Content to Commerce Only Works One Way

What do Food52, Hodinkee, and MeatEater all have in common? They all sell things to an audience that they built using content. Barstool Sports spent a long time building a gambling obsessed audience before it moved into online gambling. FreightWaves and Blockworks had success with their media businesses long before its SaaS product took off.

For all of these brands, content came first. For years, the focus was on building an audience. And only after reaching a certain scale did they start to see growth in their commerce products—whether that’s selling dish towels, watches, gambling accounts, or SaaS subscriptions.

This order of operations—content first and then commerce—is, in my opinion, the only way this works. Being a commerce brand and then thinking you can expand into content is highly unlikely to work. And it boils down to one, simple reason: DNA.

***

But first…

We’re almost halfway to being sold out of tickets to the AMO Summit on October 26th here in New York City.

The core theme of this event is the power of niches and everyone you’ll meet agrees with that. There will be operators from consumer and B2B media. Others from big houses of brands and growing branded houses.

Here’s what you can expect:

• 120+ media operators from various consumer and b2b niches
• Full day of panels moderated by me
• Ample opportunity to network with the AMO community

If you want to come, don’t wait to get your tickets. Click here to register today.

Now let’s get back to it…

***

Think about the last 10 years. There was a proliferation of DTC and ecommerce companies that sprouted up. But in many respects, the growth team was the most important part of the company. Those that perfected ad buying would thrive.

It became an almost instant feedback loop, which is great. And so, many companies would raise money, use that money for ads, see immediate revenue growth, and then go out and raise more money. It worked until it didn’t. When Facebook ads started to get more expensive, it became increasingly difficult for these DTC companies to profitably grow.

Why do I mention this?

Because at these companies, the DNA was all about the Facebook -> Product flywheel. So long as you could create great Facebook ads, you could then sell products, and use that cash to reinvest into more Facebook ads. Like I said above, it was the instant feedback loop.

And that is completely different from what works in a content business. There is no immediate feedback loop. Oftentimes, there’s no feedback loop at all. The impact of one piece of content on the business compared to another is not easily tracked.

Content businesses are not nearly as quantifiable as we’d like to believe. You can create a piece of content, but how do you know it resonated? The reality is, there’s a major element of gut feeling that goes into creating content. Admittedly, this makes numbers-driven people go crazy because you can’t quantify gut.

I remember early in my media career, an operator said to me, “editorial teams are the most annoying people on the planet, but damn it, they are brilliant.” And it’s true. Creating great content that will build and engage an audience is a skill that takes time to build. And as a creator, you learn what will resonate with your audience over that period of time.

And that’s the secret, right? When you’re building a content business, you aren’t just trying to get a user in, sell them something, and then escort them out of the door. You’re trying to keep them coming back again and again. You’re trying to build a deeper relationship. That’s part of the reason so many of these general interest scale media companies have struggled; they didn’t care about that deeper relationship.

So we come back to this concept of content to commerce. How the two sides operate is fundamentally different. Content businesses have patience; ad-driven DTC businesses get instant gratification. Content is definitely not instant gratification.

And so, the only way for content to commerce to work is the content is in charge. Food52 was led by Amanda Hesser who created content. FreightWaves is led by Craig Fuller who creates content. Dave Portnoy remains the biggest personality for Barstool even twenty years after founding it.

Imagine going to one of these DTC companies and saying, “you’re going to invest in content, but it’s going to take years to build a die hard, ultra loyal audience. And it’s going to cost you hundreds of thousands of dollars at minimum every year.” They’re going to look at that money and then look at Facebook ads and just decide to do that because it will directly translate into sales.

What it all comes down to is DNA. Commerce companies are fast growing that rely on ads for growth. They have perfected that flywheel. Content companies grow slower and rely on content creation for growth. You can teach a content company to invest in ads and grow faster once you’ve perfected the audience with content; it’s almost impossible to teach a commerce company to slow down and perfect content.

There are, of course, exceptions to this rule. Mailchimp didn’t start as a content company. But in 2020, it bought Courier, a publication focused on entrepreneurs. If you read the content, it’s not all about using ESPs. But what Courier does is build an audience that is psychographically more likely to need an ESP at some point. And when that time comes, Mailchimp will be there.

But it’s a long game. Mailchimp isn’t going to make its money back as quickly as it would have had it just used ads. However, over the long term, it’ll do far better than if it just used ads.

When I mentioned this article to a colleague of mine, she asked about HubSpot. She said, “isn’t that an example of a commerce brand that then went content?” In reality, HubSpot was always a content brand. It has been publishing on its blog for at least 15 years. The team said, from the beginning, we’re going to invest in content for the long-term.

That’s why the acquisition of The Hustle was so seamless. It was a content business buying another content business. Yes, the primary product is marketing software. And yes, HubSpot runs a ton of ads. But it also recognizes that it needs to invest in content and it empowers those teams to do it. Sam Parr’s My First Million Podcast almost never talks about marketing automation or inbound marketing or any of HubSpot’s mantras. And yet, the podcast crushes it for HubSpot because the content brings in the right audience.

I firmly believe the best commerce brands will come from content brands. And ultimately, the reason boils down to DNA. Good media companies care about a long-term relationship with their audience. And once they’ve got that, they can figure out what products to create and sell.

Thanks for reading today’s AMO. If you have thoughts, hit reply or join the Slack. I hope to see many of you here in NYC on October 26th for the AMO Summit. Have a great weekend!