Search Engine

For digital native PopSugar, an old-school advertising strategy

January 30, 2014: 11:16 AM ET

A young media business that makes all of its money online looks offline to grow its customer base.

140130103639-popsugar-miranda-kerr-ad-620xa

FORTUNE -- I recently stopped by the hip downtown San Francisco offices of PopSugar to meet chief executive Brian Sugar, a former high-tech exec who has refashioned himself as a digital media mogul. The female- and fashion-oriented publishing company that he launched with his wife Lisa is the very model of the modern, digital-native media concern, which I'd last written admiringly about four years ago.

PopSugar, which has 325 employees, has grown impressively since then. Still privately held, Brian Sugar doesn't disclose revenues, but others believe annual sales are around $100 million. Display advertising on its 12 content sites make up about 45% of revenues, and a roughly equal amount comes from its fashion search engine, ShopStyle. (A search for "red dress" on ShopStyle leads a consumer to established retailers like Bloomingdale's and Nordstrom as well as e-commerce sites like theOutnet.com and Farfetch.) A growing business in "must-have" subscription boxes -- lifestyle products like scarves, books, and perfume, curated by Lisa Sugar -- makes up the balance.

What jumped out at me most about PopSugar's business is the $25 million, three-month-long traditional advertising campaign the company is just wrapping up to promote ShopStyle. In short, a company that has mastered digital publishing and marketing concluded that old-fashioned media -- television, magazines, and even downright Neanderthal exterior ads on the sides of buses, taxis, and phone booths -- was the best place to boost awareness for its search-engine business.

MORE: Meet the Warby Parker of mattresses

The reason for going the traditional route was straightforward: Too much of ShopStyle's traffic was coming from other search engines, namely Google (GOOG). PopSugar needed to build up what the advertising industry calls "unaided brand awareness." In English, that means convincing consumers to go to your site just because, rather than because you spent money on Google keywords to lure them there. "Our object was simple," Sugar says. "When someone was going shopping, and they knew what they wanted to buy, we wanted them to know ShopStyle was there and waiting."

He draws a direct line between PopSugar's analysis and the experience of the travel search site Kayak. Michael Moritz of Sequoia Capital invested in both companies and encouraged Sugar to consult with Kayak's executives. "They said, if you look at it in the short term it's not going to succeed," Sugar says. "You have to do it over a long period of time to get people to change their behavior."

PopSugar's initial approach to a long time was three months. It hired the ad agency Sub Rosa to create a campaign that centers cleverly on the supermodel Miranda Kerr pulling fashion products like purses and clothes out of her computer screen. "She has the girl-next-door, high-style, and sexiness qualities that complemented what ShopStyle represents," Sugar says, "Everyone said, 'I wish real life were like that,'" referring to being able to pull gorgeous accessories from your monitor. "We wanted our brand to come to life and be aspirational."

The ad agency MediaStorm handled media buying, conducting what Sugar calls a "full-on shock-and-awe" campaign that targeted ShopStyle's demographic of young women. It bought ads in People, Entertainment Weekly, and InStyle (all magazines owned by Fortune's parent company Time Inc.) as well as Glamour. Billboards ran on buses in San Francisco, phone booths in New York, and taxis in Los Angeles. TV spots appeared during must-watch live and other appointment-viewing events like the Golden Globe awards and the finale of Survivor.

MORE: Victoria's Secret model wears 3-D printed wings

So did it work? Sugar says the final results aren't yet in, but that direct traffic to ShopStyle's home page doubled during the campaign. He says the company already is evaluating its spending plans for the latter half of 2014 and is likely to repeat the experience.

Beyond the realization of the continued value of "old" media for a new business like PopSugar, there's another epiphany to be learned from its current focus. The PopSugar network is a good business and a leader in online "service journalism," the category of articles that offers guidance on how to live one's life. ("V-Day Looks to Wow the Guy Who's Seen Everything You Own.") In that sense, PopSugar has much in common with women's interest magazines -- minus the glossy paper and hundreds of millions of dollars in revenues.

Yet the business Sugar is truly excited about -- so excited that he's willing to plunk down $25 million for one fiscal quarter's worth of tougher-to-measure traditional advertising -- is his search engine. "The amount of money we make for every thousand pages served on ShopStyle is so much higher than our display advertising-supported web pages," he says. And thus a fascinating conundrum: Women deeply desire to read articles about how to dress and live well, and do so in great numbers. But retailers are far more willing to advertise on a website that exists solely to drive traffic to their stores, even if its audience is a fraction of the one enjoyed by an editorial site.

It's still a brave new world in digital media.

  • Yandex searches past its language barrier

    Moscow-based Yandex dominates search in Russian. But can the world's fourth-largest search engine break out of the Cyrillic world?

    By Clay Dillow

    FORTUNE -- The "Google of Russia" would prefer you not refer to it as the "Google of Russia," but the analogy has stuck and for good reason. Like Google, Russia's Yandex dominates the search market in its home country, dwarfing the market share of its competitors. It makes money MORE

    Nov 13, 2013 5:00 AM ET
  • J.C. Penney gets busted juicing its Google results

    ...and now has to deal with the repercussions from Google.

    The NYTimes did an expose over the weekend on a name brand company who apparently outsourced their Search Engine Optimization (SEO) to a shady SEO firm.

    J.C. Penney was established in 1916, long before search engines were even imaginable. They find themselves in a precarious place, having been caught trying to juice their search results by Google.

    Most companies who do this sort of thing MORE

    - Feb 14, 2011 11:38 AM ET
  • Google's new search feature

    By Yi-Wyn Yen

    This week Google began rolling out its latest search feature, Google Suggest on its homepage. The new tool, which offers suggestions when you begin typing into the blank search box, was launched to help people who have difficulty defining their queries or are bad spellers.

    Google Suggest is supposed to make searching more convenient. Say you're looking for videos of Michael Phelps's 100 meter butterfly race. The more keywords MORE

    - Aug 28, 2008 11:39 AM ET
  • Google in the eye of a slowdown

    By Scott Moritz

    Google (GOOG) is sitting squarely in a troubling three-month slowing trend, and only some deft moves can spare the search giant from an apparent first-quarter shortfall.

    ComScore numbers once again confirmed that people are searching less and clicking on advertisements at a much slower rate as the economy tanks and consumer spending pulls back. In March, Google's paid clicks grew 2.7% over year-ago levels putting first-quarter paid click growth MORE

    - Apr 16, 2008 10:21 AM ET
Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by WordPress.com VIP.