The Transcript

Native Commerce: Media That Makes Real Money

Voiceover: Rainmaker.FM is brought to you by The Showrunner Podcasting Course, your step-by-step guide to developing, launching and running a remarkable show. Registration for the course is open August 3rd through the 14th 2015. Go to ShowrunnerCourse.com to learn more.

Brian Clark: Hey, everyone. Welcome to another episode of New Rainmaker. I am your host, Brian Clark, founder and CEO of Copyblogger Media.

Today’s special co-host is kind of a character, Mr. Ryan Deiss, DigitalMarketer.com. Smart guy, he does a lot of very smart, lucrative things. Ryan, why don’t you tell us a little bit about this collection of businesses built on media websites that fuels the Deiss empire, if you will?

Ryan Deiss: I’m just excited that I’m a co-host. I didn’t realize. Are we going to interview somebody else, too?

Brian Clark: No, no.

Ryan Deiss: Do I have to be prepared and stuff?

Brian Clark: No. I’m going to make you do all the work. If I said, “Here’s our host, Ryan Deiss, who’s doing all the work, and I’m just kind of here,” that’s not going to go very well.

Ryan Deiss: I thought I was the very special guest or the talent.

Brian Clark: We can edit this to be very special guest.

Ryan Deiss: Yeah, but let’s edit it in somebody else’s voice that way it’s not going to seem as dumb.

Brian Clark: You’re the kind of guy who would want your name not in alphabetical order. It would have to be and Ryan Deiss?

Ryan Deiss: Yeah, absolutely.

Brian Clark: Yeah.

Ryan Deiss: Let’s make sure we get that in post, please.

Brian Clark: Got you. Got you. As far as you know, we’re going to take care of that.

Ryan Deiss: Exactly. By the time you find out about it, it will be too late.

No, really, I’ve been listening to this podcast since the very first one, so — and I say this through gritted teeth because I never like to compliment a friend, certainly not with them around — this is easily in the top three of my favorite podcasts, so thank you for having me.

Why Advertising Alone Won t Support Media

Ryan Deiss: No, to answer the question about, as you’ve referred to it, the Deiss empire, which is very gracious, I have a lot of people on the team and partners, stuff like that, that have as much and in many cases more of a role to play in the success of the empire. We’re really fortunate that we’re in a lot of different markets.

You and I have the same perspective to this, this whole media first attitude, right? Like, Let’s go out there and build media properties and gather the crowd and aggregate the attention and do that first. That’s the way that my business has always been, and now we’re in I really don’t know how many different markets. But there’s obviously Digital Marketer, which I think I’m best-known for. Some of the more lucrative things that we’re in, we own MakeupTutorials.com, SurvivalLife.com, DIYReady.com, and PioneerSettler.com.

So we re in all these different, really cool markets where we get to play and dabble in a lot of different areas and then share and report on all the stuff at Digital Marketer. It’s a lot of fun. It keeps it interesting.

I don’t know, are you like me? I think most entrepreneurs are like this. If you’re forced to do the same thing every day, you will break it just so you can fix it. Right?

Brian Clark: Yes, yes, which is why I’ve started distracting myself with new projects so that I don’t break the thing that actually pays the bills.

Ryan Deiss: Bingo. There. And that’s how the empire happens. There you go.

Brian Clark: Yeah, that’s cool. Yes, I remember when we finally met, or maybe it was the second time we saw each other in Austin. But it was after we started this podcast, and you were like, “I’m completely down with your media not marketing approach.” That’s where we really started geeking out about things.

Now, it doesn’t take a genius in this day and age to realize that traditional media models are broken. I’ve also heard you say that e-commerce models are in trouble. What do you mean by that?

How to Deal with the Threat of the Walmarts of the Internet

Ryan Deiss: I mean, everybody is screwed, right? With the e-commerce companies that are out there, they are getting commoditized left and right by — I don’t know if you’ve heard of this little company called Amazon. They are going out there, and now most people, when they want to buy something, they just go to Amazon. I mean, Amazon has really become the search engine, so if you’re out there trying to launch your e-commerce site and we used to do this.

