Imagine if George R. R. Martin had written the David and Goliath myth. The Philistines would have won a decisive victory and David would have just been a thin paste on the ground.
So in reality, which is so much crueler than Martin even on a good day, the stronger competitor wins 99 percent of the time. And while much of the narrative around media at the moment is the plucky underdog story of international multimillion dollar media companies taking on international multibillion dollar media companies for control of digital advertising, another threat lurks nearby.
Growing ecommerce and affiliate revenue is a priority for the majority of publishers. Less than a third of respondents to our State of the Media 2017 report said they didn’t have plans to enter the ecommerce world, and who can blame them when it is estimated that nearly 15 percent of the $22+trillion global retail sales will come from ecommerce by 2020.
Recent retail giant results bear that out, with Walmart reporting positive organic growth in that area. Via AdAge:
“E-commerce actually accounted for more than half (0.8 points) of Walmart U.S. comp-store growth as sales soared 63%, more than half from organic growth of Walmart.com rather than acquisition of Jet.com or smaller deals.”
At the moment, many publishers are still getting their ducks in a row to be best able to take advantage of their prominent position for ecommerce purposes. Many are still building out their proposition by figuring out the best way of connecting their content to a retail opportunity, to, as we put it in our report, “move readers from inspiration to transaction”.
BuzzFeed, for instance, which has been focusing on building an ecommerce proposition from last year, chose to build a store on its own platform rather than go solely through third parties. Its then-head of commerce Tessa Gould explained at the time:
“We wanted to have full control to experiment and figure out what worked best for our company and customers so as a result we felt that building out our own site on Shopify best fitted our needs. That’s not to say we won’t sell elsewhere in the future; we’re always looking into selling on other platforms and re-evaluating our strategy as we build it out.”
Nor is ecommerce the preserve of the digital pureplays.
— Fiare (@FiareOy) February 21, 2017
Future Publishing has been seeing notable success with its endeavours, with revenue from ecommerce rising by 72 percent YOY in its latest published results to £4 million (and an impressive operating profit of £41 million for the same period).
The NYT’s acquisition of The Wirecutter back in 2015 is similarly bearing fruit, with it attributing a $5 million increase in ‘uncategorised revenue’ largely to that purchase.
The Telegraph, too, is betting big on ecommerce. The success of its travel ecommerce platform is largely responsible for its belief that ecommerce will outstrip advertising in terms of revenue generation within three to five years.
Dennis Publishing, too, have been early exponents of the potential of ecommerce, pointing to the progress of buyacar.co.uk from experiment to significant revenue generator as how to do ecommerce right (it also has other ecommerce propositions). Its chief executive James Tye has previously told us:
“We are not going to try to compete with Amazon. It just feels like a very hard game. We can either do a small amount of high-value transcations or loads and loads of low value ones – we are definitely doing the former.
“We’ve got a big audience of in-market car buyers; I think we worked out that if someone is buying a car in the UK two-thirds will visit one of our brands. That’s really significant because we can monetise that at a higher rate.”
What do all those ecommerce strategies have in common? They all sit in relatively narrow verticals, in which the expertise of their editorial content can both influence and create purchase intent. They are also all for relatively high-value transactions – holidays, tech products, cars – in which the publisher’s don’t have to compete with the giant ecommerce platforms like Amazon.
Publishers aren’t stupid – they know that going up against the Goliaths of ecommerce to sell low-value items at scale just won’t work. That’s doubly true as those giants begin diversifying their own product lines, stepping on the toes of other organisations who previously been well-entrenched in those verticals.
So, just as publishers are finding that niche publishing areas are the most resilient and least likely to be disrupted, their ecommerce strategies are developing along the same lines.
Image courtesy of Hitchster via Flickr, used under a Creative Commons license.