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Oct 02

How Media Companies Can Compete With Internet Sales Giants

Media companies are facing an almost existential threat to their survival. Turnover has long been underpinned by customer shopping offers, but social media and dedicated online shopping sites have hit them hard. 

“The old model for publishers is broken,” says Marcus Jacobsson, co-founder of Tipser, an e-commerce platform for publishers. “Amazon, Facebook and Google are taking the lion’s share of advertising expenditure, leaving other media companies to fight over the scraps. These three companies are also getting better and better at attracting traffic from conventional media.”

Meanwhile, brands are increasingly treating social media as a sales platform. Instagram launched its shopping platform last March; since then, according to Marketing Week. one brand has increased revenue by eight per cent using Instagram shopping posts.  

This undermines the publishers because they are losing sales from their own reader offers in the affiliate market, a growing and traffic-generating sub-sector of the business to consumer (B2C market), whose turnover in Europe is forecast to reach €621 billion this year.

“The reader sees something advertised on a website or magazine, but it’s the end destinations that have the power,” adds Jacobsson. “They are like black holes.”

Usually, when a reader clicks a link that is embedded in the publisher’s content, it sends them to another site containing the web shop where they can place the order. This means that publisher loses the reader traffic.

Tipser has turned this process upside down by enabling the sale to happen on the publisher’s site. With Tipser, readers remain on the site while the actual order is integrated into the retailer’s order system. The publisher stays in control of the traffic and enjoys a higher commission on sales. 

Run from a small pavement-level office on a quiet street near Stockholm’s waterfront, Tipser started out in 2011 when Jacobsson and his two co-founders Jonas Sjostedt and Axel Wolrath recognised a trend with bloggers and influencers beginning to change how consumers spent their money. It was a slow burn at first until publishers began to recognise they needed to change their sales models.

As they did, Tipser picked up speed. In the last three years it has acquired 15 clients, seven out of the top ten biggest media publishers in Europe, such as Burda and Bauer in Germany and Bonnier Publications and Schibsted in Scandinavia. Titles where Tipser’s content is embedded online include InStyle, ELLE, Harpers Bazaar, Cosmopolitan, Grazia, Closer and Dagens Nyheter.

How It Works 

Tipser creates a digital store for the publisher onto which retailers can upload an inventory while the publisher selects the products that they think readers are likely to buy. Payment providers’ software is integrated into the site. The publisher pays a monthly fee for access to the Tipser toolbox to manage the web shop. 

Tipser’s clients, the media companies, have access to an inventory of up to a million products. The key to success, Jacobsson says, is to select the products that are most relevant for the publishers’ audience. 

As shoppers switch more and more to online shopping, an unanticipated bonus has been an opportunity to push for more environmentally friendly kinds of spending, particularly important to younger members of Tipser’s team.

Jacobsson explains: “As we help publishers with embeddable e-commerce, we are very close to reader trends and sentiments and see a huge rise in climate awareness. So we perhaps have a better opportunity to push for more environmentally-friendly consumption than some classic e-commerce players. E-bikes, for example, are one of our best selling lines.”

Publishers can build up a big presence in lifestyle niches; Jacobsson points to successful reader offers in Elle and Cosmopolitan. environmentally-friendly consumption

Tipser has already moved beyond its Scandinavian roots into Poland, France and the U.K. That leaves the rest of Europe as well as the Middle East and the U.S. Asia, particularly China, looks a little less certain to Jacobsson because of very different e-commerce platforms and possible entry barriers. 

In three years, Tipser has not yet lost a client and the company is scaling up fast. It has grown five times as fast over the last year as the previous one. Within a year, Jacobsson believes that Tipser will be profitable. 

Permanent link to this article: http://homebiz2bizreview.net/internet-marketing/how-media-companies-can-compete-with-internet-sales-giants/

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