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Publishers and media companies facing AI-fueled disruptions to traffic and revenue may find new revenue opportunities in retail.<\/p>\n
If you believe the Stoic philosopher and Roman emperor Marcus Aurelius, sometimes \u201cthe impediment to action advances action.\u201d Or as author Ryan Holiday put it in his 2014 bestseller, \u201cThe Obstacle Is the Way.\u201d<\/p>\n
Holiday argues that individuals can transform every trial into an advantage through disciplined perception, action, and will. Applied to companies, it is about finding opportunities in every business challenge.<\/p>\n
Hopefully, Holiday and Aurelius are right, because media companies are facing a pretty big challenge right now.<\/p>\n
AI-generated search summaries and chat are reducing the number of visitors to publishers\u2019 websites. Reports from the Pew Research Center<\/a>, Ahrefs<\/a>, Search Engine Land<\/a>, and various academic sources<\/a> suggest that search engine traffic to publisher websites has dropped by 50% or more due to the presence of AI Overviews<\/a> alone.<\/p>\n That is a lot of lost revenue. Most publishers earn revenue from impression-based advertising. For example, a news site might earn up to $80 per 1,000 sessions. A drop in search engine traffic leads to fewer sessions and, in turn, a corresponding drop in revenue.<\/p>\n It has always been more than a little scary for any business to be dependent on Google or other search engines for revenue. So the precipitous drop in organic traffic might be an opportunity for revenue diversification.<\/p>\n Publishers are well positioned for retailing for at least three reasons.<\/p>\n This combination of audience, content, and advertising capability offers at least three possible business models for media companies.<\/p>\n Of these, ecommerce may be the best opportunity. Turning publishing into commerce is more than installing a shopping cart. The new business needs an ecommerce operating system that is different from selling ads and writing articles.<\/p>\n Borrowing from our own David Sasson\u2019s \u201cThe Elements of a (Successful) Ecommerce Strategy<\/a>,\u201d a media company\u2019s ecommerce operating system should comprise three interconnected parts: research, strategy, and execution.<\/p>\n Research<\/strong> identifies the opportunity before the publisher commits substantial capital or organizational attention. It should examine what the audience buys, the problems those purchases solve, which product categories align with the publication\u2019s authority, how competitive those markets are, and whether the likely economics can support a retail business.<\/p>\n Strategy<\/strong> converts the research into choices. A publisher-turned-merchant must decide its customers, tactics, and capabilities. It must also select the appropriate business model, whether affiliate commerce, a marketplace, dropshipping, direct retail, proprietary products, or some combination.<\/p>\n Execution<\/strong> turns those choices into a business and tests whether the assumptions were correct. This stage includes selecting suppliers, building the ecommerce experience, creating product content, establishing fulfillment and service processes, and launching promotions through the publisher\u2019s existing channels. It also requires financial and operational discipline.<\/p>\n The particulars of this ecommerce operating system do not have to be invented from scratch.<\/p>\n Leaders at media companies can use familiar business frameworks to shape each part.<\/p>\n AI search may be the obstacle to traditional publishing success, but it can also force media companies to recognize the value they already possess.<\/p>\n Obtaining audience relationships, editorial authority, customer data, and promotional reach are difficult and expensive for any new retailer. Publishers have those components already.<\/p>\n<\/p><\/div>\nCommerce Opportunity<\/h3>\n
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Commerce Operations<\/h3>\n
Familiar Techniques<\/h3>\n
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