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May 11, 2023

Publishers cashing in on e-commerce: How GQ and The Indy are boosting revenue

Publisher revenue from e-commerce grew 80% from 2020 to 2022.

By Aisha Majid

Affiliate marketing is an increasingly important part of the revenue mix for many publishers post-Covid.

Of 65 publishers surveyed in 2022 by content monetisation platform Skimlinks and industry title Digiday, 74% said they used affiliate sales to bring in diversified revenue.

Affiliate marketing, which falls under e-commerce, allows publishers to earn a commission from promoting or including a product or service on their website. According to advertising giant WPP, e-commerce will make up 25% ($9.1tn) of total sales by 2027, up from 19% ($5.4tn) in 2022.

Publisher revenue from e-commerce is also growing. Skimlinks’ UK publisher clients (which include most of the major players) saw their revenue grow 80% from 2020 to 2022. The value of purchases made through these affiliate links in the same period meanwhile grew by 36%, while affiliate traffic grew by 41%.

“The Covid bump has persisted so we’re seeing year-on-year growth for the majority of our publishers,” says Francis Mac Aonghus, senior director of publisher development EMEA at Skimlinks.

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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. The Sun, while running a much smaller e-commerce operation than Future, reported in its latest annual results that growth of its affiliate network was “generating synergies across the News UK Group by creating sporting content shared across The Sun and Talksport”.

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They are among the many publishers that benefited from the pandemic’s overall boost to online shopping. But growth in affiliate revenue has also been down to increased publisher willingness to invest in e-commerce after seeing its potential during that period, says Mac Aonghus.

"Pre-Covid a lot of publishers still had a lot of things they could be doing to improve affiliate as a line of business," he says. "So some of the year-on-year growth we're seeing is publishers not only creaming the post-Covid growth, but also doing things that you could argue, they could have been doing earlier. I would not say that any publisher in the UK has reached the tipping point of what they could be doing and that therefore growth is going to be much harder."

According to Mac Aonghus, one thing that most publishers could be doing more is investing in content such as review and recommendation articles. Publishers, he says, should aim to create around five pieces of content each day for each site in addition to ensuring that evergreen content is regularly updated.

"That is a tough ask when you're writing e-commerce articles, so getting there or putting the resources to equate to that is the first thing that publishers need to look at," he suggests. "There is a lot of investment you have to put behind it but affiliate marketing isn't something where, if I write an article today, I'm going to get my ROI tomorrow. It takes time and you need to rank for it etcetera."

Attracting visitors through SEO, subscriber traffic and email traffic and retaining site visitors through recirculation of traffic is another area where publishers can make gains, in his view.

For some publishers with successful e-commerce operations, their shopping and recommendation sections represent a significant part of their overall search visibility footprint. Data from SEO company Sistrix shows The Independent's Indy Best punches above its weight in relation to the amount of content produced, accounting for over a fifth of the title’s overall visibility in Google search based on its Sistrix visibility score.

Some publishers' shopping sections account for a important portion of their visibility in Google search
Sistrix Google search visibility, shopping sub-domain vs whole domain
Source: Sistrix

Ranking well in search is, however, tricky and a single major Google algorithm change can significantly affect rankings. The space is also increasingly competitive. "Everyone's vying [to rank] for the same product and so that product is attached to the same type of long tail or even short tail key phrase," says Mac Aonghus. "Because there's only a limited amount of space on the first sub-page it's a very competitive environment, particularly if you can't knock off a competitive publisher on there."

Even if a publisher outsmarts competitors in search, changes from affiliate retailers can also affect revenue. In 2020, Amazon slashed affiliate commissions for several product categories, cutting some categories to just 1%. "Where a publisher creates a weak spot for themselves is when they focus too much on a small number of winning URLs or winning merchants," says Mac Aonghus. "A key for successful publishers is merchant diversification."

E-commerce opportunity for publishers is 'much broader' than affiliate marketing

While affiliate marketing is still seen as small fry among many publishers, it is seen as part of a wider e-commerce opportunity at The Independent.

The UK publisher is no stranger to affiliate marketing with its "10 Best…" and "50 best…" series of recommendations dating back to the paper’s print days in the 1990s.

Today, Indy Best is probably one of the best-known affiliate marketing domains among news publishers and arguably a brand in its own right. The opportunity is, however, much broader, says The Independent’s managing director Christian Broughton.

"When people first say affiliates, what comes to mind, particularly for people who aren't directly involved in that side of the business, is quite a lazy assumption that we've got some lifestyle content, we'll just throw in a few links, people buy off the page and hey, some money comes in," he says. "That doesn't do justice to the level of the opportunity, the breadth of the opportunity, the scale of the opportunity and the level of expertise that you need in the business and the commitment you need."

The Independent has one of the larger e-commerce teams among publishers, currently counting over 20 staff. Broughton says that the publisher takes online retail "a lot more seriously" than many others.

E-commerce is one of The Independent’s four priority areas and brings in millions of pounds in "pretty serious" revenue for the publisher, making up around 10% of all revenues. E-commerce, says Broughton, plays an increasingly important role in The Independent’s revenue diversification efforts, particularly in non-advertising revenues.

Revenue, he says, has grown consistently even following the online shopping boom during lockdown and subsequent slowdown, having increased an average of 35% over the last three years.

Key to The Independent’s success in an increasingly crowded field, believes Broughton, is leveraging trust in the Independent brand.

