Explorer Series
10 MIN

What can media companies teach e-commerce?

January 10, 2022

In April 2021 I took on the daunting responsibility of launching The Polar Bears (TPB), a digital revenue consultancy for media companies and reviving The Derma Company (TDC), an anti-aging e-commerce marketplace. I set out to prove a theory that both types of businesses could learn a lot from each other in terms of growing, retaining and monetising digital audiences.

Brands are already acting more like media companies with social handles delivering more entertainment-based content in favour of performance-based ads. We've seen digital media companies like Jungle Creations and Buzzfeed successfully launch D2C products off the back of its media footprint. What can e-commerce companies and marketplaces learn from this battle for audience territory and attention?

In this article, I outline exactly how The Polar Bears applied a typical media business commercialisation model to e-commerce that saw annual turnover run-rate grow from £300k to £1.2m+ in just 9 months.

Packaging - First Impressions Count

In the ultra-competitive world of entertainment, media companies have often relied on new film / TV show releases to entice audiences and drive ad dollars. A media company's intellectual property (IP), including films, TV shows and podcasts, impacts its credibility and brand equity. Consumers will build a perception in advance of any new content releases based on the media company's track record and content quality. For e-commerce brands, it's no different. Consumers build perception based on historical product quality and customer service. Instead of new content releases, they offer new products and services.

Both media companies and e-commerce brands face similar challenges. Content and products can't be changed once distributed or manufactured, and production delays have been exacerbated by the pandemic. Advertisers often want the newest content or media first so trying to resell old content is difficult. Consumers want the latest products and technology so trying to ship the same stock can result in buyer apathy and impact repeat purchases. How do you attract audiences when you cannot introduce new products?

Packaging is a smart way of retaining and introducing new audiences without having to change the product itself. We've seen this implemented successfully for years in the retail industry. With supermarkets stocking more choices than ever before, people are often judging books by their cover. Brands like Gillette have opted for largely visual identity revisions to align with changing consumer expectations, and other household brands have started introducing refillable packaged products, recategorising to appeal to a more eco-conscious consumer base. In both instances, the product remains largely unchanged but how they are packaged has a huge impact on revenue opportunities.

In the first month, we applied both packaging methods by introducing a brand new product taxonomy (recategorisation) and introducing a new website (revision) to appeal to the audiences TDC wanted to reach. TDC wasn't able to release new products, so we categorised the ways in which users could land on a product page. Customers interested in vitamin A ingredients, moisturisers and vegan skincare could all now land on a final product page previously reserved for a brand-only search. The new website enabled TDC to highlight its values to customers at all stages of their journey and lift the brand to improve those first impressions.

Packaging enables you to determine which audiences to go after and ensure that when you do, the messaging lands. Don’t underestimate the power of a first impression. It not only drives a more efficient return on ad spend (ROAS) as you scale but can also be a powerful driver of earned media or, in e-commerce terms,  positive word-of-mouth.

With the product offering and visual identity now in place, it was time to look at positioning.

Positioning - Wear Many Hats

When it comes to taking a product to market, it's usually a combination of people and ads. The media world predominantly relies on sales teams to secure advertising opportunities from agencies and brands. Conversely, e-commerce companies' sales efforts are largely driven by computers with swaths of digital content used to fill multiple parts of a consumer funnel.

Both industries struggle with differentiating themselves in market and often fall back to price wars while targeting similar audiences and offering similar products or services. Every media agency has a long-line of polished sales reps and their corresponding decks waiting for “15 mins” of a buyer's time. Every e-commerce marketplace and brand is tasked with finding a way to challenge Amazon's dominance. The toughest battle each type of business faces is buyer apathy and friction to change.

Positioning has the ability to change buyers' perceptions when product and visual identity is not enough. Supermarkets have used this for years to differentiate themselves despite stocking the same products. They've often relied on shop experience, convenience and price to acquire specific audiences in the market. A key form of positioning is advertising as it enables companies to put their messages directly in front of consumers to drive consideration. They shift consumer perception by tailoring offerings to solve problems or appeal to target individuals' values.

