't even a part of the site's affiliate structure. In some cases, says Yee, Refinery29 simply links to products that its editors love. "This broad approach of creating discovery around as many products as possible," says Yee, "versus digging in and trying to sell just a few, has been really, really rewarding for us." Verily: Monetizing a curatorial model of affiliate sales, with an eye on the future When Verily magazine launched in summer 2013, it had the distinctive look and feel of a mainstream women's fashion and lifestyle glossy, but with editorial that was distinctive in the sensitive way it treated women's concerns. The print magazine was initially funded by an angel investor, says co-founder, editor-in-chief, and publisher Kara Eschbach, although financial pressures led to Verily s reorganization as an online-only model after the release of just three issues. "Obviously, ads are a very different world [in online publishing]," says Eschbach, "So we're always looking for different ways to augment revenue. And one of the [topics] that continually comes up is, 'What's the right way to do commerce?'" For the time being, Eschbach has settled on a fairly standard affiliate model for the site. On Verilys fashion and beauty vertical, a fair portion of the clothing and accessory items that are enthusiastically covered by the site's writers are also clickable and available for purchase. Some of those purchases are executed traditionally, through an outside retailer's ecommerce platform. Verily also works closely with a plug-in web tool known as rewardStyle, which allows digital publishers to easily link to numerous ecommerce sites, and to earn a small commission whenever a reader makes a purchase. The affiliate model works especially well for Verily, Eschbach says, because as a site focusing on women's fashion and lifestyle, its mission largely revolves around bringing specific products to the attention of its readers. "The things that we're [covering] in our editorial," Eschbach says, "we're recommending that people buy [these products] anyway. And in an online environment, we have an opportunity to use an affiliate arrangement to also monetize that." The Verily site also has its own dedicated shopping section, the appropriately-named Verily Shops, where only products with affiliate links are displayed—there's no content to speak of. Eschbach describes the section by comparing it to a more convenient version of the 'Where to Buy' pages that often appear in the back of fashion magazines. We're curating the things [our readers] want to be buying anyway," she says. "So we approach it from that perspective— leveraging the things we're already doing editorially to take advantage of commerce." Nevertheless, Eschbach says that Verily has considered the possibility of developing its own native ecommerce platform. "We don't love the fact that every time someone clicks on a product they navigate away from our website," she says. Verily has also looked into services such as those offered by 72Lux, a universal checkout technology platform that allows affiliate sales to be conducted within a shopping cart that is natively integrated into a publisher's website. "I really think the next step in affiliate," Eschbach says, "is not having to go to 15 different websites to do affiliate transactions, but to be fulfilling it from the publisher's site.' Keep: The ecommerce service that makes everything shoppable, including entire print magazines The web service and mobile app known as Keep, which launched online in October 2012 and on iOS one year later, is probably best described as a "Pinterest for products." Head over to Keep.com and you'll find a cascading page filled largely with images of stylish clothing and accessory items for women: everything from handbags and racerback bras to stiletto heels and sunglasses. Keep currently operates as a consumer-facing business that offers no B2B services, although its model is nevertheless one that publishers with an eye on increasing their online retail revenue would be wise to closely consider. Last year, for instance, in an effort to broaden its base of customers, Keep used proprietary software to turn an entire print issue of InStyle magazine into something of a shoppable catalog. Keep didn't charge for the service, says co-founder and president MaryAnn Bekkedahl, who has nearly two decades of publishing industry experience. It did, however, collect revenue after InStyle informed its readers via social media that every last item in its magazine could be purchased through Keep's online ecommerce portal. Earlier this year, Keep created the very same service—again, without charging—for the September fashion issues of a number of women's magazines. "The thing that makes us attractive to work with for a publisher," says Bekkedahl, "is that any product— from any retailer, anywhere on the web—can be posted into Keep." And while no magazine has yet seized the opportunity, Bekkedahl has even offered publishers the option to monetize sales by curating items into the Keep platform and adding their own affiliate links.
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