The Wire­cut­ter re­views gad­gets, and big­ger ri­vals smell a mon­ey­mak­ing model

A gad­get re­viewer’s suc­cess with com­mis­sions in­spires copy­cats “We move as much prod­uct as a place 10 times big­ger than us”

Bloomberg Businessweek (Europe) - - CONTENTS - −Gerry Smith

Brian Lam doesn’t run many ads on his gad­get re­view site, the Wire­cut­ter. He doesn’t have to, be­cause the re­views them­selves are loaded with links to Ama­ and other places where read­ers can buy the name-checked prod­ucts. If you click through and buy the item, Lam’s site gets a sin­gle- or low-dou­ble-digit per­cent­age of the pur­chase price. It adds up: Quant­cast says the five-year-old site and its house­wares spinoff, the Sweet­home, com­bined for 3.4 mil­lion U.S. vis­i­tors in March, and last year its staff of 59 drove $150 mil­lion in on­line sales and turned a profit, ac­cord­ing to Lam. “We move as much prod­uct as a place 10 times big­ger than us in terms of au­di­ence,” he says.

While Lam didn’t in­vent this kind of af­fil­i­ate mar­ket­ing, his site was the first to make it a main­stream me­dia suc­cess. Some of the in­dus­try’s big­gest names have be­gun fol­low­ing Lam’s lead in the past few months, in­clud­ing Buzz Feed

and Hearst. “Pub­lish­ers know that ad­ver­tis­ing is a dif­fi­cult busi­ness to be in if you’re not named Face­book and Google,” says Brian Wieser, an an­a­lyst at Piv­otal Re­search.

The Wire­cut­ter posts only a few dozen ar­ti­cles a month: “The Best Lap­top,” “The Best Open-Back Head­phones un­der $500,” “The Best Sub­com­pact Cross­over SUV.” Each, Lam says, re­quires 20 to 200 hours of test­ing and re­search, of­ten in­clud­ing in­ter­views with en­gi­neers or chemists. While re­view­ing bike locks, one con­trib­u­tor con­sulted a bi­cy­cle thief. While test­ing wa­ter­proof iPhone cases, another con­trib­u­tor swam a quar­ter-mile in the ocean. “Peo­ple trust us,” says Lam, a for­mer edi­tor at Gawker Me­dia’s tech­nol­ogy site Giz­modo and Condé Nast’s Wired mag­a­zine. “We earn that trust by hav­ing such deeply re­searched ar­ti­cles.”

Lam brushes off con­cerns about con­flict of in­ter­est, ar­gu­ing that the Wire­cut­ter has more in­cen­tive to make sure read­ers buy the best gad­gets than a web­site with con­ven­tional ads. If read­ers who’ve bought prod­ucts through Wire­cut­ter links end up re­turn­ing them, the site for­feits its com­mis­sion. “So the more we help read­ers, the bet­ter our busi­ness does,” Lam says.

In Fe­bru­ary, Buz­zFeed launched a Face­book page called “Buy Me That,” which pro­motes ar­ti­cles filled with links. (Sam­ple head­line: “Here are 9 Af­ford­able and Stylish Suits.”) The com­pany de­clined to com­ment.

Hearst, the pub­lisher of Esquire, Cos­mopoli­tan, and Good House­keep­ing, in Novem­ber in­tro­duced a web­site, BestProd­, that pub­lishes 10 to 20 re­views a day of elec­tron­ics, fit­ness, and par­ent­ing gear. “We wanted to cre­ate some­thing that’s en­gag­ing and peo­ple find use­ful,” says Troy Young, pres­i­dent of Hearst’s dig­i­tal me­dia di­vi­sion. “If there’s another way to mon­e­tize it be­yond tra­di­tional ad­ver­tis­ing, that’s an added bonus.” Young says tech re­views yield most of the link-driven rev­enue but wouldn’t dis­close sales.

Gawker and Vox Me­dia use Skim­links, an au­to­mated ser­vice that links words in ar­ti­cles to the sites of 20,000 re­tail­ers. In Fe­bru­ary, Vox posted a job list­ing for an edi­tor who can help read­ers “dis­cover great prod­ucts for pur­chase.” Gawker says its five-per­son af­fil­i­ate mar­ket­ing team drove more than $150 mil­lion in re­tail sales last year. “It turns out we have a grow­ing au­di­ence in­ter­ested in home goods,” says Ryan Brown, Gawker’s vice pres­i­dent for busi­ness devel­op­ment. “Peo­ple buy mat­tresses from us.” Piv­otal’s Wieser says af­fil­i­ate mar­ket­ing may pay the bills for smaller oper­a­tions but would likely have trou­ble re­plac­ing con­ven­tional dig­i­tal ads for most big pub­lish­ers.

The Wire­cut­ter is try­ing to ex­pand its au­di­ence, team­ing up with the New York Times to as­sess Wi-Fi routers and tricks for ex­tend­ing phone bat­tery life. Lam’s team is also widen­ing the range of its re­views, cov­er­ing dash­board cam­eras and wind­shield wipers. “You wouldn’t think it makes a dif­fer­ence,” says Lam, who re­al­ized his lat­est blades had gone a year with­out leav­ing streaks. “I didn’t know that wind­shield wipers could an­noy me so lit­tle.” The bot­tom line The Wire­cut­ter helped sell $150 mil­lion in goods last year through af­fil­i­ate links. Other me­dia com­pa­nies are try­ing to fol­low suit.

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