How Leaf Group transitioned to being a commerce-dominant media company

Over the past eight years, Leaf Group (formerly known as Demand Media until 2016) has transformed itself from a SEO-focused content farm to a commerce-driven media company that sold for $323 million to Graham Holdings last June.

Much of that transition was done at the hands of CEO Sean Moriarty, who wanted to build a portfolio of expert-led content that readers turn to when making purchases. And now roughly two-thirds of the company’s revenue comes from the commerce side of the business, according to the company.

Moriarty joined Leaf Group after the media company acquired online art marketplace Saatchi Art in August 2014, where he had served as CEO for a year.

The addition of the artwork marketplace (and Society6, another marketplace Leaf Group acquired in 2013 that turns its network of artists’ designs into buyable HomeGoods) has taught the media properties in the portfolio a lot about e-commerce, he said.

Below are highlights from the conversation, which have been edited and condensed for clarity. 

How commerce became a dominant source of revenue 

We’ve roughly been about two-thirds commerce revenue to one-third primarily digital advertising on the media side of the business. [After publication, a spokesperson clarified that Moriarty intended to say two-thirds of the company’s overall revenue comes from its commerce business.] The commerce businesses give us a deep understanding, about consumers buying products online, as a company overall. So you learn an awful lot about them. The opportunity in media is for us to take that knowledge, understanding, and best practice and bring it to bear as these digital media brands go further in their revenue diversification efforts, and bring intelligent, integrated commerce into the content that we’re creating. And so when you start from a base of having real knowledge because you operate separate businesses in the category, I think it helps you, as you start because you have some level of expertise in the organization that you can share. 

Adapting to a publisher-centric commerce strategy 

When you think about commerce for publishers, it is a bit different, because in many cases, the commerce experience is one that’s really integrated in the nature of the content itself. The efforts and mechanics behind that are a bit different than just straight up managing a catalog.

But I think the fundamentals are similar, which is, you want to make sure that you’re offering your readership products that they would be interested in, products that you know are of high quality, and if it’s done by way of third-party integration, [then it’s] from a partner who can execute well so that customer has a great experience. 

In the media world, the opportunity should be created, not just by [saying], “a lot of people on this article, let’s put an affiliate link up and see if we can pick up a quarter.” That’s not terribly interesting. It [should be], “can we use our knowledge and expertise in our ability to curate so that we’re providing introductions to a brand or a product that a customer who trusts our brand might never have heard of before?”

Getting into digital sales with NFTs

[NFTs] create a whole new way for art lovers and collectors to experience art, and [give] huge new opportunities for artists. That said, at the beginning of anything, there’s an awful lot of noise and hype and it’s hard for many people to navigate.

Saatchi Art [is] very much in the business of building a platform and a brand that serves artists and art lovers or collectors. So the right approach for us, given this new opportunity for artists and for collectors, and the best way through the noise, is to look at what we are really good at? Saatchi Art is characterized by [an] opportunity for emerging artists, and a high level of curation, and a trusted environment where people can go to discover art and artists.

That’s really informed our approach with the [NFT] collections that we’re doing. The Other Avatars is our project, which drops later in January, and we have brought in a bunch of participating Saatchi artists who are creating unique avatars [that are] all inspired by the self portraits of Van Gogh.

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