"If you trust us on really hard issues like analysing the economy or reporting on a war, when you see our badge next to a review of something fun like headphones, you know that we've given it the same editorial standards," he says. "I think what makes our e-commerce potentially different from some other people's is that we really do give it the level of expertise and specialism."

But it’s more than just making the right picks. Broughton says that the publisher puts a lot of effort into ensuring that readers receive a good shopping experience, by ensuring that reviews and recommendations link to retailers who will have the product at the right price, have it in stock and ship it quickly. "There's a lot of order fulfilment thinking that has to go on behind the product reviews," says Broughton.

While traditional affiliate marketing in the sense of handing over the transaction in the final step to an external retailer such as Amazon is an important part of The Independent’s e-commerce operation, Broughton says that the publisher takes a wider view of how e-commerce can fit into its brand relationships. "In those really deep, important and meaningful relationships we have with brands we will introduce an e-commerce dimension to it, because usually in some way, they're trying to sell something, they're trying to boost their sales, they're trying to boost their own results.

"Rather than a 20-year-old vision of how advertising could work, if you put something that's very trackable and transactional in there in a much broader picture, we might be making some sponsored TV content for them, we might be doing some big kind of content sponsorship, they might be sponsoring an event or they might be sponsoring a special editorial project that we're doing, but we might also build in something that's that's really meaningful within e-commerce."

The Independent has in the last three years built up its data capacity to better understand the products readers are looking at. This data, says Broughton, is an opportunity publishers can use to sell directly to readers or make other strategic investments.

"E-commerce publishers have an interesting moment in the chain because we see people browsing. Actually when they turn up to the shop to buy stuff they've done all the kind of consideration, all the kind of consumer thought is played out on our site and then we hand over to a retailer just to quickly do the transaction at the end of that process," he says.

"If you've got really good data, why not invest in that? Why not really build out those areas both editorially in your reviews, but you know who would rule out either acquiring a brand or selling something direct to consumer yourself, stocking product?" he says.

While e-commerce is usually thought of as an SEO play, The Independent plans to expand its commerce operations to reach audiences on social platforms such as Facebook and Instagram.

The Independent is also investing in shoppable video through its dedicated online video channel Independent TV, which launched in 2021. "Buying from those kind of cutout images that you often see online you don't get a sense of scale, look and feel and touch, and I think video's just a really good, powerful way of helping people make their mind up."

'The connection for GQ’s audience with shopping is intuitive'

The magazine that became GQ was founded as a trade publication for menswear buyers and sellers nearly one hundred years ago. "Authority in men’s fashion is in GQ’s DNA," says Joel Pavelski, GQ's global director of content strategy.

Being a fashion and luxury publisher whose strategy centres on inspiring readers on how to dress means, says Pavelski, that, "the connection for GQ’s audience with shopping is intuitive". The title's US edition has seven full-time staffers writing, editing and producing content, while the UK team is six-strong. GQ's other editions also have dedicated teams or individual writers based on their size.

According to Pavelski, 70% of the Conde Nast-owned title’s audience visits GQ to learn about what to wear, while 76% of its digital audience say that shopping guides and product recommendations are a preferred content format. Three out of four visitors to GQ.com, according to Pavelski, say that they purchased something following a recommendation by GQ.

According to Similarweb, there were 10.2 million visits to GQ.com in April. Around three in ten visitors, according to Pavelski, come to GQ.com to visit its shopping pages, a number he says continues to increase.

In the US, visitors to GQ Recommends were up 83% year-on-year in 2022, according to GQ's internal data. Expansion of its commerce teams into other GQ markets such as Taiwan and Spain are, says Pavelski, driving traffic growth for the publisher.

While shopping is central to GQ’s identify, Pavelski says that GQ’s commerce and affiliate strategy is entirely editorially driven. The title originally started adding retailer links to its content due to audience demand.

Tools such as curated shopping guides that readers can find through SEO, alerts for sales through the title’s GQ Recommends email have made e-commerce revenue "a very meaningful portion of GQ’s global revenue".

Revenue has grown every year since 2017 when GQ started its e-commerce operation, growing 220% year-on-year in 2022 and is on track to grow again in 2023. Subscribers to its GQ Boxes, a curated box of grooming, fashion and lifestyle products sent out each quarter, have increased by 25% in the past two years. Subscribers can also access a members-only store where they can buy GQ editor-approved items.

Pavelski says GQ is investing more in e-commerce content across multiple platforms including video, social and the web. The company expects that its commerce business will continue to grow by double digits year-on-year over the next five years.

"High quality over high volume" is, however, the priority.

"We are laser focused on what the loyal GQ reader wants and expects from us, which is why we started with our main area of expertise, fashion, and expanded into other categories from there," says Pavelski.

Audiences can expect to see more partnerships between GQ’s editorial, product, and commercial teams, as well as licensing opportunities, he adds. The brand is also broadening commerce opportunities in areas such as grooming, fitness and home where “we see current commerce revenue outstrip the volume of content we’re producing”.

Hear more from The Independent's Christian Broughton on the latest episode of our Future of Media Explained podcast:

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Select and enter your email address Weekly insight into the big strategic issues affecting the future of the news industry. Essential reading for media leaders every Thursday. Your morning brew of news about the world of news from Press Gazette and elsewhere in the media. Sent at around 10am UK time. Our weekly does of strategic insight about the future of news media aimed at US readers. A fortnightly update from the front-line of news and advertising. Aimed at marketers and those involved in the advertising industry.
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