I really enjoyed SIPA‘s Online Marketing conference yesterday. We had sessions covering social media, developing online stores, best practice e-mail marketing, monetising online communities, mobile, video & podcasting. Thanks very much to the speakers from Electric Word, AI Digital, E-Consultancy, Nature, Magicalia, Incisive Media, Communicator, Euromoney & Babyworld.
While all the presentations were great the one session which got me thinking most was from Chris Blake, the Chairman of babyworld.co.uk. Chris highlighted some of the history of Babyworld from a launch in 1998 with £750K of seed capital to the sale one year later to Freeserve for £3.7m and the subsequent re-purchase in 2004 for £1. It was a great story.
The site is a direct rival of other parenting publications like Mother & Baby (published by Bauer). Mother & Baby has a circulation of just over 50,000 print copies & 166,000 unique users. By contrast Babyworld is generating nearly 560,000 uniques per month.
While Babyworld is operating like many other specialist media sites – publishing guides, news, reviews & forums for new parents – the really interesting thing that they are doing is operating as a full retail outlet. Not just acting as an affiliate but taking orders, stocking and despatching goods.
From their base in Oxfordshire Chris and his team run a warehouse and shop with stocks of buggies, car seats, clothing etc. They take advertising as well but from the figures shared it looked like they were generating over 70% of their revenue from the direct sale of goods.
Now this is interesting on a load of different levels. It harks back to a previous post I made about the commercial future for newspapers that were successful in driving a lot of traffic but were not able to monetise that traffic effectively. Maybe publishers need to start looking at their business from a very different perspective and, if we believe that the advertising model is broken, consider retail?