At the intersection of expertise and insight, commerce content programs are becoming key revenue generators.
For digital media executives on the hunt for new sources of revenue, commerce content programs have long presented tantalizing possibilities. By creating content that’s differentiated from its main editorial output, could a company lean into its principal strength—expertise—and offer its audience a way to discover new products? Could this content be monetized through sponsorships and affiliate links?
Until recently, the prospect of generating meaningful revenue through commerce content was seen by some media companies as little more than a thought experiment—a product of too much new-media optimism and too little data. Many argued that revenue from commerce content would be forever dwarfed by the twin pillars of a healthy traditional publishing business: advertising and subscription revenue.
Then 2020 happened. E-commerce, fueled by the pandemic and the abandonment of brick-and-mortar shopping, exploded. Two billion people bought goods or services online in 2020, or one in four people in the world. Those consumers spent $4.2 trillion dollars, a 25% increase over the year before. These numbers were jaw-dropping, and there’s good reason to think they’ll stick: Mobile device usage was a primary driver of this increased e-commerce traffic, and smartphone penetration in the global market still increases every year.
Getting to know your consumers
As the consumer appetite for online shopping grows, so too does the need for reliable intelligence about the online marketplace in the form of product reviews, gift guides, how-to guides, buyer’s guides, and product comparisons, among other content formats. High-quality information around online purchasing decisions, which commerce content teams can provide in droves, is now more vital than ever. As a result, commerce content is now a crucial monetization strategy for many publishers.
According to a recent impact.com survey of 200 digital media executives and professionals worldwide, a surge in e-commerce led to a boom in revenue from commerce content programs. The respondents pointed to higher total revenue (45%), improved cash flow (41%), and increased profit margins (34%) as the top three gains from their commerce content business.
The gains will continue to grow, according to the survey’s respondents. More than half (57%) expect that revenue from commerce content will increase by at least 25% each year for the next two years. Some are even more confident: One-quarter of them foresee an annual growth rate of more than 50%.
The biggest media companies are thriving with commerce content
One company that has already benefitted from the growth in commerce content is the Meredith Corporation, a media conglomerate. Meredith has had a commerce content program for five years. Still it ramped up its investment three years ago when it built a centralized commerce content team, says Chloe Reznikov, general manager of commerce content and strategy at Meredith. The investment has paid off.
“Over the past three years, Meredith has seen more than 100% year-over-year growth in revenue [thanks to commerce content],” she says. “During the 2020 holiday season, Meredith drove $35 million in Prime Day sales and $36 million in Black Friday/Cyber Monday sales via our commerce content program.”
Meredith isn’t the only big-name publisher to invest heavily in commerce content. The New York Times Company acquired Wirecutter, an early pioneer in commerce content, in 2016. Since then, Wirecutter’s digital footprint, ability to generate revenue, and buy-in from the Times Company has only expanded.
“We’ve grown our audience to about 15 million readers a month, and our revenue increases every year,” says Leilani Han, head of business development and partnerships at Wirecutter. “Our entire company is dedicated to Wirecutter, and our editorial staff has grown to more than 100 people.
From a staffing perspective, publishers are increasingly making space for commerce content units. Out of the 200 digital media executives surveyed by impact.com, 87% say they have a dedicated commerce content team. These units are making money in various ways, with a percentage of revenue from referred sales still being the preferred means (41% of respondents use this monetization method). But about a third use other methods, including fixed-fee sponsorships, fixed amount per conversion generated by a campaign, view-through attribution, per-click referrals, and a fixed percentage for participating in the customer journey. This shows that not only is the content itself becoming more sophisticated but so is the means by which the content is monetized.
Data is vital to growing commerce and retaining consumer trust
One of the keys to how publishers monetize their commerce content is data. Hanan Maayan, CEO of Trackonomics, an impact.com company that offers a data management platform for publishers in the commerce content industry, says that the correct data helps commerce content units shape editorial material and explore ways of monetizing their operation.
“The latest technology allows publishers to get granular statistics on every article, review, and page,” Maayan says. “This can be extremely useful in helping publishers decide what kind of writing they’ll feature and help point them to potential partners across all segments and platforms.”
In this way, commerce content is much like purely editorial content, in that data provides key insights into audience behavior that can impact top-level business decisions. And, like purely editorial content, it’s paramount that commerce content teams retain readers’ trust.
“At the core, keeping one’s editorial integrity is about upholding a fundamental premise: that, first and foremost, content has readers’ interests in mind,” says Maayan. “Monetizing that content is an important, but secondary, concern to the publisher.”
Commerce content is no longer a new-media thought experiment that only works in the abstract: It is now a worthy investment that’s essential for publishers, and it will only continue to grow.
Click here to read the full results of the impact.com survey in the proprietary white paper Commerce Content Providers and the New Digital Paradigm.