In the fast changing landscape of digital media, news media organisations are increasingly beginning to look at innovative, new revenue streams to supplement what might be termed as “traditional” advertising streams/models. 

Content commerce seems to be an interesting line of thinking, offering news media companies a new source of advertising revenue while enhancing their user engagement.

Today’s newsletter dives into the opportunities and considerations associated with integrating content commerce into the advertising business models of news media companies. I also include a mention of what is happening in some of the tech giants out there and their need for (ad-supported) revenue diversification. Is that a lesson for us?

And with advances in AI, maybe we are limited only by our imagination?

What is content commerce? 

Content commerce for news media companies is the monetisation of digital content through direct sales of products or services integrated with editorial content. In essence, it’s a modern, smarter way of rejuvenating what used to be called “reader offers.”

This strategy aims to enhance the user experience by (seamlessly) incorporating relevant offerings (for sale) within the content and creating an additional revenue stream beyond traditional advertising. 

Media companies can leverage affiliate marketing, e-commerce partnerships, or even develop their own products to diversify income streams whilst providing added value to their audiences. 

It’s important to make a balance between the commercial elements and maintaining the integrity of anyeditorial content around it to ensure continued audience engagement and trust.

In developing a strategy for content commerce, there seems to me to be seven major factors for consideration:

1. Diversification of revenue streams: News media companies often rely heavily on advertising revenue, leaving them vulnerable to market fluctuations. Content commerce presents a chance to diversify income sources, reducing dependency on a single, limited or existing revenue streams. By strategically incorporating commerce elements within their content, media can tap into the e-commerce market and generate additional income. 

2. Monetising audiences: Content commerce allows news publishers to monetise their audience directly. Through affiliate marketing (in simple terms, earning a commission by promoting other companies’ products and services), partnerships with e-commerce platforms, or even developing proprietary products, publishers can earn commissions or direct sales revenue. This model aligns with the evolving consumer behaviour of seeking convenience and instant access to products or services. 

3. Enhanced user experience: Integrating commerce seamlessly into news content can enhance the overall user experience. Users are more likely to engage with relevant products or services that complement the news they are consuming. This approach not only adds value for the audience but also provides a more holistic and immersive experience, potentially increasing user loyalty. 

4. Affiliate marketing strategies: Media companies can leverage affiliate marketing by strategically promoting products or services related to their content. This involves partnering with e-commerce platforms and earning a commission for every sale generated through their referral links. It perhaps goes without saying that a careful selection of affiliates is important to maintain trust and relevance with the audience. 

5. Developing proprietary products: Some news media companies may choose to develop their own products or services, ranging from subscriptions to merchandise. This requires a real understanding of the target audience(s) and the creation/showcasing of products that truly resonate with their interests. Successful implementation can lead to a loyal customer base as well as recurring revenues. 

6. Considerations and challenges: Two I’d recommend:

• Balancing commercialisation: Striking a balance between the commercial elements and the journalistic integrity is important. Media must avoid any compromising of the trust and credibility they have already built with their audience. It can sometimes be a fragile balance.
• Regulatory compliance: Content commerce may be subject to various regulations, depending on the country, such as affiliate marketing disclosures. News organisations must always stay well-informed and compliant to avoid down-the-road legal issues. 

7. Technology integration: Implementing content commerce effectively requires seamless integration with existing technology platforms. This includes user interfaces, payment gateways, and analytics tools to track performance and optimise strategies.

Tech giants’ ad-supported venture (aka: the need for revenue diversification)

I recently looked at the current global economic situation and how that has affected news media companies. It shows us that revenue/monetisation diversity remains a main priority. 

Most interestingly, I notice that, post-COVID, we’re seeing an increasing number of Big Tech players experimenting with new ways to monetise their audiences. 

I read recently about Netflix’s first anniversary (in November this year) of having ads on its platform. Since launching their ad-supported streaming option back in November 2022, Netflix has obtained around 5 million monthly active users. 

Netflix CEO Greg Peters said more than 25% of sign-ups, in territories where ads were an option, had taken up the “ad-supported” option — no doubt due to the lower cost. But it goes to show in this time of cost-of-living crises that there is a fine balance and trade-off between value offerings and household budgets. 

And, while Disney+ followed Netflix’s lead, Amazon says they are waiting for 2024 to introduce their ads to Prime. But it’s coming. 

And isn’t it interesting that ads will remain crucial to the future?

In a time where some think advertising can be too intrusive, irritating, even dying (in some people’s minds), I happen to believe that advertising (in digital and in many cases print, too) is very much alive and well. It’s perhaps entering in a new phase in that it needs fresh thinking, more creativity, more dynamism, new skills, and maybe a new positioning as to how we view print — is it becoming an important showcase to other platforms, for example? 

The point is, advertising most certainly is not dead — but it does require a new approach. 

The need to diversify is there (as we see above with Netflix, et al), and we as media companies can take a lesson from this: new thinking, new offerings, new revenue streams. 

Especially with the advances in AI, we are now perhaps able to discover the power of AI personalisation, Web site optimisation, direct-to-consumer models, and operational excellence. 

We will be able to leverage AI for personalised customer experiences and increased conversions, optimise Web site speed and performance for higher engagement and sales, and understand the direct-to-consumer trend fully and its impact on building strong customer relationships, as well as unlocking the potential of marketplaces and social selling for expanded reach and sales opportunities. 

This will all allow us to stay ahead of the competition and deliver exceptional customer experiences in the fast-paced world of online retail.

Maybe all this shows that content commerce is just one of the ways we can secure our future.

Further reading/viewing

• Commerce content: What it is and why it works.
• Content Commerce: Getting It Right.
• New ad revenues opportunities include audio, influencer advertising, commerce (a recent blog from my INMA Advertising Initiative).

About this newsletter 

Today’s newsletter is written by Mark Challinor, based in London and lead for the INMA Advertising Initiative. Mark will share research, case studies, and thought leadership on the topic of global news media advertising. Sign up for the newsletter here.

This newsletter is a public face of the Advertising Initiative by INMA, outlined here.

E-mail Mark at Inma.mark@gmail.com with thoughts, suggestions, and questions or follow him on Twitter (@challinor).

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