My business partner, he had a number of sites, the little e-commerce sites that sold dry-erase boards and different things, because people used to go to Google if they wanted to find something to buy. Now, they realize, “If I want to buy something, I’ll just go straight to Amazon.” Right? Their members have Prime.

The small e-commerce sites really can’t compete, and now you’ve got Alibaba coming over to the top on Amazon. And they are going to further commoditize it, because now Alibaba is going to allow the consumer to go directly to the manufacturer. Another piece of that supply chain is getting removed, which is great if you’re a consumer. It’s not so great if you’re an e-commerce player, because how do you get found anymore these days?

E-commerce sites are getting commoditized by the Walmarts of the Internet just the same way that local mom-and-pop shops on Main Street got commoditized and eventually pushed out of business by Walmart. At the same time, you’ve got these four media companies that can’t make any money either.

Brian Clark: Yeah, here’s a guilty admission on my part. I don’t even think it’s about getting found with the Amazon thing in that I forget what it was. A guy put out a great article about a certain supplement and gave me the information that I needed, and he’s got the little shop attached to his site so you can order supplements from him. Of course, I then copied the exact bottle and everything into Amazon so I could one-click it. They’ve got my credit card information, and they’ve got my delivery information. It’s pure laziness more than anything, because I actually did find it through this poor guy. He was doing everything right. My number-one rule is never sell anything that Amazon sells.

Ryan Deiss: Yeah, I think that’s a big part of it. I mean there are ways to get around it. There are ways to win even if you’re selling something that Amazon is, but you’ve got to completely change the model. I know for us, we spent a couple of years trying to figure out, How can we beat Amazon? How can we win? How do we make this happen? How do you beat, Walmart? Right? The answer is you can’t.

Brian Clark: That’s what I thought the answer was.

Ryan Deiss: You can’t. Right, that’s exactly the truth. You can’t, but here’s the other reality: you can’t beat them at their own game. But the other thing is, you really don’t want to. You don’t really even want to compete with them at what they are doing. You don’t want to be Walmart. Let me ask you: have you ever shopped at a Walmart?

Brian Clark: I try not to, but sometimes …

Ryan Deiss: Sometimes you have to, right?

Brian Clark: Yeah.

Ryan Deiss: You try not to, but sometimes you have to. That’s the general response that I hear from people, like, “Yeah, I go there because they have the best price.” I don’t think the web needs more Walmarts, right?

Brian Clark: Yeah.

Ryan Deiss: Another question, have you ever been to a Bass Pro Shop? Do they have those in your area?

Brian Clark: Yeah, absolutely. It’s just a big outdoorsperson, outdoorsman. Is that gender neutral? No it’s not, but you know what I m saying. You go in there, and it’s just like sports and fishing and boats and guns …

Ryan Deiss: With man, so no. Outdoorspeople.

If you’re outside of the States or if you’re in an area where they don’t have one of these Bass Pro Shops or Outdoor Worlds, let me describe it to you. I mean, you walk in, and it is about the size of a Walmart, maybe even bigger. But it’s just outdoor stuff. They literally — some of them — have a pond in the middle. You’re going around, and you’re picking up a fishing rod, and you’re saying, “I wonder if this is a good fishing rod.” The dude says, “Why don’t you just go try it right now? We’ve got a stocked pond in the middle of our freaking store.”

You have people fishing in the store. I went to one to see What is this whole thing about? I don’t like camping. I like hotels, room service, and stuff like that. I went because I wanted to see. This is a retail model that is working. This is a retail model that’s actually working, that is winning. What are they doing so well? I’m walking around and there’s people that showed up at this place wearing camo. They are not going hunting there. They showed up wearing camo. They showed up with duck calls around their necks, right?

It’s not like they bought shoes at a shoe store, and they re wearing them out. No, no, no. They showed up with the duck call. So what Bass Pro Shop has done is they’ve created this environment. They’ve created this movement. They’ve aggregated this audience.

