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Group Nine rolls out e-commerce ad product as it looks to diversify revenue model

Group Nine bought Popsugar last October for $300m

Group Nine Media is blending advertising with e-commerce as it looks to diversify its revenue model post-Popsugar acquisition.

Six months ago, Popsugar launched Sparkle, an e-commerce play that allows brands and retailers to build product pages directly on Popsugar's site. Now the publisher is introducing Sparkle Ads, translating the shoppable experience into an ad product.

“The natural extension for us was to be able to take that experience and put it into a display ad format,” said Group Nine chief operating officer Chris George, “so that brands can not only drive people to these pages, but they can actually bring that experience into the advertising itself.”

Sparkle Ads will first run on Popsugar and make their way to Group Nine’s other brands – The Dodo, Seeker, Thrillist and Now This – in the first quarter.

Food brand Campbell’s is one of the first brands to test Sparkle Ads. Popsugar has created Sparkle pages that connected to retailers including Amazon, Walmart, The Gap and Shopify​.

“All advertisers are looking for full-funnel partners,” said George, explaining that the audience data pulled from Sparkle products is a key selling point to retail advertisers.

“What we're focused on is really developing solutions all the way through to helping our partners drive purchase as well.”

According to the media exec, the goal is to diversify revenue “more rapidly” by sharing best practices among digital properties. For instance, George said, Group Nine outlets are strong in brand licensing while Popsugar is stronger in commerce.

Group Nine isn’t running an affiliate revenue model on Sparkle Ads. Instead it is charging a CPM similar to that of a traditional display ad.

George did say, however, that Group Nine will test running Sparkle Ads with editorial affiliates in the coming months to boost revenue from product recommendations.

“Popsugar Editor's Pick could be an ad format that we run across our site,” he said. “It's a new way for us to drive commerce and earn commission. It’s essentially a new revenue stream for us.”

George led the sales and product marketing strategy at Popsugar when Group Nine bought it for $300m last October. He sits in the central services team of Group Nine and manages a team of around 200 people across product engineering, insights, business operations and Brand Shop, the company’s creative studio.

“The brands continue to operate their experiences and content creation for their audiences. Where there's more change is to the central services area where things like our insights team can help take the best practice from one brand and help train another brand,” said George.

George said Group Nine is in growth mode, especially around product engineering. For example, the company plans to build Sparkle Ads that advertisers can embed on other publishers' websites. He said Group Nine would consider toting rich media CPM surcharges for such opportunities.

George is also helping to bring Popsugar’s editorial strategy to Group Nine’s original stable of brands looking to adopt an affiliate revenue model.

“We've learned a lot about how editorial teams need to be set up and operated to optimize for affiliate, which is a bit different than optimizing for things like reach or visits,” said George.

That shouldn’t affect ad load, George said, but the editorial style will likely change. This could include an increased focus on search engine optimization, for example.

“The user experience is largely the same in terms of how we're serving up our pages,” he said. “It's really just the angle of the content and what the editors are writing.”

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