When BuzzFeed goes public, I’m buying stock.
That’s a curious thing for me to say, because as a friend recently pointed out to me, I’ve been subtly trash-talking BuzzFeed for a while. I should disclose up front that I am a personal fan of founder Jonah Peretti (he generously helped me out when I was a journalism school grad student) and that my company has done and may continue to do business with BuzzFeed. But one couldn’t be faulted in thinking that I haven’t been BuzzFeed’s biggest fan: In the past year, I have made hay about people’s trust of BuzzFeed lists, told a crowd of media elite that publishers need to “stop chasing BuzzFeed,” and publicly stated that “BuzzFeed may not be around in 10 years.”
These comments have been decontextualized and misconstrued to some degree—my colleagues and I often talk about how, as Contently Editor-in-Chief Joe Lazauskas puts it, “BuzzFeed is a really fucking smart media company.” However, I will admit that I didn’t always think that way; I once thought of it as a bunch of nice guys riding a fad. I’ve reversed my overall opinion of BuzzFeed over the past couple of years, and today I would call BuzzFeed one of the most innovative media companies in history.
In eight years—during part of which it was a side project of Peretti’s—BuzzFeed has grown to $100 million in annual revenue. For context, six-year-old Huffington Post was making around $30 million when it was acquired by AOL for $315 millionin 2011.
BuzzFeed is easy to bash; a fast-rising rocket ship is a visible target. And they do produce some pretty silly content. But when you discuss the future of journalism, BuzzFeed always seems to show up at that intersection between crazy and smart where genius so often lies. What’s actually crazy is seeing most everyone try to copy BuzzFeed’s voice and play catchup to its trendy listicle format at one point or another—from old media, including the Times, to new media like Digiday, to opportunistic startups like Playbuzz. When I say that publishers need to “stop chasing BuzzFeed,” what I mean is that they need to stop imitating BuzzFeed’s style and pay more attention to the brilliant way it runs its business.
What follows is an effusive—but important—list of nine ideas that BuzzFeed employs that the rest of us should rip off:
1. BuzzFeed has intelligently created a space where branded content can succeed at scale
“Brand publishing” has made content a sexy business again. Whereas in Contently’s early days, venture capitalists said, “Content is a terrible business,” they now throw money at any startup with the word “content marketing” in its pitch deck. In the past four years, we’ve seen nearly every media company roll out sponsored content as a new revenue stream, to varying (but increasing) success.
BuzzFeed has managed to grow a billion-dollar-value business on only sponsored content, and to do what makes sponsored content hard: scale it. Good stories—stories worth discussing and sharing—are novel and fluent and they connect with our identities. Humans are required to find and tell such stories. BuzzFeed has made it easy on the humans with its easy-to-produce (and digest) listicle format, content management system for quickly publishing to that format, and data technology for predicting what will resonate with audiences at a particular moment. Essentially, the company has done two things to accelerate creativity that I write about in my book: It designed a higher platform for publishing and practices radical simplification.
Branded content is a better business than banner advertising because stories build relationships and make people care a lot more reliably than asking and selling does—and as a result, media companies can charge a premium for it. As I’ve said before, I think those premiums will soften somewhat in the next few years, but great stories—and businesses’ desire to connect with audiences through them—will weather many fads to come—and continue to profit.
2. BuzzFeed gets the difference between Journalism and content, and uses the latter to fund the former
The front page of BuzzFeed looks like a 21st-century tabloid, and it is. Unlike other media companies that may huff and puff about the truth, their most profitable content (entertainment, fashion, gossip, lifestyle) is not journalism. BuzzFeed is open about its “reverse mullet” strategy: party in the front, business in the back. “Our lists are 100 percent entertainment content,” Peretti tells me, “with the goal of being fun.”
In my recent essay on the business models that will save journalism, I wrote that one of the fundamental problems with future-of-media debates is in not distinguishing Journalism with a capital “J” (war coverage, investigations of corruption, etc. from which revenues are hard to extract) from non-journalism content that can be interesting and important but falls in the “information and entertainment” bucket.
BuzzFeed has been investing heavily in real news journalism since 2011 when it hired Politico editor Ben Smith to head up BuzzFeed News. The company maintains a strict editorial wall between its advertiser content (sponsored, branded) and its news content, partially because its advertiser content is literally a different editorial category: entertainment.
Keeping brands out of the real news section is important, because if branded content is going to endure in the market, it needs to be clearly distinguished from news and adhere to journalism’s #1 principle: Don’t deceive the audience.
