BuzzFeed’s launch in 2006 heralded a brave new era of publisher monetisation. What happened to the content marketing utopia?
2006 was a far more innocent time for the world of online advertising.
The world of clickbait had not yet been discovered. Network and programmatic banner revenues were some eight years away from the crises prompted by ad fraud and viewability expectations.
As a fresh player in the market, BuzzFeed’s appeal was their complete rejection of the banner advertising format. Instead, they put their faith in a new and relatively untested format of volume-based monetisation: content marketing.
BuzzFeed’s slow rise to the top
To begin with, this change made few waves across the industry. BuzzFeed took nearly five years to hit the mainstream – a veritable eternity by modern standards.
Once there, bespoke native advertising placed them front and centre in the queue for more nuanced spend and they reaped the rewards. Ad agencies tripped over themselves to take advantage of the new format.
However, as is a recurring theme in ad tech, the pool of money soon had other publisher sharks gathering. BuzzFeed’s market share – while still vast – began to diminish.
Has the bubble burst?
A $4 million annual revenue figure in 2011 had skyrocketed to $64 million in 2013 and peaked at an eye-watering $167 million by the end of 2015.
Despite this remarkable growth, the 2015 figure was already down some 32% on projections. When the publisher was forced to readjust its projected figures barely halfway through 2016, nervous murmurings that the “Millennial media bubble” was about to burst spread like wildfire.
Indeed, even though traffic and content output continued to grow exponentially, revenue stalled. With 700 daily articles to support, a single revenue stream was patently no longer enough. The decision was made to look anew at the perilous world of banner advertising.
BuzzFeed’s move to banner advertising
A volume-based native model is a problem – most significantly here because creating pieces in line with BuzzFeed’s iconic house style is so time consuming.
Content marketers will be very aware of the perils of attempting to rush their craft – not only from a pure time perspective, but also as a direct impact on quality of returns.
Many publishers have begun to adopt the ‘BuzzFeed model’ of content aggregation and monetisation – from the Telegraph and the Independent right through to the BBC. How will they view this cry for help from the original exponent of the art?
In many ways, the change in attitude says little about the effectiveness of content marketing in isolation – only that quality output takes time and, when done properly, there are very few publishers not looking for a piece of that pie.
The outlook for BuzzFeed is far less certain. Banner advertising will provide a healthy boost to their bottom line through the rest of 2017, but it’s unclear how big this bump needs to be in order to plug the holes in their financial projections.
The challenges of monetising mobile, untangling header bidding, finding a sweet spot for both price floors and number of ad units per page – many of which other publishers have spent more than half a decade working on – all lie ahead. How quickly it adjusts to this new currency will define its long-term financial health.
