It’s no secret that the digital media industry needs new business models. As our 2014 Digital Publishing Benchmarks Report points out, digital media companies are operating in a volatile time of transition and discovery.
The biggest challenge? It’s a time of uncertainty. Publishers know that ad revenues are on the decline, and they’re experimenting with new monetization channels like sponsored content, webinars, and courses. Consequently, Media companies are also facing option overload, with options spread thin across multiple channels.
It’s times like these that chief revenue and product officers need to take a step back and ensure that they’re focusing on the right options. Why not try something that other publishers might consider ‘out there’—like ecommerce? This tried and true business model is one that is safe and long-established. Publishers are the best type of business to venture into this space and consider selling products. The reason? Media companies already have strong audience bases to convert into paying customers. Not to mention, publishers have access to a wealth of audience data from their content consumption patterns, social media activity, and past interest in ads. Here’s what you need to know to get started.
The Refinery29 Model
Let’s get started with a case study.
One of the biggest examples of publishers venturing into ecommerce was Refinery29, a women’s fashion and lifestyle business. What’s interesting about this situation is that Refinery29 closed the doors on its ecommerce business in 2013. The reason?
It’s deceptively hard to merge ecommerce and publishing, and the core team didn’t have the resources or expertise to do it right. Refinery29 decided, instead, to focus on the media side of its business.
The interesting ending to this story, however, is in how Refinery29 continues to monetize--by selling ads to fashion retailers like H&M and Neiman Marcus. Even though the company has shut down its own ecommerce business, it is still using its publishing arm to partner with major retailers to drive sales.
The moral of this story? While ecommerce wasn’t the right business model for Refinery29, it very well could be for other publishers.
Take a look at Harvard Business Review, as an example.
In addition to monetizing through subscriptions, the business content leader also sells digital products through an ecommerce like experience. HBR readers can shop for articles, case studies, tools, magazines, books, and more.
The media company is an innovator in creating and monetizing its own products. It’s a multi-faceted revenue strategy with immense long-term potential.
Assembling the Puzzle
Is your media company well-positioned to follow in the footsteps of HBR? Will you be risking a wrong turn for your business, like the Refinery29 example? There is no textbook ‘model’ to follow--you need to figure out the right solution for your organization. Ask yourself the following question as a guide:
Do you have ideas for products to create and sell? If you’re not sure how to answer this question, start with your audience. Ask them what resources they’d like to see (and what they’d pay for).
Do you have marketing resources to devote to your ecommerce hub? An ecommerce hub will need a tailored marketing plan that is likely different from your core website. Make sure that you have the resources and mental bandwidth to devote to fleshing out your resources.
Do you have an integrated audience database? When you’re building and launching products, you’ll want to monetize them as quickly as possible. What databases and targeting systems do you have in place? Take a moment to get your systems in order and define your most viable channels. This perspective will help you figure out which products to launch first.
How can ecommerce fit into your email strategy? Email has a reputation for being one of the highest converting digital marketing channels. For that reason, your newsletter provides an ideal forum for marketing your own products. Dive into your email systems to figure out which lists are most engaged and where monetization might be lowest. Carve out opportunities with your own products.
What’s your launch strategy? The answer to this question will require a process of testing and learning--you may need to launch an early ecommerce experiment to figure out the right path forward. Figure out what gets your products the most attention and how you can make the biggest impact with your audience. The key to success here means creating a launch plan that you can replicate.
As a media company, you have an amazing asset in place: your audience. You’re collecting a wealth of interest-based data and likely already have a presence on social media. Brands would leap for joy if they had your level of influence and top-of-funnel assets.
Don’t take these things for granted. Instead, use them to kickstart your most viable business opportunities yet. Admittedly unexpected, ecommerce may be your best answer.