Advertising or e-commerce? How online media find predictable revenue in tough times

Online media finds itself in a tough spot during the Covid-19 crisis: Traffic to digital platforms as well as the demand on quality content is increasing, but advertising revenues have not kept up with that.

Automotive, retail, tourism and travel have traditionally accounted for 75% of advertising spend in many forms of mass marketing, but now they have shifted away or postponed marketing budgets for a better time. Many advertisers have also been concerned about brand safety.

The Independent argued that media companies that survive the crisis will shift to subscription models. This will be a good strategy for many, but setting up payment walls takes time and they become profitable at a longer investment horizon. The real answer for hedging risks in the future is diversifying your revenue sources.

E-commerce should be considered as an alternative to advertising

Embedded e-commerce means that you add products and a checkout to your website and earn commission from selling products. The key difference to advertising and affiliate marketing is that you retain traffic on your site, with a much higher gross margin per interaction.
An example of embedded e-commerce inside an article about home workouts

Publishers using e-commerce report several times higher earnings per thousand visitors compared to ads. It’s important to keep in mind that a higher CPM is balanced out by the fact that not every page contains e-commerce elements. Not every visitor will be exposed to offers. Even then, a typical result is that publishers end up earning similar amounts or more on e-commerce than with ad tech.

Some of the key differences between advertising, affiliate marketing and embedded e-commerce can be seen in the table below.

During the current crises we haven’t seen major drops in e-commerce, and several publishers are actually going against the stream and growing their sales. This shows that e-commerce is a sustainable approach and good idea for media companies looking to diversify their monetization.

Is it too late to do something about the situation?
In the past, setting e-commerce would have been a project that takes a year – but today it’s different.Technical implementation a Tipser store on your site can be as fast as some days or weeks, because it’s a copy paste job for your developers. Finding the right things to sell in your store takes some days or weeks, but we’ll handle all the logistics so that you don’t need to know anything about payments, support or shipments.

In the end, the most important factor is your ability to drive traffic to your store and shopping articles. If you can get visitors to your store, sales will happen and it will happen immediately.

A few weeks ago we recorded a webinar about how media companies can address the situation with e-commerce. Watch this on-demand video from Tipser to learn about how to move from ad revenue to e-commerce, and how to do it fast.

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