What’s the Best E-Commerce Option for You?
Third party services, white label platforms available for publishers.
As the e-commerce push continues in the publishing world, companies may be overwhelmed by the ways in which to roll out their efforts. Some companies are utilizing large group buying platforms for their e-commerce purposes (recent partnerships include Hearst and Pixazza, and IT consulting firm’s Ajilitee’s alliance with Groupon) while other publishers, such as F+W Media, are hosting e-commerce storefronts.
For publishers not ready to fully operate their own e-commerce business, there are several companies now offering assistance in development. Here, FOLIO: speaks with two service providers, both with different business models, but a shared goal: increased revenue through online sales.
Third Party Convenience
At Rapidbuyr, EVP of product development and co-founder Kevin Wells brings years of publishing experience to the e-commerce game. Before launching Rapidbuyr, Wells worked at tech enthusiast publisher Ziff Davis for six years; there, he acted on the print side with PC Source, PC Computing and other titles as creative director before joining ZDNet as one of its first directors. Other members of the management team have put in time at Reed Elsevier, Dow Jones and CNET.
Wells sees e-commerce as a large revenue booster for publishers, especially the b-to-b sector, “Currently, most publishers are controlled circulation: the BPA world as opposed to ABC world. You can’t make any more money from your subscribers besides advertising; everyone’s gone to e-newsletters, white papers, etc., in terms of trying to provide connective tissue between your advertising and your audience.”
Being a former member of the publishing world, Wells says his company offers a neutral third party specifically removed from the oft-sticky church vs. state relationship of editorial and advertising objectives. “We’re not beholding to any sort of manufacturer to put their offers in front of anyone else, so to speak,” says Wells.
When a publisher partners with Rapidbuyr, the company provides and hosts a co-branded area on the publishing site, and is integrated into the publishers’ navigation bar. Advertisers may provide the deals available through the deal option, and Rapidbuyr also has a sizeable list of suppliers and products to supply to publishers for deal opportunities.
To glean a list of users interested in a deal option from publications, editors and publishers will send out an email blast to opted-in users from their databases. Promotions are often offered to inspire users to opt in to the deal sector, including coupons and/or a credit towards the first purchase. Then, user demographics are sent to Rapidbuyr, where they use user analytics to hone in on appropriate products for deal offerings. In the near future, Rapidbuyr plans to utilize surveys and other customer-reaching channels to find out what users are interested in purchasing.
After the merchant is paid for the product, Wells says net revenue is split between Rapidbuyr and the publisher. Rapidbuyr’s slice of the net rev is variable, ranging from 20 to 40 percent of the remaining amount.
Current RapidBuyr clients include American City Business Journals, TechTarget and CNET.
Licensed Software for Publisher Control
For publishers who want to launch e-commerce efforts with more in-house control, (but don’t have the bandwidth or resources to develop the technology) companies like Tippr offer an e-commerce platform available for publisher branding. CEO Martin Tobias worked with Microsoft and various other software companies before starting Tippr in 2008.
As Tobias points out, by licensing a software service instead of outsourcing deal creation to companies like Groupon or Living Social, publishers can brand the deals as their own; lending a level of editorial credibility to discount curating the audience can see. In addition to brand extension, by licensing software, publishers maintain their client base.
Tippr launched tippr.com as its deal website in February 2009, “to prove the scalability of the platform,” says Tobias. The company began officially working with publishers about a year later.
Today, Tippr launches its affiliate program, with 1,200 affiliate sites available to publishers who partner with Tippr. Affiliates, culled by Tippr staff, are offered compensation for creating content and reposting discounts. Tippr takes the small amount of revenue gained from discount sale; the source (be it the publisher or deal aggregator like Cool Savings or Yahoo) who sold the deal gets a larger cut. The affiliate will then get 20 to 40 percent of the cut.
Of 1,200 affiliates involved in Tippr’s network, Tobias says 1,000 of them are hyper local blogs or very mall regional and/or vertical publishers. For each of the 1,200 affiliates, “Each of those had to get a unique ID and custom feed,” says Tobias.
If a user purchases a coupon outside of the publisher’s website, they are automatically made a subscriber to the site. Typically, it costs $10-15 per subscriber through outbound CPM campaigns, according to Tobias.
Basic set up fees run from $5-10,000, depending on amount of services needed from the e-commerce company. Fees run higher if the publisher would like Tippr to take on customer service options, discount gathering, etc.