Swedish media group Nyheter24-Gruppen has gone a step further than other e-commerce-hungry publishers by building Urban Gloss, its own beauty brand and range of products.
Since August, Urban Gloss has sold six beauty products, including night cream and face serum, priced between 80 Swedish krona ($10) and 350 Swedish krona ($43). E-commerce has been on the publisher’s road map for the last two years, and beauty products were an obvious first step: The media group said it has eight sites, two of which relate to beauty, fashion and lifestyle, Modette and It Girls. Beauty products are also high-margin, according to CEO Daniel Weilar.
“We can utilize the full capacity of a media house in terms of launching a new brand,” said Weilar. “We’re a streamlined media publication, but as a startup for e-commerce, suddenly we have the capability and the traffic to market it.”
Nyheter24-Gruppen’s creative studio has designed the Urban Gloss ads, while its ad ops and yield management teams are working out the best way to drive conversions from its other content sites. Nyheter24-Gruppen’s network of beauty influencers helped launch and market the brand, with The #UrbanGloss Squad section of the Urban Gloss site dedicated to Instagram posts featuring people using the products. The brand also took inspiration from Glossier, the beauty brand that emerged from beauty blog Into the Gloss, according to Weilar.
Nyheter24-Gruppen’s e-commerce team has grown from two to four people in two years. The publisher designed the recipes for the beauty products in a lab in Switzerland. The e-commerce platform was built in-house, but payments, packing and shipping are outsourced to third-party companies. The media company has 80 people in total.
Weilar was unwilling to share any numbers on Urban Gloss’ sales because it’s still in the brand-building phase. In the first two days after launch, the Urban Gloss site had 50,000 visitors. When the publisher increases ads across its content sites or a product is endorsed by one of its networks of beauty bloggers, daily sales increase fivefold, according to Weilar. Native posts and Instagram influencer endorsements drive the highest levels of conversion, he added.
Weilar expects revenue from e-commerce to account for 25 percent of Nyheter24-Gruppen’s revenue next year. “This year is an investment year; in 2018, we will see black numbers immediately,” he said. In the run-up to Christmas, it’s studying site visitors, measuring dwell times, traffic sources and how different landing pages impact conversions.
Beyond an additional revenue stream, the publisher is turning to e-commerce to secure its programmatic ad revenue against the duopoly. Faced with falling programmatic CPMs and threats from the global platforms’ superior reach, wealth of data and competitive pricing, keeping the demand up for the publisher’s programmatic impressions is challenging.
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“We can’t change the market,” said Weilar, “but in order to keep the demand up, we can keep more of the value chain to ourselves. If we’re building the brand right, we can keep a decent margin.”
The value of programmatic display impressions on the media group’s sites varies depending on the type of advertiser: A brand advertiser would value impressions at a different level than a native or affiliate advertiser. The media group has identified the maximum number of demand sources that would make impressions as valuable as possible. Having calculated the value of an Urban Gloss impression, when the programmatic pricing drops below a set limit, Nyheter24-Gruppen can display Urban Gloss ads to drive up demand and maintain it at a level that satisfies the publisher.
The publisher has recently launched a second product brand, Happitude, which sells personalized sweatshirts. Nyheter24-Gruppen founder Douglas Roos has previously said it could launch more e-commerce projects connected to its other sites, such as its esports site, Fragbite.
While Weilar is not averse to selling products independently of Nyheter24-Gruppen’s own platform, like other blogs or e-commerce sites do, it’s not a priority. “The project has been financed by the publishing side and should benefit the publishing side,” he said. “For now, we’re sticking to our own channels.”
Weilar will delve further into this e-commerce approach this month at Digiday’s Publishing Summit Europe in Berlin.
Image courtesy of Urban Gloss