Ben Lerer is sweating hard and running late--he’s just come from jogging in downtown Austin, and he’s due to meet up with a bunch of top media and ad executives in town for a marketing conference. The topic: merging content and commerce, an idea that’s captured the imagination of both media and retail CEOs in recent years but, so far, has failed to produce many great results.
Still in his jogging clothes, Lerer settles in at his hotel bar to lay out for me, over a couple beers, his vision for how his company, Thrillist Media Group, is finally solving the content-commerce conundrum. The New York-based company, which began as a sort of Daily Candy for dudes, a collection of local lifestyle email newsletters about things like girls and beer and barbecue, has grown up into an impressive $100 million business--thanks in large part to its 2010 acquisition of a then-tiny street-wear ecommerce site called JackThreads.
Buying JackThreads was a prescient move, even if Lerer didn’t know at the time exactly how it would eventually work with Thrillist. But content companies--and especially digital content companies--are ever more desperate to find new revenue streams beyond ads, and retail companies always need effective ways to draw in shoppers. In theory, merging a digital publication with an ecommerce engine works great for both sides, because online readers who get inspired to want something are only a click away from being able to buy it. “In a digital world, suddenly the point of inspiration and point of purchase have come together,” as Lerer puts it.
The problem, he says, is that most companies attempting to bridge the divide are doing it all wrong. The secret lies not in slapping opportunities to buy stuff to the end of articles, but rather in how the company can share data between the content and commerce operations. That, in turn, creates new advertising opportunities that otherwise wouldn’t exist.
Not that Lerer didn’t learn the hard way.
Two years ago, to plenty of media attention, Thrillist launched a new publication called Crosby Press that was going to solve the content-and-commerce problem. Crosby Press would allow readers to purchase items from JackThreads without having to leave the publication for a separate site. It wasn’t Thrillist’s first effort to merge content and commerce. Several years earlier, the company had launched a product called Thrillist Rewards, which offered Groupon-style flash sales for special events at the kinds of bars and stores Thrillist writes about.
Neither Thrillist Rewards nor Crosby Press exists today, and many other companies’ similar attempts at integration have fizzled as well. On the publishing side, Refinery29 dropped its ambitions to be a shopping destination in late 2013 to focus on ad sales, while retailers such as the Gilt Groupe have ended their adventures in editorial (remember when Gilt trumpeted its hiring of the celebrated former Gourmet editor Ruth Reichl for Gilt Taste, only to quietly shutter that site 16 months later?) and refocused on their core ecommerce businesses.
But as Thrillist turns 10 this month, Lerer is more bullish than ever about the intersection of media and retail--only he’s found that it doesn’t look much like those earlier attempts.“The first place anybody goes is, if you’re an expert in a subject matter, sell the stuff in that subject matter,” he says. This is what both Thrillist Rewards and Crosby Press did, working on the assumption that the content produced by the media business would draw in people who would then be inspired to buy stuff. “What gets lost there is that you actually need to first think about what the hell your audience wants to spend money on, and how you can build a real business around that. Just as I built a media business, how can I build a commerce business that stands on its own? As opposed to just jamming commerce into the bottom of every article.”
Similarly, Lerer says, retailers who think they can draw in more shoppers by publishing more content need to think about building their media operations as if they are standalone businesses. Both sides need to be “best in class,” he says, and only then can they truly complement one another.
It sounds trite on the surface--make it good--but it’s the key to unlocking the hidden potential of the content-commerce merger. “What ends up happening is that the two businesses, if you build them the right way, can actually add a lot of value to one another, so you get a virtuous circle--but just not in the way you might expect. It’s not that we create a lot of content in order to draw in a lot of users who we can then send down the funnel to buy.” Instead, he says, “It’s actually more about data.”
More specifically, the combination of high-quality audience data on the media side and detailed purchasing data on the commerce side creates powerful new ways to target valuable slices of the audience with brand messages that go way beyond display ads. “We’ve been able to build a slew of different ad types that wouldn’t be possible otherwise,” Lerer says.
He gives an example of targeting a highly specific subset of purchasers on JackThreads--say, guys in New York and Los Angeles buying particular kinds of items on a Friday night from five particular brands. Thrillist has a deep well of information about its readers’ and shoppers’ preferences, because it shares that audience across both businesses. “We can hit them with a targeted message that a new Showtime show that’s debuting in an hour just picked up the tab for their purchase.”
Taking it a step further, he says, such a program could offer different levels of reward for different shoppers. “If we know through our database that a user is a social influencer, maybe we can pick up the whole tab and encourage them to go share the message about the show. Other people, we could offer them something less large than the whole purchase--expedited shipping, or access to a limited-edition product.”
Clients as big as GE and Procter & Gamble have worked with Thrillist to come up with such new ad forms. For P&G, Thrillist created sponsored content about how to wear and care for colorful clothing, and then used JackThreads’ distribution capabilities to ship samples of Tide pods to people who bought colorful shirts. “The idea was that we could work with a brand to actually physically put a product in people’s hands,” Lerer says.
For GE, which was celebrating the 45th anniversary of its helping engineer the first moon landing, Thrillist created a commemorative “moon boot” sneaker and sold it through JackThreads after publishing articles about the landing and the shoe. All 100 pairs of the bizarre silver high-top sold out immediately.
“How many retail businesses have been built on the backs of media businesses?” Lerer asks rhetorically. “I’d argue almost all of them.” His point is that media--the content and the advertising--has long been the way brands build awareness with their target customers. So why can’t media brands themselves get a bigger piece of the action? “A media business has to take the relationship it builds with an audience and not just rent it to third parties [via ad sales] but actually use it to build a commerce business.”
For Thrillist, the strategy seems to be working. Jackthreads’ ecommerce business makes up about 75 percent of the company’s roughly $100 million in annual revenue, but the percentage of ad sales on the media side is gaining. “Media is growing a little faster,” Lerer says, “and a lot of our ad growth is coming from leveraging the commerce to create more interesting ad products.”
He checks his watch; he’s running late, and some ad execs are waiting to hear what they can learn from him.