Tuesday, January 5, 2010

E-Commerce Makes a Comeback as Stream of Revenue for Media

NEW YORK (AdAge.com) -- At a time when media is trying to diversify its revenue, big and small brands such as Martha Stewart, The Wall Street Journal, Lucky and Salon have recently introduced new or renewed shopping areas on the web.

What they're finding is that being a media brand may offer some advantages in launching an e-commerce business -- and the web pages where products are displayed are a pretty good place to sell more advertising.

Regular e-commerce companies spend millions on search, e-mail and other marketing expenses to drive traffic and convert sales, said Michael Kessler, managing director at Veronis Suhler Stevenson, a private-equity firm that partly specializes in media. "The media companies have an advantage in this regard, in that their content is already driving significant traffic to their site."

They've also found the insight they have about their consumers -- knowledge typically used to sell ads -- can be deployed to stock their virtual shelves properly. "One of the challenges to a typical online retailer is how to figure out what to sell," Mr. Kessler said. "If you understand your readership and the demographics of your audience really well, you have a kind of information advantage."

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