E-commerce to the Rescue?

For many digital news publishers grappling with dwindling advertising and subscription income, e-commerce has started looking like a viable lifeline. But while embedded e-commerce has certainly been a salvation for some, it does come with its own set of risks and challenges. In particular, it raises concerns about its effects on the independence and integrity of the news operation.

The rise of embedded e-commerce in publishing

Embedded e-commerce is appealing to publishers because of the potential to monetize content in a way that feels more organic and less intrusive than, say, an interstitial ad. Embedded e-commerce in the form of product reviews, comparisons, or buying guides have the added benefit of building on the preexisting trust built between the audience and publisher. As The Drum explains, publishers have “acquired audiences who love their content and use it to inform everything from a big ticket investment to an off-the-cuff purchase. Almost all millennials (97%) read online reviews before buying from a business and 89% trust those reviews.”

Many publishers have already succeeded in turning their engaged audience into an additional revenue stream. Press Gazette reports that content monetization platform Skimlinks found their U.K. publisher clients saw e-commerce revenue increase a staggering 80% from 2020 to 2022. “Tech Radar, What Hi-Fi? and Marie Claire publisher Future grew its e-commerce revenue almost five times between 2019 and 2022 to reach £272.7m last year.” Press Gazette also shares that e-commerce “brings in millions of pounds in ‘pretty serious’ revenue” for U.K. online daily The Independent, making up approximately 10% of all generated revenue".

Inspired by these success stories, other major publishers — like Time and the Financial Times — have started following suit. Let’s take a closer look at some of the monetization strategies these publishers are deploying.

From content to commerce

Currently, there are three main ways publishers monetize embedded e-commerce:

• Affiliate marketing — With no upfront cost or risk, affiliate marketing is one of the safest ways for publishers to experiment with e-commerce. All that’s required is including a link to a product within the content. If the link is clicked and results in a sale, the publisher receives a commission. The Drum shares that publisher commissions are “normally between 5-20%,” which might not make for a windfall every time but can certainly yield significant returns if a piece of content takes off.
• Social commerce — Thanks to the rise of shoppable social content, publishers can now leverage their social networks to boost e-commerce activity. Industry leaders like Instagram and TikTok have rolled out specific tools to make social shopping as simple as liking a post, lessening the burden on publishers to direct followers with unwieldy links or complicated instructions.
• Video commerce — As Retail Touch Points explains, “shoppable video is simply a pre-recorded or live video online, where customers tune in to discover interesting products. You can think of it as a show that people watch specifically to shop.”

What’s New In Publishing (WNIP) also identifies several other emerging e-commerce monetization strategies, including online stores selling branded merchandise and apparel, subscription boxes, membership programs, and retail partnerships.

How to make it work

There's no one-size-fits-all solution for creating a successful e-commerce operation , but WNIP suggests three general considerations to keep in mind.

Culture Fit

Not every piece of content — or publication for that matter — is the right fit for e-commerce. The most successful e-commerce applications “are logical brand extensions,” says WNIP, “ones which build on the next steps a user may already have been planning to undertake.”

Examples include cookery channels like Taste of Home embedding links to cookware and bakeware or Marie Claire’s links to beauty products. The Financial Times has recently piloted a successful e-commerce project to sell wines to its readers.

Refocusing operations

The skills required for publishers to produce and create great content do not necessarily coincide with the skills e-commerce integration requires. To bridge this gap, savvy publishers have started onboarding e-commerce professionals. WNIP reports that following Hearst’s December 2021 announcement of a forthcoming luxury e-commerce marketplace, the publication hired April Lane, a 12-year Amazon veteran, as Chief E-commerce Officer.

The field is getting crowded

News publishers are not the only online players who see an opportunity to sell something to engaged visitors. Take social commerce, for example. On the one hand, it represents another avenue for publishers to distribute e-commerce content. On the other, the popularity of social commerce means the landscape is already cluttered, and it’s become increasingly difficult to compete. WNIP cites Amazon’s shopping channel, Amazon Live, and shoppable episodes of Pinterest TV as examples of retailers and social platforms adding their own shoppable content to the mix. “Much of this content is the type of material that has been a mainstay of magazines and cable shopping channels for years. The revenues that these have generated risk being cannibalized by digital platforms.”

Not a universal panacea

But not all successful e-commerce activities guarantee success in news publishing. Buzzfeed, as far back as 2017, according to Reuters, “developed checkout technology, hired warehouse management and customer acquisition specialists.” This head start in e-commerce activity, however, was unable to save the news division which shuttered in April 2023.

Does e-commerce pose a risk to journalistic integrity?

These examples show clearly that e-commerce has indeed provided much-needed revenue support to news publishers in many markets. It has also raised questions about the compatibility between these activities and the journalistic duty to provide readers with objective information 'without fear or favor'.

This concern has already arisen in the past with regard to 'native advertising' i.e. advertising content that could be confused for editorial. “These advertisements that look like real news are labeled as ads, as required by the Federal Trade Commission,” The Conversation explains. “But research studies have repeatedly shown that those labels are largely ineffective at helping readers distinguish between the two types of content.”

Embedded e-commerce entails similar risks: that the need to serve the interests of advertisers may undermine the trust that should exist between journalists and their readers.

Clarity and disclosure

In countering this risk , E-commerce platform technology provider Tipser sees clarity as a priority for the publisher: "If an article contains embedded e-commerce content, it must be clearly listed as a commercial offering. This transparency not only safeguards integrity but also has the potential to turn the article into something that readers will view as value-adding."

WNIP recommends that the publisher also make a clear disclosure of the policy regarding its sources of revenue: "... there needs to be clarity – for newsrooms and audiences alike – around how eCommerce may shape editorial decision making and the nature of any possible financial relationships."

It goes on to recommend: “clear statements on your website, and individual articles, about how any affiliate dynamics work, as well as the editorial process that shapes content reviews and other content.”

A healthy and sustainable future

This may be difficult terrain to navigate. But if publishers can assuage concerns by being upfront and honest about the partnerships and compensation structures underpinning content, then e-commerce has a chance of playing a valuable role in supporting a healthy and sustainable future for independent news media.