E-commerce Represents New Play for Local Publishers

Local news publishers have always been in the business of enabling transactions on behalf of advertisers. It started with preprints in the newspaper, then digital preprints, and then coupons on news websites. The next frontier for commerce lies in mobile. Mobile innovation is required in order for publishers to remain relevant to local advertisers, a topic I covered in an earlier blog entry. How can they help advertisers take full advantage of location-based services? How can they help advertisers connect with mobile users when they are comparison-shopping inside the store? For further reading, check out a recent article from Mashable: “5 Ways Mobile Will Transform Commerce.”

In this blog entry, I am proposing taking it a step further. As publishers continue to look for new revenue streams in response to declining advertising and circulation revenue, commerce represents an attractive opportunity. Publishers need to take advantage of their brand equity and become merchants themselves. And now is the right time. Across the board, E(lectronic), M(obile), F(acebook) and S(ocial) commerce are all on the rise. In 2010 alone, retail E-commerce jumped 10 percent to $142.5B, according to ComScore.

It is an obvious play. Publishers already have valuable relationships with loyal readers, which can provide the gateway into E-commerce. In addition, they have some experience with B2C commerce in selling subscriptions. Starting to sell products Amazon-style is a whole different ballgame though, and therein lays the challenge. What products should be sold? Are publishers ready for the volume of customer service calls and how exactly do they handle requests for refunds? Is the infrastructure in place to handle real-time credit card transactions?

Sounds like simple questions with perhaps simple answers, but the truth is most publishers do not have the experience and expertise to handle high volume E-commerce.  To be truly successful, it will require a serious investment in additional experienced staff and it means setting up a robust infrastructure for selling goods.

Some publishers are already getting in the game. The trick is to tap into the expertise and brand equity that already resides with newspapers. Wall Street Journal, New York Times and LA Times have all started wine clubs targeted specifically at their existing core audience: white collar, mature and affluent people. In a case study featured in WAN-IFRA‘s Innovations In Newspapers 2010 Report, Canada’s Globe and Mail sold out 500 places on a Caribbean cruise featuring seminars, lectures and discussions led by the newspapers editor and staff reporters and covering topics such as politics, economics, art, cooking classes and wine tasting.

In the last quarter of 2010, LA Times and Chicago Tribune (ChicagoShopping.com) took it a step further by  opening up specific shopping sites in a partnership with NextJump, as described in this article from MediaPost. The key to success for these types of solutions will be the ability to tie reader loyalty clubs to the shopping experience.  LA Times have their SCORE program. At Freedom, we have the Insider Club. There is so much untapped potential in loyalty clubs. Create the connection and start monetizing the relationship with readers.

Group buying pioneered by Groupon have also proven to be a lucrative commerce play for publishers, including Freedom. Last year we launched Deal of the Day at the Orange County Register, Colorado Springs Gazette and a couple of community newspapers. It was a rocky start. We were not sure exactly which audience we would or could attract, and we were not experienced in driving transactions. On top of that, our staff had difficulties getting the right merchants featured with compelling deals. However, after the initial phase we are now consistently seeing hundreds of transactions daily.

E-commerce will not happen only on Publishers’ Websites. In addition, publishers will have to set up shop on facebook and on mobile devices. As the E-commerce experiments start, caution should be taken. Mistakes in this arena will reflect on the core brands and can potentially erode brand equity. But done right, E-commerce represents a clear opportunity to diversify and open up for new revenue streams from both existing and new audiences.

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2 thoughts on “E-commerce Represents New Play for Local Publishers

  1. ericavenue says:

    Nice post. I feel like there are still very few media companies making a serious push for e-commerce- meanwhile you see daily headlines on major retailers (JC Penney), search engines (yahoo, google), social networks (Facebook, Foursquare) and start-ups aggressively creating direct-response and direct-buying platforms (a la ebay or Amazon). If media companies are not going to create such platforms, they’d better partner with them so the industry is not late to the party again.

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