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Media Companies’ e-Commerce Strategies

Published by: IDATE

Published: Feb. 1, 2009 - 30 Pages


Table of Contents


1. Executive Summary

2. e-commerce market bigger than online advertising

2.1. Limits of the ad-funded only model

2.1.1. Print media incapable of compensating online for the drop in print ad revenue

2.1.2. Internet radio: the mass market trap

2.1.3. Video services: CPM still too low

2.2. e-commerce market booming

2.2.1. Sizeable rise in sales

2.2.2. A bigger and more profitable market than online advertising

2.3. Internet merchants competing with media companies over content

2.4. The media and offline commerce

3. Media company sites’ e-commerce best practices

3.1. Monetising traffic and affiliation

3.1.1. The Sky portal strategy

The affiliation system

3.2. Consumer services and price comparison

3.2.1. Bild.de “serving” readers

3.3. Licensed and by-products

3.3.1. Clear Channel radio stations playing the iTunes card

3.3.2. CBS radio: impulse buys, licensed products and ticket sales

3.3.3. Mediaset sells products derived from its programmes

3.4. Targeted e-commerce according to audience

3.4.1. Euronews recommends a language learning method

3.4.2. The Wall Street Journal sells no-name wine

Operating a no-name online shop

3.4.3. El País selling high-tech products online

3.5. Close incorporation of e-commerce into editorial content

3.5.1. Fox Sports associates each sport with an online shop

3.5.2. Elle.fr increasing its stable of online shops

4. Diagnosis

Le Figaro group’s e-commerce models

Tables and figures

Table 1: Top 10 news and media sites - USA - January 2009

Table 2: Broadcast and online audio services market in developed countries

Table 3: Growth of online video viewing in France, Germany and the UK between April 2007 and May 2008. 10

Table 4: Online advertising vs. e-commerce: revenue and net margin in 2007

Table 5: Analysis of "technology and content" costs on Amazon.com

Figure 1: American newspapers’ ad revenue

Figure 2: Growth of B2C e-commerce revenue, 2006-2012

Figure 3: Comparison of online advertising and e-commerce net margins in 2007

Figure 4: Sky.com portal traffic ranking

Figure 5: Product displayed on sky.com

Figure 6: Affiliation on Sky.com

Figure 7: Shopping.com price comparison, available on bild.de

Figure 8: Buying a song in MP3 format via radio station Fresh 102.7

Figure 9: Buying a mobile ringtone via radio station Sunny105.9

Figure 10: Ticket sales via 923krock.com

Figure 11: Catholic TV online shop

Figure 12: Mediaset online shop

Figure 13: TellMeMore pop-up after the free lesson on Euronews.net

Figure 14: The Wall Street Journal’s online wine shop

Figure 15: El Pais consumer electronics shop

Figure 16: Online shop associated with the Fox college sports channel

Figure 17: Online shop associated with the Fox Soccer channel

Figure 18: Online shop associated with hockey on the foxsports.com portal

Figure 19: Elle online shop

Figure 20: Co-branded Elle/Espace Max shop

Figure 21: Products sold on the co-branded Elle/24H00 shop

Figure 22: Media company websites’ different e-commerce models

Figure 23: Media companies’ e-commerce strategies

Abstract

Media companies are having to contend with greater competition on the Internet than in the physical universe: pure players, content aggregators, other media UGC (User-Generated Content). CPM is lower: an online consumer generates five to 10 times less ad revenue than an offline consumer.

At the same time, the e-commerce market is growing steadily, added to which media companies are already veterans of offline sales (shopping channels, licensed products, co-branded and special editions).

The media now have the opportunity of developing into veritable media stores by incorporating e-commerce offers into their editorial content.

Depending on their size and how qualified their audience is, traditional media companies’ websites can roll out different e-commerce strategies:
  • simple affiliation to monetise audience,
  • price comparison service,
  • licensed products,
  • specialty e-commerce,
  • e-commerce incorporated into editorial content.
The different models can be combined depending on the product involved, and the cohesion with the company’s core business and audience.

Media companies’ websites would also do well to develop a two-sided business model, whereby each side feeds the other: ad revenue and the media store business.

Please Note:The online download version is for a one to five user license.

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