StackSocial has been in business for three years and it is already turning a healthy profit. And in today’s tech ecosystem turning a profit is down right odd. So what’s a startup to do, except change it’s name and go after a bigger target.
And to be clear, StackSocial isn’t so much pivoting to a new business, as it is doubling down on one of its old ones. “Since the beginning we have been doing this innovative thing with publishers and commerce; we’ve been calling it native commerce,” said CEO Josh Payne. Native commerce is a lot like other forms of native advertising, except the advertisements are e-commerce focused, and it is StackSocial’s specialty.
According to Payne the company makes two-thirds of its revenue from native commerce (the other one-third comes from a standalone e-commerce site). Over the last several years what they’ve realized is that the opportunity for native commerce may be huge. So StackSocial is changing it’s name to StackCommerce and is going after it.
There’s good reason to believe they’re right about native commerce. Its close cousin native advertising is currently exploding. Native advertising is the engine that is driving profits at Facebook and Twitter. It is Buzzfeed’s main revenue source. And it is the driving force behind much heralded programmatic platforms like Los Angeles-based Nativo. After years of declining banner advertisements publishers are moving quickly to take advantage of this new advertising medium. Native commerce may offer the same opportunity.
“We have the opportunity to really revolutionize the digital publishing industry by helping them monetize products,” said Payne.
StackCommerce’s approach to the native advertising realm is unique though. StackCommerce picks brands that it thinks its audience will be interested in; brands don’t pay for space then try to convince its audience to be interested. And to make the offerings more enticing, StackCommerce cuts discount deals for each item offered. The company has four full-time curators whose job it is to search the web for new and interesting products. “For us, a lot of what we’re doing is discovering up and coming brands. We’re about 80 percent to 20 percent, indie vs. big companies,” said Payne. StackCommerce’s audience tends to be early-adopters, designers, developers, geeks, entrepreneurs and people that like to be on the bleeding edge of tech.
“If you look at the challenges for those guys [publishers] to monetize, we’re doing something that is really helpful to the readers but allows publishers really to make money,” said Payne. “Publishers are really good at writing content, they're really good at selling banner ads but they’re not really good at sourcing offers. We help them make more money and we don’t cannibalize any resources.”
The company currently places native commerce ads on sites like Venture Beat, LifeHack, and The Next Web. As part of the company’s coming expansion it will be spreading to new publishers and offerings. “We’re actually testing a few offers and verticals in the network right now,” said Payne.
Depending on how those tests go the company will roll out expanded product offerings across new websites. Payne said at the front of their consideration is lifestyle type products. Down the line other categories for consideration include cooking, health and fitness, auto, and e-books.
The toughest part for StackCommerce may be scaling their business model. StackCommerce’s current appeal is its handpick selection. Handpicked can be difficult to scale. If it does find a way to efficiently scale its business without losing the uniqueness of its offerings, StackCommerce may have tapped into a whole new category of monetization.
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