The Wirecutter made a name for itself by serving up great deals to tech obsessives hungry for the latest gadgets. But the best deal it ever offered might've been its sale to The New York Times in October for $30 million.
Tucked away in The New York Times first-quarter earnings results earlier this month was a sentence that indicates the purchase is beginning to pay off. Explaining a $5 million year-over-year increase in uncategorized revenue, The New York Times attributed it mostly to "affiliate referral revenue associated with the product review and recommendation websites, The Wirecutter and The Sweethome."
The earnings report didn't say exactly how much money The Wirecutter and its home shopping sister site, The Sweethome, were bringing in. But, like other companies including Vox Media, Gizmodo Media Group and Business Insider, it's clear that The New York Times is beginning to benefit from affiliate linking, the practice of recommending products to readers and reaping a commission if they decide to make a purchase.
For The New York Times, The Wirecutter and The Sweethome fit into a broader strategy of growing the company's "reader-service" journalism — products that help readers figure out what to cook, how to exercise, where to live, what products are worth the cost, which shows are worthy of their time.
Leading The Wirecutter is David Perpich, a senior executive who helped establish the company's metered paywall and oversaw new product development at the company. Although Perpich declined to provide details of The Wirecutter's performance so far, he said The New York Times is "very happy with how Wirecutter is performing" and said the company has embarked upon a strategy of expanding The Wirecutter's affiliate linking model to other product categories.
"Up until this point, we've been mostly focused on electronics and home goods," Perpich said. "But we want to be the place where everybody goes to easily pick the things that they need. ...Everything from thinking about how do we help parents figure out what to buy for kids and babies, looking to pets, financial advice, you name it."
A quick glance at job vacancies for The Wirecutter bear this out. The company lists at least 19 new positions that correspond to product categories the two sister sites are known for (cameras, general tech, kitchen gear) and positions that would be a departure from its usual remit (a writer to review products for babies, for example, and a finance editor). Perpich says the Wirecutter's current editorial staff of about 45 is set to grow to cover "more of the categories that matter to our readers."
They'll undoubtedly have competition for some of these product categories. Lucie’s List, a San Francisco-based affiliate revenue company, recommends baby gear and has at least 360,000 subscribers to its weekly newsletter. The Penny Hoarder, a St. Petersburg-based media company, has made millions by providing readers with financial advice and pointing them to the best deals.
Staff members help guide The Wirecutter's decisions about which products they should expand to, Perpich said, as do shifts in the market and a survey of the competitive landscape.
"We're really looking for a lot of different things, both qualitative and quantitative, and filtering that in to form a judgment and perspective on where to focus," Perpich said.
Affiliate linking might seem foreign to The New York Times, which has for decades proudly touted its barriers between news, opinion and business. It's occasionally given readers pause, too, as evinced by this reaction an edition of its Running newsletter written by Well editor Tara Parker-Pope:
— Nikki Usher Layser (@nikkiusher) April 9, 2017
But Perpich says that The Wirecutter and The Times both share the same DNA. When founder Brian Lam was telling him about the inspiration for the company's editorial process, he remarked that it was based on applying The Times investigative approach to product reviews and combining it with a laser focus on the user (Lam and Perpich talk weekly, and he's still "an active part" of the company, Perpich said).
But complaints will inevitably arise, and when they do, it's important to remember that "the foundation of anything we do has to be reader trust," Perpich said.
"Obviously, context matters a lot," Perpich said. "Going and doing it randomly in the middle of a news article would be weird. But in a piece of journalism where we're helping people to actually go take action in the real world off of The Times website, then that integration can make a lot of sense."
Correction: A previous version of this story put The Wirecutter's staff at 45. In fact, its editorial staff encompasses 45 employees. Its entire staff is larger.