Many publishers are trying their hand at ecommerce, but few have run as far with it as Purch.
The tech site network, whose stable of 20 tech brands includes Top Ten Reviews, Live Science, and Tom’s Guide, has made commerce a key part of it its business over the past few years. Roughly fifty-five percent of the $100 million it pulled in last year came from its commerce business, which includes lead generation and performance marketing, while the rest of its business is built around advertising.
The commerce approach makes sense for sites like Tom’s Hardware, which reviews computer components, game consoles and smartphones. A recent review of a new Intel solid-state drive, to use one example, is accompanied by a “buy now” button that links to its product listing on NewEgg.com. If a reader ends up buying the drive, Purch gets a small slice of that transaction.
“Commerce is the type of thing publishers have to consider if they want to survive. That’s the bottom line,” said Purch CEO Greg Mason. The site, founded in 2003, has flown under the radar despite the fact that, at 51.4 million monthly unique visitors, it’s larger than the likes of Ziff Davis, CNET, AOL Tech and The Verge, according to comScore.
That scale, coupled with its heavy commerce focus, has made Putch an attractive target for investors. Purch said on Tuesday that it’s raised $135 million in venture funding, twice the size of recent rounds for Vox Media, Refinery 29 and BuzzFeed. That adds to the $40.5 million it raised previously.
Purch’s reliance on commerce bucks makes it a rare exception among publishers, most of which still rely on advertising to make the vast majority of their money. But others have also seen the potential. Gawker’s commerce business, which includes affiliate links within articles and daily deals posts, was ten percent of the company’s overall revenue . The likes of Thought Catalog, IDG and Gear Patrol have ventured into commerce while Wirecutter and Thrillist have built their entire business around marrying reviews and purchases.
But Purch’s Mason said that commerce doesn’t come naturally to most publishers. The likes of The Verge and Engadget may cover tech, but they do so the top of the funnel, largely from the news lens. Purch, in contrast, has step up shop at the bottom of the funnel, where readers are closest to actually making purchases, not just idly reading about them. “If you as a publisher are attracting a consumer who has an intent to take action you’re in a much better position to monetize your audience,” he said.
While 90 percent of Purch’s commerce revenue comes from helping facilitate purchases elsewhere, it’s also pushed into selling products directly. Space.com, one of its sites, sells items such as telescopes, microscopes and Star Trek memorabilia directly to readers, giving the company a much larger chunk of each transaction. Purch has also sold directly sold various accounting, cloud and finance software as well
“There are smart ways and not-so-smart ways to do this,” Mason said. “The not-so-smart way is to try to compete with Amazon or other mainline retailer. We try to be more of a specialty retail environment.”
Still, not everyone is convinced that the content and commerce model really has legs in the long run.
“There’s no scale there,” said Forrester analyst Sucharita Mulpuru-Kodali. “You read an article and maybe you buy one of the adjacent items you see, and then the site gets a few cents on the dollar for every item they sell? Content doesn’t reduce your customer acquisition costs unfortunately so it’s best to monetize content through advertising.”