E-commerce and News, Lessons from the UK's Telegraph

Posted on 17. Jul, 2009 by in Revenue

Revenue, revenue, revenue. For good reason in this economy, all of the sites we’ve talked to so far have wanted to hear ideas for making more of it.

So we’ve been a bit surprised at how few are experimenting with e-commerce, which is frequently held up as a strong potential revenue stream for online news. Sure, we’ve heard from a few sites making good money from t-shirt sales and affiliate programs.

But American publishers should heed the experience of the Telegraph in the UK, which started launching a series of e-commerce efforts in 2008. The 154-year-old newspaper now says that a hefty percentage of its revenues come from online users buying those goods and services directly through the site. That’s a nice figure going onto the P&L as advertising revenues continue to shrivel.

“One shouldn’t expect advertising on its own to support the costs of a newsroom,” says Edward Roussel, the Telegraph’s digital editor. “E-commerce is less cyclical, less prone to downturn and more reliable as a revenue stream.”

The Telegraph has been quite successful getting readers to pay for access to games or to services that highlight the organization’s databases. The site’s fantasy football and cricket service and CluedUp, a brand aimed at puzzle nuts, have been perhaps most successful. The Telegraph also gets a commission on transactions made with their personal finance and sports betting partners.

TelegraphShop - e-commerce and the newsOf course, the Telegraph sells merchandise, too, ranging from tulips or a pond vacuum in the garden store, to Panama hats sold in the travel section. Roussel says developing a system that seamlessly matches product to editorial content is still a challenge, but he envisions a day when the e-commerce gardening application will recognize the rose in an article and serve up offers for that rose or something close to it.

Roussel says not all merchandise lines work as well as others, saying the fashion shop, for one, hasn’t broken through as hoped.

“That’s not how people view a site like ours, they don’t view us as a destination to shop,” he says. “That means we have to work harder to come up with the partners that will work.”

Roussel says that publishers need to embrace the ways in which the web has drastically “shortened the transaction chain” between advertiser and consumer. Whereas advertising used to be about delivering information to readers so they could then go out to make a purchase, Roussel says, “now we can say: do it here and now. That’s the value added for news sites–allowing people to make the acquisition on the spot.”

Far better, he thinks, for news sites to embrace this updated approach–providing valuable services for a fee–than to erect paywalls around content that in the age of Google is readily available elsewhere (an opinion echoed here today).

“The fundamental value of journalism is that you pull in a wide audience, then you can direct them to a series of high value services that they’ll pay for,” Roussel says.

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14 Responses to “E-commerce and News, Lessons from the UK's Telegraph”

  1. jjray

    02. Nov, 2009

    The American news industry, unfortunately, has it’s head in the sand. They failed to realize the value of their websites when the web was young. They moan the decrease in subscriber and ad revenue without an effort at innovation. Booyah to the Telegraph.

    Reply to this comment
  2. eCommerce Marketing

    15. Nov, 2009

    Great article – it’s true, America still has a lot to learn about eCommerce and the power of the Internet. Every year more and more money is spent – in the US – on eCommerce, and it will only continue to grow as the trends grow.

    No doubt, though, that the USA is a bit behind Europe. Thanks for the post!

    Reply to this comment

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