Wednesday, February 16, 2011

The Thrillist and JackThreads step-brotherhood as a better revenue model for publications.

By Nathan 2/16/11

Considering that newspapers and other ad-supported publications are more often folding into bankruptcy these days than across readers’ laps, it's clear that it is nyTimes for a change of approach. And in looking for that change, Thrillist’s purchase and promotion of the flash-sale clothing merchant JackThreads could be one of the necessary coins.

Talking to Thrillist, they described their relationship with JackThreads as one of those “brothers from another mother” situations. So I’m calling the strategy that Thrillist has drunk up the Step-Brother revenue model: where instead of driving traffic to advertisers and earning on the clicks, publications can move readers to their subsidiaries, their step-bros, and earn on what the clicks turn into down the line.

The model is borne out of the tragic irony that while it is profitable for companies (@nike) to place advertisements within publications (@nytimes, @thrillist, @onandtrue), it is mad hard for the publications themselves to make a profit off of the advertisements: Nike makes money by advertising in the New York Times, but Nike’s advertisement coupled with all of the other ads isn’t enough to keep the NYTimes swimmin’ in the black.

To me, it’s like one of those Greek torture myths – like Sisyphus, or that other poor soul who was mad thirsty but saw the pond fall away every time he went in for a sip. The NYTimes – along with other publications, like Thrillist – can make money for other people, but not for themselves. Imagine that there was a wild party happening in your house, but you were for some reason trapped upstairs, locked in your room with your cats. That’s what it probably feels like.

But Thrillist doesn’t like cats (well, besides LOLcatz). So they figured out a way into the party, a way to share in the ROI that their advertisers had been lovin so sweetly all this time: they bought JackThreads and made it their step-brother.

See, Thrillist features a daily list of “must-have recommendations”. And between the features are ads for Bud Light, HD TVs, etc. But for a while now, Thrillist has been “featuring” JackThreads in each issue as some half-ad, half-feature centaur.

It’s similar to Fox running ads for their own sitcoms and dramas during the Fox broadcasted Superbowl: instead of earning on the sale of that ad slot to Doritos, Fox is earning on the future value of driving viewers to their own sitcoms and dramas. And in the same way Thrillist is foregoing the per click ad money from Bud Light in order to feature JackThreads - trading in the $.90 per click on the Bud.L ad for the greater value that that click turns into when people buy sweet swagger from JackThreads.

John Wiseman, Thrillist’s VP of Marketing and Partnerships referred to it as the “fusing together of editorial and e-commerce,” and told me that for JackThreads and Thrillist the marriage is only going to get more fluid. And in my opinion, this type of knitting is the way out. Ad-supported editorial is struggling just to stand, but publications are fertile gardens for e-commerce companies to advertise *within*. So what’s your glitch, Gene? Come to that obvious conclusion (e.g. Leia! Leia is my sister!), and see if that old e-commerce dress fits.

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