Want to see some disruption? Forget about who you thought was in your competitive set – ecommerce brands are succeeding in monetising audiences in ways that are out of reach of publishers.
In the fashion space, ASOS and Net-A-Porter are trying to eat your lunch by claiming the one thing that previously made magazines valuable – relationships with engaged audiences who are willing to buy things. Only for ecommerce players, the journey from page to screen to online checkout is much shorter.
ASOS this week released its results for the first half of 2013 and these stats show how it’s competing with publishers:
— Huge audience: Unique visitors to ASOS Group sites in February were just shy of 20 million, up 27 percent on last year. Total visits were 55.5 million, up 31 percent.
— Active customers: ASOS has 11.1 million registered users of whom more than six million are “active”, meaning they bought something in the last year.
— Mobile future: One third of ASOS’s traffic comes from mobile and tablets – supposedly the saviours of the magazine industry – and the company is set to launch an Android app and revamp its iPad and iPhone apps soon.
— Social media: ASOS has 2.3 million Facebook likes, almost half a million Twitter followers, and 1.5 million +1s on Google Plus.
But ASOS also does media: its free printed magazine circulation of 456,000 makes it the 18th largest in the UK, immediately behind Glamour and Closer, and just a handful of places behind New!.
Magazine publishers like to say that paid-for titles have more heft with advertisers, which may be true – but it doesn’t matter that ASOS’s mag isn’t actively purchased. ASOS is advertising itself.
The ASOS website shows an even clearer example. It may be designed to sell clothes, but it’s heavy on the content side. It’s got fashion news, suggested outfits and music videos.
Magazines are meant to be stepping-stones to consumer purchases – ASOS would rather you just passed go, consumed their content and gave your £200 directly to them.
That approach is contributing to strong financials. In H113, profit before tax was up 11 percent year on year to £25.7 million on revenues of £359.7 million, up by a third on the same period a year earlier. Its gross profit margin is also up, riding at just under 50 percent.
ASOS spent £20 million on marketing in those six months – largely to acquire new users in China, Russia and around the world, a key objective for this year.
Selling access, not journalism
Most publishers think they are selling journalism. Few are and few ever did. If your publication is dependent on ads – you’re selling your audience.
And you can see this realisation dawning on many of the big magazine publishing brands.
Take for instance Bauer’s recent launch of an iPad version of Grazia with the ability to buy products featured in the magazine from within the app. Or Conde Nast’s investment in ecommerce website Farfetch. They’re trying to redefine themselves as a key link in the chain between consumer and seller.
The killer question is this: can publishers do ecommerce as well as ASOS can do content?