3 business opportunities of commerce as a product
Product Initiative Blog | 14 October 2021
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.
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