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The rise of direct e-commerce offers media a smart revenue path

By David Jeremias Vogt

Tipser

Stockholm, Sweden

The media industry currently is undergoing one of the most significant periods of change in its history. The technological age in which we live has propelled the parallel rise of digital publishing, which has enabled new formats and technological possibilities that are completely reshaping how the mass media communicates and interacts with its audience.

2020 was not an easy year, but it taught us many important lessons. Perhaps one of the most important was that the news media in all of its forms is as crucial and necessary as it ever has been. In times of crisis, people need and turn to independent quality journalism.

At the same time that the media industry’s importance has been reaffirmed, the digital publishing landscape is changing rapidly. Many publishers are facing significant challenges, and the very fundamentals of media economics are evolving, too.

Direct e-commerce is a solution for diversifying income and moving away from an advertising-led strategy.
Direct e-commerce is a solution for diversifying income and moving away from an advertising-led strategy.

One of the biggest drivers of change is the increasingly unequal distribution of the advertising sales market. Additionally, the onset of the COVID-19 crisis massively accelerated the slow but imminent downfall of the advertising-focused revenue model for publishers. In this post-advertising world, media companies need to find new ways to earn revenue.

Experts see the key to answering these challenges in the diversification of income and the move from an advertising-led to a more consumer-focused media model. Direct e-commerce offers a solution to both approaches.

Publishers can now sell to their readers directly from their publications and content. This allows them to build a resilient new revenue model, separate from ad sales and affiliate networks. Additionally, this approach creates an opportunity to better engage with readers and foster brand loyalty, putting readers and their needs at the centre.

Importance of journalistic integrity

In unprecedented times like these, the value of having robust and principled journalism is self-evident. In a true democracy, one of society’s essential foundations is a news media free from political and commercial interference.

In this context, it may appear as though embedding commerce into news publishers’ articles is not compatible with the above ideals. While it is true that news editors need to ensure the clear separation of news content production and monetisation, this is something that can be quite easily achieved.

But, what do publishers need to consider when implementing e-commerce for digital audience monetisation? How can journalistic standards and values be preserved while running monetisation through commercial activities?

Clarity, curation, and convenience

Transparency is vital for the successful implementation of a digital audience monetisation strategy that relies on e-commerce. There is no danger of e-commerce impacting adversely on journalistic standards as long as publishers taking this route are completely transparent with their readership.

If an article contains direct e-commerce content, it must be clearly listed as a commercial offering. This transparency not only safeguards integrity, but it also has the potential to turn the article into something that readers will view as value-adding.

For commercial offerings to be welcomed and received as value-adding rather than dismissed as unwanted spam, publishers must curate their commercial offerings with great care. Traditional advertising can often be looked upon as a distracting annoyance. Carefully curated direct e-commerce, on the other hand, can be tailored to complement a publisher’s reader profile. The successful production of such quality content will create a new revenue stream that also inspires greater reader engagement and interaction with the brand.

The main principles for running e-commerce for digital audience monetsation are:

  • Separation of monetisation and content production.
  • Transparency.
  • Relevancy and format of the commercial offering.

Once transparency and careful curation have been taken care of, publishers must present the commercial offer in the best possible way. Convenience is king. The shopping functionalities must be user-friendly and visually aligned with the content, and the check-out experience needs to be a smooth, straightforward process readers can complete in just a few clicks.

In adhering to the simple steps laid out above, news publishers can seamlessly incorporate e-commerce into their sites without negatively impacting journalistic integrity. If done correctly, the end result will be an enhanced reader experience that generates a new revenue stream and delivers a more engaged and invested audience.

Direct e-commerce in action

One prominent news publisher that has successfully navigated the complexities of marrying direct e-commerce with journalism is Dagens Nyheter (DN), one of Sweden’s national news channels. DN was already exploring new revenue streams before the onset of COVID-19, and its arrival served to accelerate the shift in taking greater ownership of a commercially driven monetisation model.

DN is a highly-respected source of news in Sweden, and any implementation of e-commerce into its digital offering could not interfere with journalistic standards. DN got around this potential problem by completely separating e-commerce from the news by adding a new shopping section to the Web site. The in-house commercial team carefully selects the items offered in this section to match the readers’ profile, and the products and deals are only available to subscribers.

By placing commercial monetisation in a unique, specifically designed area, the offerings don’t at all detract from the news content. A particularly interesting aspect of DN’s approach is that by enabling access to the discounted commercial offers to subscribers only, the company elevates the value of the subscription offer and further enhances the brand’s strong connection with its readers.

DN’s approach to e-commerce is the perfect showcase project of how to run news media monetisation powered by e-commerce. Its monetisation is strictly separated from content production. The shopping offer is designed most transparently and placed in its designated section. The numbers show readers find the shopping offer relevant and make use of it.

DN found a new and reliable source for media revenue in direct e-commerce. It helps to diversify income and strengthens DN’s economic position. In addition to the new revenue stream, its direct e-commerce programme has proven to be an effective tool in growing reader loyalty and identification with the brand.

If you are interested in learning more about the unique approach to e-commerce DN is taking, please watch the INMA webinar on this topic. In this session, the DN case is presented in-depth, showcasing this new economic media model’s advantages and structural characteristics.

The takeaway

Both legacy and new news publishers need to find alternative ways to generate revenue that goes beyond traditional advertising and affiliate marketing. Direct commerce appears perfectly positioned to offer publishers an opportunity to retake control of their destiny by breaking from the old dependency on the diminishing returns coming from advertising, and the affiliate model that drives engaged readers to third-party sites.

By employing direct e-commerce in a fully transparent and reader-focused manner, we can already see publishers dispelling any concerns that this approach poses a threat to journalistic integrity. On the contrary, direct e-commerce correctly done has the capacity to add real value to the reader experience and foster even greater loyalty and identification with the publication.

About David Jeremias Vogt

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