For many years Conde Nast has been one of the biggest names in home and lifestyle magazine publishing. Their domino title, launched in 2005, was the first magazine to “democratize decorating.” It featured designs people could relate to and afford instead of $50,000 couches and antique silver trays (although there were always a few of those too).
Despite its million plus circulation, Conde Nast suspended publication of the magazine when the economy dipped in 2008 and magazine subscriptions, advertising and fashion spending fell significantly. But the publication is back, and many would argue it’s better than ever.
Today, the quarterly print magazine (which relaunched in October 2013) is coupled with an interactive website that allows consumers to shop articles in-page or directly through a shop tab. domino is trying to build exactly what every magazine reader has dreamed about: a place where there are interesting articles and you can purchase anything you see that strikes your fancy.
Of all of the content/ commerce experiments currently in the market, domino’s chances of success are relatively high for several reasons:
1. They have a huge evergreen content library that they were able to use to quickly pre-populate the website with rich SEO-friendly content.
2. They had a large user base they could leverage as a starting point for their marketing efforts.
3. They have the deep pockets of both Conde Nast (now a minority owner) and private investors who are in on the venture.
4. Home decor is a good category for impulse purchasing.
Success with domino could mean a lot for magazine/shopping properties where the commerce and content is relatively “siloed” such as The Knot. The hope is that an integrated site will be far more valuable than either a magazine or an online shop alone.
It is clear from the P/E ratio for periodical publishing (11) as compared to ecommerce (230+) that investors see a lot more potential in commerce than in straight advertising plays. The 20x difference between the two industries shows that online commerce is significantly more scalable than selling advertising alone. Wayfair just passed $1 billion in revenue and shows no signs of slowing; and Amazon’s P/E ratio is up above 600. It is no wonder these investments are more attractive than companies in an industry where a 3% growth rate is viewed as a solid accomplishment. If domino shows success in the hybrid category, it could become much more valuable and serve as a template for other Conde Nast properties and publishing companies in general moving forward.
By all external factors, the experiment looks promising. Just a few months into their reboot, domino has over 165,000 Facebook fans and their Instagram posts routinely see 1,000+ likes. However, the online audience and the magazine readership are not the same. So these numbers are actually more encouraging than they seem at first blush, because — according to Jay Lester, CMO of Domino Media Group — the readership between the online and print audience only overlaps by 10%. His goal is to get more of their magazine readers online, but meanwhile, the site and the company are extending their brand to new, younger, tech-savvy readers, who are more likely to purchase online.
That said, the company is not out of the woods yet. While their user base gives them a leg up, they are facing many of the same challenges all content/commerce hybrid companies face. “When people come into the shop on domino, they behave like traditional shoppers,” Jay explained, “but converting readers to buyers has been more challenging.” It will be interesting to see how the year unfolds for this old-new startup.
Source: Forbes Business