The content-and-commerce model is both highly seductive and deceptively tricky for publishers and purveyors alike.
People don’t necessarily want to take their wallets out when they’re in reading mode. It’s hard to create authentic content that also serves business goals. Scale is a challenge.
But is there still potential there?
Gwyneth Paltrow’s Goop empire, which includes a newsletter, website, online store and soon-to-launch beauty line, would seem to indicate there is. Paltrow even raised a $10 million Series A round led by New Enterprise Associates in August.
Meanwhile, Lena Dunham is also trying her hand at the content-commerce combo with a newsletter and website called Lenny Letter, which launched an online shop in early December.
But a number of other media companies and online retailers that attempted to use editorial content as a way to spark sales seemingly failed, including lifestyle site Refinery29, which moved away from commerce in 2013, and fashion ecommerce site Nasty Gal, a magazine that didn’t make it past the second issue.
Behind The Curtain At Thrillist
Most notably in this category is the Thrillist Media Group, which acquired men’s fashion flash sale site JackThreads in 2010 and broke apart into separate companies in October after five years together, a move that most industry pundits saw as the swan song of the content-commerce hybrid.
But Eric Ashman, president of media at Thrillist, is convinced that the company’s original thesis – capitalizing on a common audience – still holds promise, claiming that the Thrillist and JackThreads separation was more of a function of fundraising than anything else.
Ecommerce is a low-margin business, and online commerce companies often have lower valuations than ad-supported media players, such as Maker Studios, Vox and BuzzFeed.
As part of the split, Thrillist raised $54 million from Axel Springer, while JackThreads fetched a new round itself – amount undisclosed – from Oak Investment Partners, formerly SoftBank Capital.
“All those stories comparing us to others made for good headlines, but do I think that Refinery29 took a real run at commerce or did Nasty Gal really make an effort on the content side? No,” Ashman said.
Thrillist did, to its credit, embrace commerce wholeheartedly. When JackThreads was under its umbrella, the pair operated a fulfillment warehouse in Brooklyn and managed a team of around 40 customer service reps in Ohio.
But a content-commerce strategy isn’t just about logistics, said Mark Curtis, founder and chief client officer of Fjord, Accenture Interactive’s design and innovation unit.
“Content is a long-term business,” Curtis said. “It’s extremely difficult to build a media brand, and generally shoe manufacturers can’t do it.”
And slapping a buy button on a page or affiliate linking does not a commerce strategy make, Ashman said.
“When I hear about media companies trying to build commerce off the back of an affiliate business, I shake my head because you need massive scale to make that work,” Ashman said. “The likelihood that you’re going to click on a link while you’re in a content experience is in the single digits or less. You’ve got to be much more sophisticated about it.”
That is a challenge, considering that the skill set required to produce engaging, authentic content is quite different from what’s required for commerce success.
When Thrillist first started producing content to support its commerce venture, the fruits of that labor weren’t being shared. Email clicks were low and so was engagement.
“That’s because Thrillist was about food, drink and travel, and we were writing articles about things like the best blazer to wear when you go out to a restaurant,” Ashman said. “It was transparent to our readers and they voted with their eyeballs … or the lack of them.”
Over time, Thrillist realized that a shoppable CMS wasn’t enough. An article about a blazer probably wasn’t going to result in the sale of a blazer. It just wasn’t an efficient or a scalable user acquisition model.
From there, Thrillist developed a content strategy centered on educating buyers over time, building awareness and driving purchase intent with editorial written in the Thrillist voice, combined with retargeting readers and buyers offsite.
“Ultimately, we have a better ads business today because of what we learned with JackThreads. Both businesses really informed each other,” Ashman said. “We learned that branded content isn’t just about brand awareness and big beautiful creative, it’s about getting people to buy.”
Does Reader = Buyer?
Whether readers actually want to buy, however, is another question.
“I don’t think it’s clear yet if they do, [but that] doesn’t mean they don’t,” said Jim Spanfeller, CEO of Spanfeller Media Group and former CEO of Forbes.com. “One thing is for certain, though – readers want to know why and when their trusted content site is hawking something, and they want that to be super-transparent.”
Seamless might make sense for food delivery, but not for native, said Fjord’s Curtis.
“People talk a lot about seamlessness, but in my experience, customers want to know where the seams are; seams give something shape and definition,” Curtis said. “The old unwritten contract between media and its audience that advertising would be clearly signaled had come under deep threat.”
Shopping In The Stream
That said, there are some cases in which the context makes the selling not only transparent, but convenient and desirable, such as the case of the Team Stream app from sports site Bleacher Report.
Team Stream aggregates sports team-specific news and scores from across the web, including videos, pictures, stories and images. In September, Bleacher Report entered into a partnership with last-minute ticketing app Gametime to let users buy game tickets directly from the Team Stream app. The ads are presented natively and users with Gametime installed are deep-linked directly to the buy page.
It’s a transparent model, Spanfeller said. Same goes for selling plane tickets on a travel site or concert tickets in a music streaming app, as in the case of Pandora and Ticketfly.
“At the end of the day, it comes down to a matter of trust,” he said.
It’s also relevant. While it’s logical to assume that sports superfans want good deals on tickets to see their favorite team – the average Team Stream user accesses the app between 20 and 30 times a month, or nearly every day – reading an article about what blazer to wear to a restaurant is a far cry from being in-market for a blazer.
“An ecommerce opportunity really needs to feel like a value-added service to the user,” said Alex Vargas, VP of business operations at the Bleacher Report. “We’re fortunate to have enough scale as a publisher to be able to consider this type of integration and drive value for our partners, but the real reason this works is because the partnership makes sense for the consumer.”
“Just because you can doesn’t mean you should” is a pretty good rule of thumb in this space, said Colin Evans, CRO at Gametime and a co-founder of StubHub.
“Can you take a video, make it shoppable and tell everyone where they can buy what the people in the video are wearing and driving? You can – but sometimes people are just watching a video because they want to watch a video or hear a song, and they’re not looking to buy a new product,” Evans said. “Commerce happens when there’s a desire to purchase, not necessarily when the publisher wants there to be commerce.”
That said, the lines between how media and commerce build audiences and monetize will continue to blur, Ashman said.
“We’re all seeing the ongoing collapse of what was once a gulf between content and commerce,” he said, “And all the evidence I see says that will only continue.”
