Digiday Research: For e-commerce, publishers prefer owned stores over Amazon
At the Digiday Hot Topic: Commerce for Publishers event in May in New York City, we surveyed 53 publisher executives to learn how publishers are approaching commerce initiatives. Check out our earlier research on where publishers get their revenues here. Learn more about our upcoming events here.
- Just over half of publishers surveyed said at least 75 percent of their commerce revenue comes from affiliate sales.
- Forty percent said their websites had an online store.
- Only 17 percent sells products on Amazon.
Given that few publishers operate brick-and-mortar stores, the bulk of their commerce revenue comes from e-commerce. Based on earlier research from 133 publishers at the Digiday Publishing Summit in March, 43 percent of companies reported e-commerce revenues. While publishers have conducted e-commerce sales for years, e-commerce is often just a small portion of a company’s revenues. Only 4 percent of the publishers that reported e-commerce revenues said more than 50 percent of their revenues came from e-commerce.
Most publishers rely on affiliate commissions
Digiday found that the majority of publishers rely heavily on affiliate commissions, with 52 percent of the 53 publishers surveyed at the Hot Topic event saying affiliate commissions generated over 75 percent of their commerce revenues.
To boost commerce revenues, publishers are forming editorial teams dedicated to writing commerce posts. Dotdash, which grew commerce revenues 700 percent in 2017, had three full-time editors and 20 contributing writers as of December. Similarly, BuzzFeed had 19 full-time commerce writers in November. Travel deals site The Points Guy, which has 14 editorial staffers, is based entirely on affiliate revenues.
As companies like Dotdash and Time Out look to expand their commerce businesses, they might struggle to do so through affiliate commissions. That’s because depending on the product and commission structure, affiliate margins can be quite small. Dotdash found that commissions earned from affiliate sales of consumer electronic goods were just 2 or 3 percent. As a result, it shifted its editorial focus to pursue products with higher commission sales. Thought Catalog shifted its commerce business away from affiliate to its own online store and increased the revenue margins per product by 400 percent.
Online stores are more popular than Amazon among publishers
People questioned why Thought Catalog chose to sell products only through its owned online site, forgoing Amazon’s scale. But Thought Catalog isn’t alone. PopSugar recently launched its own line of beauty products that are available on their own site, but not on Amazon. In fact, Digiday’s survey from the Hot Topic event found that 4 in 10 publishers said they had their own online store, while only 17 percent said their company sells products directly on Amazon.
In the long run, it might be advantageous for publishers to steer clear of Amazon. Selling products on Amazon or referring traffic to Amazon only helps strengthen the direct connections between Amazon and consumers, not between consumers and publishers. As shoppers become accustomed to shopping on Amazon and fast delivery speeds, the chances that consumers will shop directly with publishers could decrease. It will also be interesting to see whether publishers, after being burned by Facebook, let themselves become dependent on another major platform.
Meet the ‘absolutist’ with the Section 230 tattoo on Google’s new misinformation policy team
Part of a nascent government affairs and public policy team at Google, Jess Miers is a die-hard fan of the 26-word law that gives legal cover to big tech platforms.
‘A perfect time for someone like me to be in this role’: Maria Reeve is breaking barriers at the Houston Chronicle
Maria Reeve didn’t set out to become the first person of color to oversee the Houston Chronicle’s newsroom. But now that she is, she’s making it count.
Maven rebrands to The Arena Group and reorganizes around sports and finance
The Arena Group owns and hosts the domains of over 200 sites and generated $143 million in revenue for the year ending June 30, 2021.
SponsoredHow retailers can be ready for holiday shoppers this year
Suchi Sastri, managing director and partner, Boston Consulting Group As the holiday season approaches and the pandemic continues to evolve, retailers want to know what to expect. Will e-commerce continue to grow at the rate it did last year? How big of a role will in-store shopping play in holiday shopping? While it’s still early, […]
‘Culture change takes years’: Facing ongoing calls for DE&I gains, publishers set new standards for hiring practices
The media industry is trying to solve a long-standing challenge: it is mostly white and male. Here's how some publishers are doing it.
Member ExclusiveMedia Buying Briefing: ‘Accountability is just going to spread’: Agencies agree carbon-neutral goals are a must
Independent agencies believe their environmental efforts can have a bigger impact than the giants, citing their effect on small businesses that make up 44 percent of the U.S. economy.