News publishers are strongly positioned to grow affiliate e-commerce revenue models

By Justin Eisenband

FTI Consulting

Washington, DC, USA


Most news publishers have been cautious to enter the fast-growing space of affiliate marketing and embrace the revenue growth that e-commerce has driven, particularly in the last two years.

Traditional newsrooms can often be hesitant about their publications expanding the content-to-commerce model. They are concerned about further dilution of journalistic ideals in a modern news landscape that already places a premium on clicks and attention over mission-critical journalism.

However, as marketers have pivoted away from traditional digital display advertising and more toward growth areas like social video and performance marketing, news publishers should consider following suit and reconsider their willingness to produce more content that can drive affiliate revenues.

With the world economy outlook uncertain, it is critical, now more than ever, for publishers to consider this model as advertisers will consider shifting spend from fixed buys to more performance marketing in a recessionary environment.

Affiliate commerce-driven revenue has increased significantly in the last few years and shows no signs of slowing.
Affiliate commerce-driven revenue has increased significantly in the last few years and shows no signs of slowing.

Given the importance of diversifying and growing this revenue stream, there are several reasons news publishers should look to invest and grow affiliate commerce revenue.

Within the last decade, several long-standing and highly reputable publications — like The New York Times, New York Magazine, and Chicago Tribune — have expanded their affiliate content businesses. For many publications, these commerce-driven revenue streams have turned from small parts of the revenue mix to meaningful shares that continue to enjoy double-digit growth now. This is likely to be the case for the next few years.

Regardless of whether a publisher is just getting started on an affiliate commerce business or looking to accelerate, we’ve compiled a few key trends for publishers to consider.

Affiliate commerce-driven revenue has grown significantly since the start of COVID-19

In the last two years, digital advertising revenue has been through several ups and downs. There was an initial drop in mid-2020 followed by a fairly strong recovery over the last two years.

However, with traffic down for most publishers, display and video advertising has seen slowing growth this year, in particular. While traditional digital display and video have seen some instability, affiliate commerce has been a strong source of growth for publishers.

It is true that commerce-related content has become significantly more competitive at the same time. However, in many ways, news publishers are well-positioned to attract and monetise their current audiences — who often come through direct channels, e-mail newsletters, or even social media — rather than having to dominate in search to achieve a successful affiliate model.

Publishers can build powerful stand-alone brands to drive affiliate commerce without negatively impacting journalism

Multiple news publishing giants turned to acquisitions in the face of rising e-commerce demand. The New York Times and the USA Today Network acquired product-review sites to boost e-commerce affiliate marketing revenues but maintained the separation between the two sites. This stand-alone model has many benefits for both sites.

According to Mat Yurow, chief of staff and head of strategy at Wirecutter, The New York Times acquired Wirecutter in part “to build a single, really strong brand that covers a breadth of products and categories as opposed to creating a really confusing fragmented environment where people have to figure out which site to go to for any given product.”

By maintaining separation between the two sites, the Times maintains a clear division between what is primarily reviews and product recommendations from its main news outlet on the Web or app. However, the Times can still leverage its traditional news site and app to drive referral traffic to Wirecutter by linking their articles in its Smarter Living section, thus increasing Wirecutter traffic.

With potential cutbacks to ad spend, many advertisers may shift budget toward more performance-driven marketing

With advertising markets beginning to show signs of caution leading into the back half of 2022, publishers should take note of typical trends when ad spend recedes. Many advertisers will look to maintain their highest return-on-investment spend, which can often lead to a shift in spend toward more contingent and/or performance-driven marketing.

Consequently, there may be a scenario where we see a shift in spend more toward affiliate-driven deals if there is a pull-back in advertising spend due to an economic slowdown or recessionary macro-environment.

As we look even further to 2023, publishers may play an even more critical role in the online shopping journey if third-party cookies are phased out on Chrome. Since retargeting may be more difficult and/or less efficient, advertisers may look even more to publishers who have content that can target users with purchase intent.

With a more robust package of inventory, including contextual ads and affiliate links, publishers with a strong content-to-commerce model may be well-positioned to take advantage of the shift in spend from retargeted advertising.

Affiliate marketing revenues will be a major piece of most publishers’ revenue mix going forward

As publishers continue to diversify revenue, the affiliate marketing model will become a critical contributor to the overall business model. As demonstrated by the success of traditional news publishers like The New York Times, news publishers should feel confident that affiliate marketing business models can not only coexist but actually thrive along with strong journalism.

About Justin Eisenband

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