How publishers pull off e-commerce revenue without eroding trust

But affiliate revenue also presents publishers with a unique ethical challenge: how to avoid the appearance of shilling for consumer-goods companies in the name of making money, which could risk eroding reader trust and ultimately turn their publications into glorified catalogs.

Digiday spoke with executives at three publishers — IDG, Gear Patrol and The Independent — about how they’re embracing affiliate linking while making sure it doesn’t affect their editorial missions.

IDG
Prior to fully embracing affiliate marketing in 2009, publishing house International Data Group (IDG) was dabbling with price comparison linking — showing how much an item was being sold for at various retailers and receiving a small commission for directing readers to those e-commerce websites. That constituted less than a percentage point of revenue across all IDG titles (e.g., Macworld and TechHive), according to U.K. publishing director Simon Jary.

But affiliate marketing has increased by 425 percent since IDG began using affiliate-link provider Skimlinks in 2009, and it now constitutes 6 percent of total revenue, Jary said. Skimlinks helped grow IDG’s affiliate revenue by providing links that will make IDG the most money (that is, those that elicit the highest purchase rate for a given product).

Jary declined to comment on exactly how much IDG makes from affiliate marketing a year, however.

While a growing business segment, affiliate marketing makes Jary wary. It can lead to publications producing “affiliate bait,” articles geared more toward to moving gadgets rather than honestly reviewing them. To that end, IDG’s editorial staffers don’t include affiliate links in their stories; rather, they’re added by the marketing team after the story is written.

“We don’t think readers or search engines will trust affiliate bait,” Jary said. “If an article has potential for generating affiliate revenue, then it’s because readers are interested in that content, and, therefore, it’s an article that we should be writing anyway.”

Now, IDG is trying to use affiliate marketing to prove it can influence more than just gadget purchases. It’s using cookies to track whether someone reads a tablet review on one of its sites and subsequently buys a tablet and other, non-related items such as boots and a t-shirt in a single order, Jary said. IDG would like a commission for all three of those items since its review initiated the purchase session.

Gear Patrol
When Gear Patrol, a Web publication that covers everything from stereo equipment to treehouses, signed up for Amazon’s affiliate program five years ago, the initiative created $20,000 in revenue over its first 12 months. But affiliate linking has quadrupled in revenue since Gear Patrol started using an affiliate link automation service three years ago, and it now accounts for 10 percent of overall revenue, co-founder Ben Bowers told Digiday.

That growth has shaped how Gear Patrol, now in its ninth year, determines what to cover. The site ran a story two years ago about the best duffel bags, reviewing 30 of them. But the story continued to generate sales and affiliate revenue months after publication.

That feedback convinced Gear Patrol to update the buying guide twice since it was first published in order to include newer bags and ensure all the bags were still available at their respective e-commerce destinations. And it has also convinced Bowers that Gear Patrol readers had an appetite for travel-related products and reviews.

Still, Bowers, like Jary, is approaching the incremental revenue stream with caution.

“We don’t necessarily go out and create content with affiliate marketing in our minds,” Bowers said. “The most important thing to us is our brand. The success we’ve had is because we’ve maintained a sense of style and curation.”

The Independent
The Independent ran its Indybest consumer reviews section for 10 years before it started monetizing those stories with affiliate links in January 2013, Sandro Del-Grosso, the publication’s manager of digital partnerships, told Digiday. Prior to that, editors were often writing out a product’s URL without adding a hyperlink as the stories made their way from print to the Web. At best, they would link back to its Amazon listing.

“You have to remember that a lot of time, the content came from print, which couldn’t have a full hyperlink,” Del-Grosso said. “There was no consideration for revenue.”

But monetization was immediate once affiliate links were added to the hundreds of articles in Indybest’s archive. Indybest went from creating zero affiliate revenue to up to £150 — $222 at the current exchange rate — per day practically overnight. Now it generates nearly £700 (more than $1,000) on a good day, making up 10 percent of total revenue. Particularly popular are the section’s household appliance reviews.

Affiliate revenue has been such a boon for the newspaper that it’s been able to add editorial staffers while the rest of the newspaper industry continues to lay people off, Del-Grosso said.

But Del-Grosso was adamant that affiliate revenue has not affected the site’s editorial operations.

“Rather than just trying to squeeze revenue out of everything, it’s about how can we use existing content to grow revenue,” he said. “We’ve kept quite a nice distance from editorial. … We report back to them about visibility and what’s working well, just like they would do with reports on their traffic. But there’s no influence, and we’re quite proud of that. We need that editorial integrity for long-term growth. Otherwise we’re not going to have a sustainable section.”

Images courtesy Getty Images, Shutterstock

Correction: A previous version of this article misspelled Simon Jary’s name as Jarry. The reporter regrets the error.