Despite risks, publishers take commerce operations in-house
When it comes to e-commerce, some publishers aren’t shying away from doing some of the dirty work themselves.
Women’s lifestyle site PopSugar made the jump into commerce in 2012 with Must Have, a $40-a-month-subscription box that today accounts for 20 percent of its revenue. The twist: Rather than outsource the entirety of the operation to third-party vendors, PopSugar handles all of its merchandising, marketing and customer support in-house.
“We’ve been doing this for a while, so we’ve gotten the big issues figured out when it comes to owning these systems and handling the overall process,” said PopSugar president Lisa Sugar.
Condé Nast’s Allure took its Allure Beauty Box operations in-house six months ago, giving the publisher more control over what made it into the boxes and giving it a more direct relationship with readers. “We’re running all the procurement, marketing and manufacturing, but we also own the customer data,” said Allure publisher and chief revenue officer Agnes Bogdan Chapski. Its subscription-box business has 30,000 subscribers, a 40 percent increase since last June. Food52 has also pushed closer to being a retailer in its own right.
Commerce has become a common way publishers try to shore up their businesses in the face of declining ad revenue. For Gawker and The Washington Post, for example, commerce means running affiliate links within articles, a simple revenue stream that gives publishers small a cut of sales while letting them off the hook for the actual challenging parts of running a commerce business.
What PopSugar and Allure are doing, in contrast, is much harder. “Setting up a subscription front end isn’t terribly complicated. It’s on the backend, where you get into the fulfillment and supply chain stuff, that’s where the complexity is,” said Scott Wingo, CEO of ChannelAdvisor, an e-commerce software company. “That tends to be outside the core competency of media companies and is harder than they might think going in.”
He said that the subscription box business has become particularly complex. Consumer tastes are drifting toward more customizable boxes, which has ratcheted up the difficulty on the fulfillment end because it has forced companies to have to work with more vendors and product combinations.
PopSugar ran into some snags in early 2014, when it migrated its shipping and payments systems. Some subscribers ran into billing issues, while others got their boxes days late — a major problem in the age of the unwaveringly dependable Amazon.
Despite these challenges, media companies do have some advantages over pure-play commerce companies. One is marketing. Running a subscription-box product next to a website means free marketing, lowering consumer acquisition costs and widening margins.
“There are a lot of beauty boxes out there, but because our brand is so strong and because our editors have such traction and expertise, we knew something curated by us would have more value than something from a brand people didn’t know,” said Allure’s Bogdan Chapski.
The Brazilian Report, Paramount Brand Studio, New York Times Advertising and The Wall Street Journal are among the 2023 Digiday Media Awards finalists
Personalization, authenticity and inclusivity emerged as significant themes among this year’s Digiday Media Awards shortlist. With the expansion of digital media’s global reach and influence, brands are recognizing the importance of investing in emerging channels to engage diverse communities. The Brazilian Report was shortlisted for several categories, including Best Podcast for its weekly series, ‘Explaining […]
‘Not the future’: European publishers remain steadfast in blocking alternative IDs to third-party cookies
Some European publishers believe alternatives to the third-party cookies, probabilistic or deterministic, will do more harm than good to their ads businesses.
Media Briefing: Why Leaf Group spun off its media arm into a standalone company
World of Good's newly appointed CEO Lindsey Abramo spoke with Digiday about her plans to lean into experiential and embrace niche vs. scale.
SponsoredWhat the measurement and currency discussion really means to TV advertisers
Ali Mack, head of TV and agency, Experian Major streaming video providers have recently made headlines by adopting new currencies for ad measurement, threatening Nielsen’s long-standing TV ratings monopoly. NBCUniversal, for example, has certified iSpot and VideoAmp as currencies for advanced audiences and formed the Joint Industry Committee with Paramount, TelevisaUnivision and Warner Bros. Discovery. […]
Dentsu’s latest ad report shows slowed growth, driven mostly by inflation
The good news in Dentsu's ad forecast is that there's still growth. The bad news: most of the growth is the result of inflation, while real ad pricing actually dropped a bit.
How chef influencer Tue Nguyen works with the BuzzFeed Creator Network
BuzzFeed's Creator Network has been valuable from an audience and production education standpoint, but Nguyen still drives most of her business on her own.