The Derma Company was having an identity crisis where the brands they stocked had a greater consumer draw than the company itself. This is quite common with competing marketplaces that stock similar products and it often leads to a price war. We adopted two core positioning goals built around personalised skincare solutions and sustainability. The first goal was achieved by introducing a new category and shop page filter function to align ad messaging to more accurate product results. The second objective was highlighted using the company's sustainable efforts around reusing materials and introducing more sustainable delivery packaging.

In just 60 days The Derma Company saw almost a 500% growth in new customers, increasing from 130 in April-21 to 770 in June-21. During this period the company's ROAS scaled from 3x to 5x with average order values dropping by around 17%. We continued to monitor this impact up until August when we started to implement pricing strategies to improve margins.

Pricing - Never Run A Bath Without a plug

Media companies often rely on a “rate card”, knowing that agencies and advertisers will ask for initial discounts. The reality is these discounts never disappear and this is apparent in the 15% media agency discount that over time has just resulted in media owners increasing their prices to accommodate this superficial discount. Likewise, e-commerce businesses often use regular offers and product discounts to incentivise purchases. Whether you're an online retailer or a media owner, you're constantly pitching with incentives, deals and discounts to encourage transactions.

I've had many media sales managers come to me stating “no-one looks at the deck, everyone jumps to the ratecard” and “we need to reduce rates to be competitive”. E-commerce channel managers are no different; “my conversions are falling as we need to offer better discounts” and “no-one is reading our copy on the website and ads, they're just comparing prices”. To a certain extent these statements are not incorrect but my answer was clear; if your target customer is price driven and your offer doesn't match…find a new customer.

Media companies that drop their rates struggle to raise them in the same way that e-commerce companies offering continuous discounts will struggle to improve margins long-term, as consumer expectations are lowered to expect the lowest prices. Any media owner will have been in a trading conversation where they'd gone in hoping for a higher commitment and left with the same investment at lower rates.

Pricing is not rocket science. It's dictated by what any individual is willing to pay. It's fascinating to hear that some consumers are willing to pay £750 for fine wine and another for a fart in a jar… shocking I know, when Majestic Wines have such great offers. The point I'm making is pricing has to be given context around timing and audience to validate its value. Pricing has the ability to sell the same products at multiple price points to different audiences. Think of fashion brands like Burberry that appeal to those who are willing to pay a premium for the latest releases but also appeal to bargain shoppers looking for deals at outlet stores. In this instance, everyone wins as Burberry is able to improve their margins on products they would have otherwise had to pay storage fees for, and a new segment of customers is created without alienating the current audience.

The Derma Company was in a tricky position with two major concerns with regards to pricing. How do you incentivise new customers without showing you appear to favor new customers over loyal ones? The second consideration was how do you even offer incentives as a reseller where margins are already low?

We achieved this by creating two clear audiences: incentivising higher order values on current customers for discounts and acquiring new customers on a one-time discount. We saw that retention rates of customers who bought from TDC twice had a lifetime value (LTV) 6x higher than those who bought once. We modelled the acquisition costs knowing that 75% of new customers would return to make a second purchase. To encourage this repeat purchase, we built an automated email replenishment campaign offering a free gift with the next purchase.

In 120 days (Aug - Nov) revenue grew approximately 60%, acquiring almost 2,500 customers in the process. Pricing is powerful when used in the right context with all audiences considered. It was only made possible by the framework provided by packaging and the scalability of positioning the offering. When I do this with media companies, it's exactly the same approach: incentivise new buyers while retaining current buyers. Without this method you're at risk of running a bath without a plug.


E-commerce businesses will do well to look at how media companies invest in content to retain and grow their audiences. All too often e-commerce focuses on performance marketing without investing in the binding part of the funnel consideration. Media companies are investing heavily in social distribution to effectively up-sell viewers to their premium services. E-commerce companies should follow suit, as advertising can only do so much when operating in a very small window of attention.

The question will come down to brand identity with consumers: is Amazon a media company or e-commerce giant? The answer is probably a bit of both and I expect to see more companies follow suit with e-commerce moving into media and vice versa. Who do you think is primed to follow this model? Will e-commerce be a function of a media company or is entertainment an output of an e-commerce business? Please share your thoughts in the comments section below.

If you'd like to find out more about The Polar Bears approach to commercialisation, drop me a message or book a discovery call.