PopSugar’s chasing celebrities and sales — and driving more than a billion dollars in revenues for fashion brands through its ShopStyle site.
The San Francisco-based company is something of a digital hybrid, chasing clicks with its PopSugar site and funneling shoppers to other e-commerce sites at ShopStyle while working with brands on both ends.
This story first appeared in the March 24, 2015 issue of WWD. Subscribe Today.
Acquired in 2007, ShopStyle is both a fashion search engine and social shopping Web site with a performance marketing affiliate model. It drove $1.2 billion in sales for retail partners last year and more than one billion clicks to these sites. The site has 10 million products from more than 1,000 retailers.
While not directly linked with the company’s celebrity-obsessed Web site, they benefit from one another.
“These are two brands and two properties serving one audience,” Jen Wong, chief business officer, told WWD.
While ShopStyle is a very different business from its parent company, the two definitely have synergies. For instance, Levi’s product listed on ShopStyle drives to levis.com, but the brand also has partnered with PopSugar in various ways, from traditional advertising to a video series featuring the site’s editors in Levi’s jeans and a program that had influencers interacting with the brand.
PopSugar was founded almost nine years ago by Lisa Sugar and has turned into a celebrity hub, an anti-TMZ with sections devoted to fashion, fitness and beauty. Sugar described the site’s content as “fun, friendly and relatable.” A recent post asked readers, “Are You Ansel Elgort’s Soul Mate?” and supplied a test to find out.
Even if the site’s “don’t hate on my happy” motto might prompt an eye roll or two from its snarkier competitors, PopSugar is pulling in plenty of page views. The site commands 600 million monthly page views and 3.3 million daily visits. Traffic increased 55 percent last year. Sixty percent of the site’s traffic comes from the combination of a mobile Web site and the PopSugar app.
Popsugar.com has 65 editors who post from four to 10 stories a day. All told, the group publishes 200 to 300 pieces of original content daily, which includes about 10 videos spanning food, fashion, entertainment, fitness and beauty. The brand formerly operated each different vertical as its own site — Fabsugar.com for fashion or Fitsugar.com for fitness — but consolidated the dozen sites over the past 18 months to build a unified brand that exists under the Popsugar.com domain.
Sources estimate the combined businesses drove revenues of about $120 million last year. Executives from the company declined to break out sales numbers for PopSugar and ShopStyle, but contend that the businesses are pretty evenly split. Half of revenue comes from a combination of advertising, sponsored posts and partnerships on PopSugar, which worked with 500 brands last year — Hilton, Fruit Water, Levi’s and Unilever among them — and the rest comes from a cut of all sales fueled by ShopStyle.
The company expects revenue from partnerships to increase in the mid-double digits this year. Last year, a consumer activation with Unilever’s Simple Skincare brand during the second quarter brought in more than $1 million, and Fruit Water sponsored a scripted, 10-part series that aired in October.
The team credits this growth to an evolution from banner to native advertising, which has seen 150 percent growth year over year.
When PopSugar began to shift towards the sponsored post route, the brands were producing the content. This has changed and PopSugar’s editorial team is now responsible for the creation of all native advertising content. Video is also a significant growth engine for revenue — and all video is produced in-house. Of the 10 videos posted per day, close to half are sponsored.
“Video and native are growing a lot faster than display,” said Anna Fieler, PopSugar’s executive vice president of marketing. “[Video and native is] one third of our business and growing to half. We don’t know if it will happen within the year, but it’s a goal of ours.”
Another source of revenue for PopSugar, albeit smaller than the company’s two main money drivers, are its monthly Must Have Boxes. Each box is $40 per month — considerably more expensive than other subscription box services — but tens of thousands of subscribers have signed up. Rather than focusing one vertical, PopSugar’s boxes contain product that spans food, fashion, beauty, fitness and home. Next month, a special-edition Must Have Box will launch, created in partnership with the Council of Fashion Designers of America. Several special-edition boxes are released per year, in addition to the monthly subscription ones, that retail for more than the standard $40 (a box created with Neiman Marcus last year retailed for $250 and sold out on Popsugar.com). Developed by Sugar and CFDA members, 50 percent of the proceeds from the $195 boxes will go to benefit the CFDA.