Sugar Inc’s female content empire: example or outlier?

Websites for women are a paradox in the media industry. Despite being among the most successful properties on the Web, they are rarely mentioned in the never-ending discussions about how to make money from online content.
Sugar Inc is a case in point.
Since launching in 2006 as a network of women’s interest blogs, Sugar has grown into a media powerhouse through organic expansion and a steady diet of acquisitions. But even though Sugar has multiple revenue streams, a swelling readership and claims it is profitable, it receives little notice.
“From the media landscape, we don’t get much attention,” says Chief Revenue Officer, Kristine Shine. “It’s interesting because from a brand and advertising perspective, there’s tremendous interest in women-only content sites.”
The Sugar sites themselves are targeted at “trendsetting Y women” and arranged in verticals that focus on topics like food, fitness, beauty and kids. Its flagship brand is celebrity site Pop Sugar.
From a business perspective, the most remarkable feature about the sites is the degree to which brands and advertising are baked into the content. In practice, this means everything from product placements in videos to slide shows in which readers can click through to buy the items they see.
Sugar also works with brands like Target and the Gap (S GPS) to create “branded content” videos, often in partnership with third party bloggers, that run on the sites as sponsored stories. Here’s an example in which Sugar worked with blogger Jessie Adore to promote Levi’s Curve ID program.
Shine wouldn’t disclose specific numbers but did say that half of Sugar’s revenues came from a “display” and content bucket while the other came from a commerce bucket (which presumably includes commissions from third party product sales).
Sugar’s multiple revenue streams aren’t unusual, of course. Scratch the surface on most digital content brands and you’ll find a variety of side ventures that help buttress the editorial operation.
The question here is whether there is something particular about Sugar’s female audience that makes the sites so amenable to commerce and branded content — or whether any other media site could borrow from Sugar’s playbook.
David┬áReibstein, a marketing professor at Penn’s Wharton School of Business, says that research suggests that women who use social media have a greater inclination to share and to listen than do men. This could mean that audiences on women’s sites like Sugar, which have a heavy social component, are more willing to consider purchase┬árecommendations┬áthan general interest audiences.
But Reibstein says that tools to let consumers buy what they see are still evolving. This could mean, in turn, that Sugar is simply ahead of the curve among content sites in optimizing commerce potential.
Finally, there is the question of whether mixing media and commerce can work only for fluffy fare — or whether buy-through options will one day become a part of serious news media as well.