More Publishers Place Big Bets on Product Reviews

From a Wall Street Journal story by Alexandra Bruell headlined “People and Better Homes Publisher Places Big Bet on Product Reviews”:

A few months ago, a couple of employees from Better Homes & Gardens’ parent company, Dotdash Meredith, were hanging out on beach towels, pressing their bare feet against the sand.

They weren’t quite at the beach.

Lying on a thin layer of sand inside a 72,000-square-foot facility in Des Moines, Iowa, they were evaluating different towels for comfort and water absorbency for a Better Homes & Gardens article listing the best beach towels for summer. Readers of the piece would be able to buy the towels that made the list by clicking on links to outside retailers, with the magazine getting a cut of every purchase—a practice known as affiliate commerce.

Ever since it acquired the 100-year-old magazine giant for $2.7 billion last December, Dotdash—a unit of Barry Diller’s IAC/InterActiveCorp.— been working to improve the publisher’s digital presence and bolster nonadvertising revenue streams.

“Right now, commerce is the hot, hot thing,” Dotdash Meredith CEO Neil Vogel said. “We think we can be the modern Consumer Reports.”

The company has launched new product-recommendation websites affiliated with existing Meredith titles, including People, Better Homes & Gardens and Real Simple, a spokeswoman said. The sites feature chosen products from editors and links for purchase, as well as taglines such as “Tested by People” and “BHG Recommends.”

Mr. Vogel said a category consisting largely of e-commerce has accounted for about a third of Dotdash’s digital revenue in recent years. “I don’t know if we’re going to get the Meredith brands to that number, but we’re going to get it up,” he said. That is because Meredith’s advertising business is much larger than Dotdash’s, he said.

Shortly after the acquisition was completed, the company began working to improve the digital presence of Meredith’s magazine business, making its websites load faster and reducing the amount of ads. The company also pulled the plug on the print editions of various magazines, including Entertainment Weekly and InStyle, while vowing to keep investing in its remaining print titles.

Meredith had dabbled with e-commerce before it was acquired by Dotdash, but its content was limited to roundups of products on sale and celebrity-driven shopper reviews such as “Jennifer Garner’s favorite shoes to walk around in” or “people like this crossover bag for traveling and it’s now on sale,” the spokeswoman said.

Many media companies have turned to e-commerce in an effort to generate new lines of revenue as online giants including Meta Platforms Inc. and Alphabet Inc.’s Google eat up ever-greater shares of digital advertising dollars.

BuzzFeed Inc., which has long generated affiliate revenue for the products it recommends to its audience, in recent years launched a stand-alone shopping site and its own kitchenware line. The New York Times bought Wirecutter, a product-recommendation site that now lives behind its paywall. And Wall Street Journal parent Dow Jones & Co. recently launched Buy Side from WSJ, a commerce site that is independent from the Journal’s newsroom.

The field of product-testing was pioneered by Good Housekeeping, a Hearst Corp. magazine whose research arm has been testing products for more than a century. Its website features many best-products lists that give readers the option to purchase the items through links to third-party retailers, from which it may earn a commission.

Product-recommendation sites have depended heavily on Google for visibility—ranking high in results for a specific “best product” search is crucial to traffic—and social-media companies like Facebook for promotion, publishing executives say. Every time Google changes its algorithm, publishers must change the way their websites appear and function so they continue to rank highly. BuzzFeed recently attributed a double-digit drop in commerce revenue in part to declining audiences on Facebook.

“We’ve seen a large number of low-quality or unoriginal product reviews on the web, and people have complained about it degrading their experience researching products,” a Google spokeswoman said. “That’s why we’ve updated Search ranking to help people find more in-depth, expert product reviews.”

Dotdash Meredith’s Mr. Vogel said he doesn’t mind leaning heavily on tech platforms that attract readers. Rather, he credits Google with helping to drive traffic and revenue growth for Dotdash websites, since readers proactively search for specific advice and products they need. The company turned beauty website Byrdie into an eight-figure commerce business, with a large portion of traffic generated through search, Mr. Vogel said.

Out of Dotdash Meredith’s 4,000 employees, about 250 are dedicated to testing and research—gathering information about a product, such as watching videos on manufacturers’ websites, according to Tory Brangham, the company’s chief commerce officer.

Mr. Vogel said Dotdash Meredith expects costs associated with its e-commerce efforts to exceed $20 million this year. Costs may include additional people and contractors who support product testing, such as by building and breaking down sets or providing expertise on a category.

For instance, he said that to compile a list of flat-iron recommendations, the company hired beauty experts who spent days trying different products on a variety of hair types. The company’s full-time testers also tinkered with products selected by the editors, including dropping the irons on a hard floor to assess their durability.

“You do all this crazy stuff and yeah, it’s expensive,” Mr. Vogel said. “The worst thing we can do is give our readers substandard recommendations that would result in them wasting time and money.”

Before acquiring Meredith, Dotdash had opened a large testing lab in Brooklyn. The newly combined company reconverted Meredith spaces in New York City, Birmingham, Ala., and Des Moines that were primarily used for efforts such as print photo shoots or recipe testing, rather than product testing. In Des Moines, the company recently installed six new washers and dryers for testing the durability of textile products.

In his latest letter to investors, IAC CEO Joey Levin evoked a recent visit he made with Mr. Diller, IAC’s chairman, to Dotdash Meredith’s testing facilities. “We walked through 50 kitchens creating recipes, sampling ingredients and testing appliances. We visited dozens of labs where reviewers were dropping scorching hot pans into ice water, running robot vacuums through syrup and past baby toys, and hanging and peeling removable wallpaper,” he wrote.

Dotdash Meredith is expected to generate more than 15% in digital-revenue growth by the end of the year, according to a recent note to shareholders.

Dotdash was spawned from IAC’s 2012 acquisition of About.com from the New York Times. IAC eventually blew up the About.com website in favor of building a collection of brands focused on specific categories using About.com content, starting with its first homegrown brand, health website Verywell.

Mr. Vogel said stand-alone websites focused on specific categories performed better than general sites like About.com, because people seeking advice are looking for brands that have expertise on a specific topic. The company acquired and created more brands in categories like finance and technology, beauty and food, ultimately creating the Dotdash umbrella brand.

“General-interest brands are not of interest to us,” Mr. Vogel said. “Nobody wants diabetes info from a place that teaches you to fix a router.”

Alexandra Bruell covers the fast-changing business of media, including news, magazine and digital media publishers.

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