Or tying a vertical brand and an independent media company
My position on content and commerce is not very conventional. Though the fanfare has simmered since 2012’s early iterations, a symbiotic relationship between an eCommerce brand and an independent media organization would address two primary issues that hinder each category.
- eCommerce: Consistent flow of quality traffic is difficult & PR is expensive
- Media: ✗ Banner Ads ⇢ ✗ Native Ads ⇢ ✗ Branded Media ⇢ What next?
Everything old is new again
Ben Lerer’s insight to have Thrillist purchase Columbus, Ohio’s Jackthreads was the pioneering move. And though it has not worked out as originally envisioned, Jackthreads’ earnings did outperform expectations. In fact, it began to earn more than Thrillist’s media business, though the website’s distribution of other fashion labels meant slim margins. Reselling items is less profitable than selling ads. I’m sure that the team would have emphasized a native brand, sooner, if they could have.
Well — better late than never — Jackthreads recently launched an in-house fashion label to improve eCommerce margins. They’ve chosen to build a new brand, instituting another difficult, often underestimated path. Building retail loyalty is a grueling process.
I believe in building machines
One proposal for how to do so is specific to a selection of Digitally Native Vertical Brands (or DNVB). I believe that DNVB’s should consider acquiring independent media companies with 500k+ MAU’s. While some like Uncrate and even Gear Patrol are on solid footing, changes in the ad space will all but shutter others. Gear Patrol’s founder will tell you that he’s “experimenting with eCommerce.” Cool Material has a questionable model for front page eComm integration. And most recently, Cool Hunting and Product Hunt have launched innovative eCommerce efforts.
“eCommerce is easy!” — Independent Media CEO’s
“Ad sales is easy!” — eCommerce CEO’s
But forming a symbiotic relationship between a vertical brand and an independent media company could form a mutuality where eCommerce leads to reinvestment into journalism and vice versa. Gear journalism introduces primed-buyers to a brand; this is the entire value proposition for buying native ads on these platforms.
“Bottling Virality” is a practice seen in portfolios like that of Science, Inc., an LA fund who is building symbiotic relationships between three startup categories:
- Direct to Consumer Brands: companies that disrupt high-margin segments by leveraging customer acquisition tactics and technology platforms
- Consumer Marketplaces: Companies that disrupt fragmented markets or create new ones (pet boarding and senior care)
- Mobile Media Apps: companies that pioneer new approaches to entertainment and social media with the goal of building mass audience and monetization
Dollar Shave Club, MeUndies, and This is Ground are three of the vertical eCommerce brands who are seeing success within Science’s system which bills itself as a “high-powered incubator alternative.” But venture capital incubators aren’t for every founder. Investors have grown tired of eCommerce illiquidity and media startups are downsizing at every turn. So these days, eCommerce startups envy media’s attractive 15–22x multiple and media startups seek eCommerce’s alternative to ad inventories of decreasing value.
Perhaps, they can save one another.
In Part II: I will select five DNVB’s to pair with independent media companies
For more insight, subscribe to 2 PM Links, a curated collection of the best in brand, eCommerce, and data journalism — in your inbox every business day at 2 PM EST.