Then a buddy of mine, who really gets e-commerce — his name is Ezra Firestone — he said, “Yeah, in the future, if e-commerce stores want to succeed — I think this is really profound, and I think this is any online seller — you need to have your property, your site, a whole lot less like Walmart and a whole lot more like Disney World.

If you think about Disney World, you go there for the rides, and you go there for the experience and for the fun and for just the whole package — but you exit through the gift shop. That’s when it hit. That’s when this whole reality struck, and that’s when I said, “Okay, what you’ve got to do is you have to combine the two.” Media and commerce shouldn’t be these separate things.

Media should be used to create the environment, to aggregate the audience, to gather the crowd of like-minded people who are excited to be there. Then you have the opportunity to sell them your stuff. They want to do it because they love you and they love your brand.

I mean, that’s what you’ve done with this podcast. You start out with the Rainmaker podcast, and then you come out with the Rainmaker Platform. The media, the gathering of the content, that’s what came first, so that’s our whole model. Everything that we do, it’s Let’s go out there, and let’s gather the audience.

Brian Clark: You’re a man after my own heart, obviously, in that regard. But you’re using a little bit different terminology, and this is what really caught my eye. Native commerce — where did that come from?

The Story behind the Term Native Commerce

Ryan Deiss: Native commerce is the new hipster-approved phrase for this thing that you and I have been doing and just didn’t give it a cool name. That is the new thing. Don’t confuse native commerce with native advertising. Native advertising is advertising that’s designed to look like content, which really, that’s just the hipster-approved name for an advertorial.

Brian Clark: Exactly. This is the hipster name for content marketing?

Ryan Deiss: I think this is about more than content marketing, right?

Brian Clark: Yeah.

Ryan Deiss: This is bigger. This is about creating community, right? It really is about establishing, in your world, the theme park. It’s about building your own private little Disneyland, your own private little Bass Pro Shop. Another area — do you have a Harley-Davidson dealership in your area?

Brian Clark: Yeah. Another cult brand. All right.

Ryan Deiss: They just show up. Another one would be the Apple Store. People go to the Apple Store just to hang out. I look at all these different companies, and I say, These are media companies. What they are doing is they have built media, and now they are selling them stuff. Yeah, the big phrase that’s out there right now — and you’re going to start hearing it a lot more — is this concept of native commerce.

The selling that is going on is directly aligned to the media property, which historically, those two things were kept separate. You had your editorial team, and you had your advertising team, and they didn’t talk. You had the wall up between them. Now, what’s happening is they are merging. It has to be done right, and it has to be very, very transparent, but when it’s done right, it’s powerful. Where I first heard this phrase — have you ever heard of Ben Lerer of Thrillist?

Brian Clark: Yeah. Thrillist, I actually subscribed to that in Denver for a while until I got beaten down by the frequency, but it’s really a well-done media property for local if you’re in the right demographic, which I think they are going after the 18-to-34 male. Right?

Ryan Deiss: Again, I’m using the word hipster a lot because it’s very appropriate, but it’s basically Esquire magazine for hipsters. I mean, that’s the whole thing. For the young guys, Esquire magazine skews a little bit older. They are really going for the 18 to maybe 24, but when you get up to in your 30s, they are like, “Ew, you re old, gross.”

Thrillist, which is definitely a property worth checking out, in 2009 — all right, check this out — did $8 million in revenues from ad sales, from advertising almost exclusively, which is pretty impressive. Right? They had this giant staff, this giant editorial team, all these people producing all this content, and it wasn t working. In 2010, they acquired JackThreads.com. Are you familiar with JackThreads?

Brian Clark: I remember when they did this transaction and turned effectively into, again, what we used to call a content marketing company, but I’m digging this native commerce thing, even if it is a hipster term.

Ryan Deiss: Yeah, I think it’s an important distinction, right? I think a lot of people who are doing content marketing see it as a separate activity. This is something that we do. This is the marketing component. It’s not built-in and really inbred into the actual I think it’s actually a part of the product.

Brian Clark: Yeah.

Ryan Deiss: You wouldn’t say that Disney is doing content marketing. No, the experience is all an aspect of...