How Hearst UK’s e-commerce revenue grew 322% during the second quarter
A few months ago, when millions of people were still in lockdown and mostly confined to their homes, the team at Hearst UK noticed the peculiar purchase of a £4,000 ($5,282) Positano lace dress through one of its magazine titles.
“That’s high-ticket, that was a surprise,” said Hearst UK chief commercial officer Jane Wolfson. “Where are you going to wear that dress during lockdown?”
Such has been the erratic shopping behavior characterizing the last five months for so many publishers, who have had to swiftly adapt to peoples’ buying whims, weather commission rates dropping to zero and contend with merchants dropping out of programs for stock and supply-chain issues.
Despite this, e-commerce has been one of the bright spots for publishers’ stretched and strained ad revenue lines. Hearst saw e-commerce revenue grow 322% during the second quarter compared with the same period the year before. While the company wouldn’t say how much revenue that equals or what base the growth was from, that lift had to take some of the sting out of cratering ad sales figures. Still, with forecasting largely out of the window, predicting how long the ride will last is anyone’s guess.
Now into the third quarter, Hearst UK is seeing normality return to some e-commerce categories: Health and fitness is stabilizing, home and garden categories are still high as people settle into the reality of spending more time at home.
“The biggest drop in sales are for things like face masks,” said Betsy Fast, chief content development officer at Hearst UK. “So many of our sites were winning on face masks since it’s something everyone needs. Now that’s leveling off and we’re finding other ways to provide recommendations, whether it’s specialized light-weight masks or exercise-ready masks.”
According to affiliate network Skimlinks, the trend for face-mask content is booming. Variations include face masks for kids, face masks for bridal parties, or face-mask cases and skincare to combat bad skin from wearing face masks.
Hearst UK began diversifying into affiliate and e-commerce revenue lines in 2017. All titles dabble in some form of affiliate, the magazine group, for example, works with networks like Skimlinks and Amazon. Titles leaning more heavily into e-commerce include Cosmopolitan, Good Housekeeping, Digital Spy and Runner’s World. The shoppable ad units it offers as part of client campaigns have been getting more sophisticated by driving product sampling through social links. Over the last year, the magazine group hired eight shopping editors to accelerate growth across tech, beauty, fashion, home and travel sectors. All editorial teams work on commerce content.
“Hearst UK is the largest publisher we work with in the U.K.,” said Dunia Silan, vp revenue for Europe, the Middle East and Africa at Skimlinks. “The revenue they generate, the commission they earn and the amount they have grown year-on-year has surpassed any other growth for U.K. publishers.” Partly that’s thanks to the Hearst’s laser focussed internal editorial-driven team that keep on top of the trending products and pivoting when stocks run short, she said.
Since December, Hearst has been offering product sampling as part of e-commerce-led ad campaigns which have become more popular with beauty brands while stores have been closed.
“When you have a shop front where people can’t purchase, consumers become even more reliant on trusted sources. You don’t have the same face-to-face interactions with people behind the counter,” said Wolfson. “More beauty clients are coming to us for help.” In October, Hearst is running a campaign with a client, which it wouldn’t name, that uses augmented reality for people to trial lipstick color.
As more brands choose to go direct-to-consumer through e-commerce via publishers or big tech platforms, that can mean ceding the relationship with the customer and their purchasing data. “Think about retargeting abandoned baskets,” said Ryan Storrar, svp head of media activation at agency Essence. “If that basket is on Facebook, you just don’t see it. There is a tension there.”
During the months of lockdown, e-commerce exploded as advertisers shifted budgets from upper funnel media spend quickly into e-commerce, where a decade’s worth of retail sales across the industry was made on U.S. digital channels in eight weeks, according to stats from New York University Professor Scott Galloway, via WARC. Now, the bottom-funnel activity is starting to level out as brands that made initial adjustments have started more brand-based marketing, said Storrar. “Time will tell whether that revenue is incremental or at the expense of something else.”
For Hearst, the fourth quarter — typically a busy time for publishers — looks primed for more growth. Compared with this time last year, more advertiser-led briefs are coming in with commerce as a component within health, fitness and fashion. The company said it’s partly, but not exclusively, driven by the holidays.
“Hearst’s purpose is to get more out of life,” said Fast. “From mid-March that really became our MO: Helping readers find what they need and couldn’t get before, help them pass the time, help them with life spent at home.” E-commerce, at least for now, has helped the company deliver on that proposition.
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