As the relationship between content and commerce evolves, community will become key
It used to be simpler. Advertising was the main bridge between content and commerce. If you had the sort of business that generated an audience (a content business), you'd monetize that by selling ad space to the sort of businesses that sold "stuff" (a commerce business).
Then, along came the internet, and the amount that content businesses could get paid per eyeball fell drastically relative to the old print world. The content businesses that worked online were those that either developed a radically lower cost of content creation (esp social) or those that were able to generate vastly more eyeballs. But many content businesses still have the relatively high cost of professional content production and haven't expanded their readership online enough to compensate for lower ad rates. These businesses, in particular, are (finally) starting to get more creative about alternatives to advertising to monetize their audiences.
Today, the New York Times reports on an interesting example. The title says it pretty clearly: Magazines Begin to Sell the Fashion They Review. This struck us because we've been working with another business that has been pursuing that strategy for a few years. FW Media is a print publisher for enthusiasts of writing, painting, collecting, and similar subjects.
When they brought their publications online and saw the fall in ad revenue, they tackled the changed environment head on. Instead of selling their audience for pennies per visitor to advertisers, they decided to capture 100% of the commerce value of their visitors by opening their own online stores offering products that the readers of their content properties would want.
It's a great case of taking lemons and making lemonade: the internet diminished their advertising revenue, but at the same time it made it possible for them to skip the advertising step entirely and directly fulfill the commerce demand they were creating. And now, in the NYTimes, we read:
“What magazines have always done is to create desire in consumers,” said Mr. Granger of Esquire. “The next logical step is to fulfill that desire by selling the product. If we don’t do it, somebody else is going to.”
While this strategy of directly joining content and commerce under one roof appears to be working for FW and may also work for Vogue, GQ and Esquire, we think there is a third path to bridge content and commerce that will prove at least as powerful: community. In addition to changing the way content is delivered and stuff is bought, the internet has also made the way people participate in both for more active.
Got an opinion about something you just read? Comment on it. Got an opinion about something you just bought? Review it. Got a question about something you are thinking of buying? Ask about it. Bought something? Answer those questions. Community no longer means "the people who read your content" or "the people who buy your stuff". Now community means "the people who interact with each other around your content and your stuff".
Today, content site communities and commerce site communities are separate because that's how the technology works - one community per property. But technology limitations fall when they don't match the way people really interact.
Communities, in the real world, are defined by shared interests, not URLs. So in the future we see, whether the commerce and content businesses are managed separately or share a roof, their communities will be joined.
Fashionistas will read Vogue, buy from Saks, and interact with each other seamlessly on both. Watercolorists will learn technique at The Artists Network, shop at NorthLightShop, and interact with each other seamlessly on both.
Photographers will read Popular Photography, shop at Adorama, and interact with each other seamlessly on both. And that seamless interaction will provide a new and powerful way for content businesses to monetize.
So if you manage a content business and are trying to find more value in your audience, think about building ecommerce capabilities, and also think about ways to build stronger bridges to your ecommerce partners by leveraging your shared communities.