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Media companies riding the eCommerce wave seek to consolidate their successes

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Last year supercharged eCommerce, with lockdowns ensuring that both the total number of online shoppers and frequency of purchases increased fivefold. So which publishers are taking advantage of that? Chris Sutcliffe rounds up the key eCommerce moments of the year as part of our Media Moments 2021 report.

eCommerce retailers were busy counting their money when January rolled around. After the non-stop promotion of online deals around Black Friday and (sigh) Cyber Monday for the previous years, audiences across Europe and the US were well-placed to ride the wave of lockdown Christmas spending. At £18,626 million, that total increased by 56.2% more than in the same period in 2019 in the UK alone. 

While many of the beneficiaries of that were the old-school retail giants and supermarket chains that had quickly pivoted, that spend was also a boon for the publishers with strong pre-existing eCommerce and affiliate capabilities. While nothing quite matched the growth seen during the first few months of the pandemic – in which, for example, Hearst UK’s eCommerce revenue grew 322% during the second quarter of 2020 alone – publishers’ eCommerce ambitions continued to expand. 

A year of expansion

At the beginning of the year the companies that had ridden the eCommerce wave sought to restructure or consolidate their successes. After a difficult year in terms of monetisation, Dennis owner Exponent spun off its big-ticket automotive portfolio – and the eCommerce business it had built around it – into its own company in March. 

Autovia was an attempt to draw a line around the car content and commerce division that had previously served the company so well, and to control every part of the buying process from ideation to creation to recommendations. At the time, Autovia’s chairman Peter Plumb noted that the need to own the entire ecosystem lay at the heart of a successful publisher eCommerce strategy: 

“The investment pouring into online car sales over the last two years has jump-started a sector-wide ‘race to digital’, opening up opportunities for those with the broadest and most engaged reach, the richest audience data and the most trusted brands & content.”

Nor was that strategy confined to automotive and tech. In Sweden, Aller Media acquired wedding-based provider and platform My Perfect Day in May. It based the purchase on a study of its audience habits – in part the significant opportunity to control that lucrative eCommerce space from even before the initial proposal. Fredrik Blomqvist, Head of eCommerce at Aller, said: “They are spending more time on self care and spending more money shopping online. While they are spending time at home they want to be inspired and find joy. They want to try out new recipes, purchase new products.”

By contrast, some brands saw the eCommerce boom but lacked the ability to take control of an entire market. Some resorted to simply slapping branding on clothing and announcing it had an eCommerce strategy, as Forbes attempted back in July.

Other UK publishers, meanwhile, saw advancements in tech as the means to insert their valuable print products into the eCommerce funnel. In May both Grazia and Heat began incorporating scannable images – without the need for QR codes or watermarks, which took readers directly to a storefront for more information and purchase options. It, and similar experiments around the globe, are an attempt to widen the opening of the purchase funnel still further.

That expansion was driven in part by the boom in tech solutions for eCommerce enabled by third parties and other platforms. Virtual try-ons, always-open virtual stores and a number of dedicated filters and lenses across platforms like Instagram and Snap provided publishers and brands alike with the opportunity to sell directly to consumers using AR and XR.

It would be impossible to discuss eCommerce in 2021 without discussing Future plc. After announcing over $1bn in eCommerce and affiliate revenue in 2020, the UK-based publisher made a number of acquisitions to bolster that success still further – including buying up the rest of Dennis for £300m in late summer. Analyst Colin Morrison noted “[The Dennis acquisition] creates the opportunity for Future to grow further and faster in the US and also in financial media. It is also expected to apply its successful e-commerce affiliate marketing skills to the new portfolio.”

Opportunities for profit, but clouds gathering

As the success stories from 2021 have demonstrated, there is huge benefit to being the biggest player in any given vertical when launching an eCommerce strategy. As a result we should expect to see much M&A activity dedicated to both removing potential competition for affiliate revenue and from those cash-rich publishers seeking to expand into new markets entirely. We should be aware, however, that the lingering impacts of the pandemic on trade and supply lines will put the brakes on some of those ambitions.

At the same time the long-held eCommerce ambitions of digital natives like BuzzFeed should continue to accelerate: in its September results the company noted that – while still unprofitable – it saw significant headroom in its commerce plays. “The acceleration of growth across our business in the first half of this year, combined with the ongoing shift in our revenue mix to the higher-margin revenue lines of advertising and commerce, drove significant margin improvement and a swing to positive Adjusted EBITDA in H1”, said BuzzFeed CFO Felicia DellaFortuna at the time.

And – as ever – the jostling for position among tech providers and publishers will continue. Shoppable commerce on platforms like Snap still outpaces that of publishers when it comes to XR, while propensity to buy on those platforms continues to grow. It is incumbent upon the traditional publishers to ensure they do not become over reliant on those platforms for eCommerce and affiliate revenue as they once did for advertising revenue.

This article is an extract from our annual report, Media Moments 2021. For more on this chapter including case studies and key statistics, download it now for free.