Hi there. We’re in the middle of the INMA Product and Data Summit, which has been fantastic. It’s not too late to join the last couple of modules and receive recordings of the first sessions. For those who haven’t been able to make it, I’ll share some of the high-level takeaways soon.
But in the meantime, let’s talk about commerce, a subject that has come up a few times recently. I want to share some thoughts after a long discussion with the INMA Product Advisory Council.
Do you have questions or comments? I want to hear from you. Please e-mail me at firstname.lastname@example.org.
The business opportunity of commerce as a product
Commerce has been lurking away in the background for many publishers for a long time. When I worked at the Mirror in the UK 20 years ago, there was a small but worthy revenue stream from travel and gardening. This was before the Internet had made a significant dent and so these were published as branded house ads in print. The growing number and flexibility of digital channels has changed this significantly and commerce has good revenue potential.
Digital natives are ramping up commerce more quickly than traditional media. BuzzFeed started with affiliate links for a long time and, in July 2020, launched a fully fledged BuzzFeed shopping site.
So what is the opportunity for more traditional news brands?
India is more advanced with online commerce than many western countries. Durga Raghunath, head of digital at Times Internet, spelled out the three main areas of opportunity the company is working on. This was echoed by others starting on this journey.
Stage 1: Text linking/affiliate
This is the most common form of commerce and is now a standard part of many commerce businesses, such as Amazon and Walmart. Products are reviewed or mentioned in an article, and readers are able to click to buy directly through unique links. The originating media is usually compensated with a percentage for any purchase made. This is what the “influencer economy” is built from. With a large enough audience, the revenues can be significant.
Wirecutter is probably the most referred to title in the United States that makes money exclusively from affiliate sales. It was acquired by The New York Times in 2016 for US$30 million. New York magazine has a section called The Stylist and Gizmodo has The Inventory.
Stage 2: Shopping widgets
Widgets are added to the page, separating out the shopping from the content a little more and making the shopability very clear. These are so popular, and there are a number of free plug-ins around to enable this across platforms and sites.
A benefit of widgets is they are clearly differentiated from the editorial product. But there is a trade-off with space: Any inventory used for shopping cannot be used for advertising or marketing.
Stage 3: Shoppable images and video
The most often referenced example is around clothing, specifically “get the look,” where we often see photos and videos of celebrities. Those images are scanned and, using AI, are matched to similar available inventory, which consumers can then choose to buy (usually at a much more affordable price).
In theory this is fantastic, but it is still very much in the process of being rolled out. Usually media companies rely on third parties for the AI and partner with commerce businesses, which again will give a percentage of sales. There also needs to be some oversight to ensure appropriate images are being scanned. For example, you wouldn’t want it to come up on an image of a plane crash or other tragic event.
The internal mechanics of commerce as a product
The business need for commerce is clear. But as with all good things, there are trade-offs. In particular, there are likely conflicts with advertising. Not only could they compete for customers, but also for time and space: Any time and space devoted to commerce isn’t being devoted to editorial or other areas.
This can cause conflict if department goals are not strategically aligned. An advertising team will understandably become stressed if they have goals to meet, yet inventory and resources are being diverted elsewhere.
A slight aside here: Karl Oskar Teien, director of product at Schibsted, pointed out that anyone who isn’t considering an ad free experience for subscribers is wearing blinkers. He is right. Consumers frequently use content blockers, clearly demonstrating the user need. Businesses focusing purely on this are cropping up. Just look at Scroll, which was recently acquired by Twitter. It doesn’t mean all should go ad free. But it does mean we should recognise there is an issue around user experience.
So, back to commerce. Does it meet with the organisation’s core objectives? How do you test it? And how do you forecast revenue streams? All of these need to be answered to work out where it sits in terms of priorities.
There is also a deeper discussion to be had about how this works with journalism. As the ever wise Kara Chiles, vice president/consumer at Gannett, sums up: “Bringing commerce to a product sensibility: How do we include opportunities to buy in places that make sense that don’t seem like they are that are not in conflict with the journalism that we’re doing?”
Just one request from me: Please let’s not adopt the phrase “shoppertainment” that I’ve seen floating around the Internet!
Dates for the diary: November 10 Meet-Up
Following on from Louise Story’s blog post on how the diversity triangle can help media companies move forward, we’re going to look a little more closely at diversity through a product lens. Cindy Joung head of product inclusion at Verizon Media, has been doing precisely this for the last year. She will join me to talk about the business case for Diversity, Equity, and Inclusion (DEI) in product and how it can help you grow your audience. Sign up to this Webinar here (free to INMA members).
Tweet of the week
Tech platforms such as Instagram and Facebook have commerce built into their technology, enabling the influencer economy. Now TikTok is doing the same. Ironically, this is being announced on Twitter, which is yet to build out a solid commerce offering.
- BuzzFeed Starts Selling Products Directly to Consumers on WSJ.
- Gibson Biddle, former vice president/product at Netflix, just ran a product workshop for us as part of the INMA Product and Data for Media Summit. As one attendee told us: “This one of the best workshop in my life.” If you missed the summit, or if you want to go deeper, I recommend his Intro to Product Strategy.
About this newsletter
Today’s newsletter is written by Jodie Hopperton, based in Los Angeles and lead for the INMA Product Initiative. Jodie will share research, case studies, and thought leadership on the topic of global news media product.