Business model of POPSUGAR

Customer Segments

POPSUGAR has a niche market business model, with a specialized customer segment. The company targets its offerings at women aged 18 to 40.

Value Proposition

POPSUGAR offers two primary value propositions: accessibility and and brand/status.

The company creates accessibility by providing a wide variety of options. It operates three brands that cater to a wide range of customer needs and preferences, in mobile, video, and social formats:

• POPSUGAR – This lifestyle site provides multi-platform content across entertainment, fashion, beauty, fitness, food, and parenting. Specific content focuses on trends, tips, and updates, but it also includes a video series, live event coverage, shopping experiences, and celebrity/expert interviews.
• ShopStyle – A search portal that enables visitors to search, find, and buy the latest trends through a convenient shopping experience.
• POPSUGAR Must Have – A monthly subscription service that provides subscribers with curated boxes filled with the products reflecting the latest trends in beauty, fashion, home, and more.

Beyond its broad selection, POPSUGAR has an international presence, operating in Australia, Canada, France, Germany, Japan, China, the Middle East, and the United Kingdom.

The company has established a strong brand due to its success. It touts itself as the leading lifestyle brand for young women, reaching one in three female Millennials. It is also the #1 independent media and technology company for women in general. Its combined brands draw in 100 million visitors (three million daily for POPSUGAR) and 2.4 billion content views on a monthly basis. Its video production arm, POPSUGAR Studios, generates over 250 million monthly views of its original series. It has 27 million followers on its social media platforms, and ranks at #2 among Millennial female publishers in terms of social video views (Facebook and YouTube). Through its ShopStyle site, which attracts 18 million monthly shoppers from 175 countries, it drives $1 billion in annual sales to its retail partners. Lastly, it has won a number of honors, including two Native Advertisers People’s Choice Awards for Best Branded Video and Most Pioneering Publisher.

Channels

POPSUGAR’s main channel is its website. The company promotes its offering through its social media pages, online/mobile/TV advertising, and participation in conferences.

Customer Relationships

POPSUGAR’s customer relationship is primarily of a self-service, automated nature. Customers utilize the service through the main platform while having limited interaction with employees. The company’s website provides access to an e-mail newsletter that features updates and advice.

That said, there is a personal service component in the form of e-mail support and the POPSUGAR Must Have subscription service, which delivers curated items to customers.

Key Activities

POPSUGAR’s business model entails maintaining a robust online platform for its readers.

Key Partners

POPSUGAR maintains the following types of partnerships:

• Retail Partnerships – The company invites brands to become listed on ShopStyle, its eCommerce platform, so they can promote their offerings to its readers. The site’s commerce experts provide unique merchandising opportunities through a wide variety of formats. ShopStyle has 1,400 retail partners; specific ones range from luxury chains such as Nordstrom and Neiman Marcus, to big box stores such as Target, to boutique brands such as Farfetch, to marketplaces such as eBay. These brands can also elect to have their products included as part of curated boxes sent to readers as part of the POPSUGAR Must Have subscription service.
• Contributor Partnerships – The company operates POPSUGAR Voices, a program through which it invites third parties to produce content (namely articles) for its platform that focuses on women’s interests and passions and promotes their stories and diverse experiences.

Key Resources

POPSUGAR’s main resources are its human resources, who include the technology employees that maintain its websites; the bloggers, videographers, designers, and other creative personnel that provide content; and the customer service employees that provide support.

As a startup it has relied heavily on funding from outside parties, raising $46 million from three investors as of April 2011.

Cost Structure

POPSUGAR has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. Its biggest cost driver is likely content creation, a fixed cost. Other major drivers are in the areas of customer support/operations and administration, both fixed costs.

Revenue Streams

POPSUGAR has two revenue streams:

Advertising Revenues – The company generates revenues by charging third parties a fee to advertise their offerings on its platform.

Service Revenues – The company generates revenues by charging fees for the following services:

• POPSUGAR Bakery -- An in-house content studio that works with brands to produce native adertising solutions. It helps them develop integrated marketing campaigns spanning various channels from videos to events. Specific capabilities include Video Production, Original Photography, Digital and Mobile Experiences, Social Media Activation, Experiential Marketing, Premium Blogger Programs, and Talent Acquisition.
• POPSUGAR Studios – The company’s video production arm. It works with brands to produce content that promotes their offerings to its customers, using mobile-first and platform-first videos. Channels include television and social media platforms such as Facebook, YouTube, and Snapchat, and content includes everything from comedic shows to lifestyle advice.