E-commerce businesses readily invest in content and editorial teams these days. Now publishers are returning the favour in pursuit of financial diversification.
New Zealand’s Stuff and the U.K.’s Dennis Publishing showcased that latter development Friday at INMA Media Subscriptions Week 2.0 in Stockholm. In the process, they gave 285 media colleagues in attendance a primer on why and how e-commerce can be another reader revenue strategy.
“I do see a fundamental trend in e-commerce businesses really investing in content and in editorial teams,” said Dennis’ Nick Flood, managing director for digital. “Amazon does it, Tesco does it, all the big, big online shopping brands do it because they want to drive users, and that comes from organic search.”
“So you’ve got all these commerce companies moving into editorial, and you’ve got all these big editorial companies moving into commerce because they need to diversify,” Flood added. “The digital ad ecosystem is particularly tough at the moment. So to have a business model that is immune to those kind of hostilities is really important.”
Dennis is an independent U.K. publisher that has launched some of the most successful men’s lifestyle magazines including Maxim, Stuff, and Blender. It has a particular concentration of titles in its current stable all about automotive. So now the company is leveraging its audiences in that area to sell, finance, and warrant used cars to end customers with its buyacar.co.uk.
“But you need the right skill sets to get into e-commerce,” warned Mitchell Mak, Stuff’s head of project management. “You have to go and get the right people to be able to put these companies together.”
“I wouldn’t begin to understand how you would set up a telco business, for example, but you need people who can do that for you,” he told the conference audience. “You get them from other companies and you bring them in and you say: This is what we want to do. Are you on board?”
Stuff started as a news Web site based in Wellington, expanded with its Neighbourly hyperlocal digital platform, and now provides its customers with electrical service, fibre-optic Internet access, and even health insurance. Stuff is part of Fairfax New Zealand Limited.
Mak said his media house evaluates every potential new venture against an analysis of the average revenue per user, called the ARPU model: “Our angle on recurring revenue is that we don’t necessarily want to depend on the simple exchange of content for revenue as a whole. And we have tried to look through different lenses and different approaches to monetise our audiences as we navigate through what we’re navigating through as media companies today.”
He advises publishers to solve for growth, not for survival.
“Growth means trying to do things other people are not doing,” Mak said.
It is important to Dennis’ strategy that everything they do be based on their core expertise as a media company, Flood said.
“Like all big publishing companies, and small, actually, editorial is absolutely at the heart of what we do,” he said. “We kind of went on our transformational journey over the past five years to really start to identify why our journalists are actually writing their content.”
When Dennis looked more closely at its host of car magazines and online sites, the company realised is was missing a bet.
“We’re pretty good at this stuff,” Flood said. “We’ve got a about five or six brands in automotive that cover the entire lifestyle of ownership.
“But for years, what people have been doing is coming to our Web site, deciding which car to buy, and then going off to a dealer, going off to a manufacturer direct, going off to a supermarket or physically visiting somewhere. We were just missing out on all these sales, coming through us every single month, which kind of wasn’t good enough.”
So the company purchased buyacar.co.uk and started sticking with their customers through the entire process.
“Fundamentally it’s content marketing that’s attracting users to our site that align with our core pillars,” Flood said. “Fundamentally what we’re trying to do is get a user to engage with a piece of content and then complete an action.”