3. BuzzFeed uses smart psychology to get people to pay attention
BuzzFeed editors understand what gets people’s goose—and unlike other viral content purveyors who rely on teaser headlines to attract attention, BuzzFeed is incredibly straightforward about it. Instead of “You Won’t Believe What This Cat Did,” BuzzFeed will tell you what you’re going to get: “24 Cats Who Are Nailing Their Sweater Game.”If you click on that second headline, you’re likely going to look at all 24 pictures.
In other words, BuzzFeed attracts you with fun premises, then hooks you with dopamine-friendly shots of listicles, giving you lots of micro-rewards via ADD-friendly content that pulls you along to the next content. (In my book, I talk about this in the context of the psychology of small wins.)
Then, they hook you into the real Journalism, which satisfies you in a different way. As we wrote about here, brands can learn a lot from that approach, using fast/fun content to acquire readers on site, then leading them to meatier, more substantial stuff.
4. BuzzFeed is a truly data-driven company
Building a media company is hard for many reasons. One of them is that startup investment is hard to come by. But like almost every fast-growing new media company, BuzzFeed has both gained traction and attracted investors by building proprietary technology that has helped them become one of the smartest publishers on the planet.
“We don’t like media businesses and largely avoid them,” says investor Eric Paley, one of BuzzFeed’s early backers (and Contently’s first backer). “We were overcome by Jonah Peretti’s vision for the future of media. Technology was part of the story.”
I eat and sleep in the overlap of the venn diagram between media companies and tech companies, so I feel confident saying that when most companies talk about their “data-driven” processes and technologies, they’re talking about vaporware; they’re hoping that data will one day actually tell them the future. Right now it just tells them the past—if that.
BuzzFeed’s technology, on the other hand, is real. It’s built clever tools to quickly figure out what’s going to be cool on the web. That’s something a lot of startups have tried, claimed, and failed to actually do.
Last year, we interviewed BuzzFeed’s head of data science (aka secret weapon), Ky Harlin, about how the tech works. “BuzzFeed is known as a viral content company, and one of basic statistics people look at with viruses is reproduction rate,” he explained. “So for every one person who has some disease, how many more get it directly as a result? And there are obviously correlations for sharing. For content, we can tell within an hour or so of publishing what type of stuff we should put prominently on the homepage, promote on Twitter, things like that.”
When I told crowds at the Forbes Summit that BuzzFeed may not be around in 10 years, I added a caveat that the bloggers left out: “Unless it continues to adapt to trends and fads in culture.” The listicle and GIF may burn out like Beanie Babies, and if they do, BuzzFeed is screwed. Unless it evolves. Fortunately for BuzzFeed, it has a history of doing so like many a smart tech company—and it uses its data engine to figure out where to go.
The question, of course, will be whether BuzzFeed turn the ship at 1,500 employees (which sources say it expects to hit next year) as quickly as a 50-person media company aiming to be “the next BuzzFeed.” If BuzzFeed can continue to predict trends instead of simply chase them, it will be in good shape to answer, “yes.”
“This was the original specific goal of the company—be the first to see the cultural trends and share them,” Paley says. “That is a big part of the magic from the beginning.”
5. BuzzFeed has figured out how to get premium advertisers their money’s worth
Advertising is a commodity. Like undifferentiated corn, only there’s an unlimited amount of it on the Internet. Want to sell someone more corn than the next guy? Convince them that your corn gets them more free corn than regular corn.
That’s what this chart is about:
BuzzFeed’s pitch to advertisers is that it knows what kind of content people will share, and since the advertising on BuzzFeed is content, BuzzFeed can get you free corn on top of the corn you’d normally be buying. I’d argue that sponsored content is more like premium kale to banner ads’ corn, but the point remains the same: BuzzFeed is giving brands something extra on top of what they pay for; in this case, that’s all the free, organic (!) social traffic that flows in when people share sponsored content on BuzzFeed. That dynamic allows BuzzFeed to charge a premium for its ads, and give both parties a win.
It’s a great pitch—one that’s made stronger by its research on the effectiveness of sponsored content versus regular ol’ advertising. BuzzFeed campaigns measure the before and after opinions of readers who engage with advertiser content versus not, like so:
Basically, BuzzFeed reports show the advertiser that if a user reads the Taco Bell story, she’ll be more likely to buy Taco Bell tacos at some point. And BuzzFeed uses data to show Taco Bell exactly how much.
Remember the old John Wanamaker quote, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half”? BuzzFeed data shows brand advertisers that the wasted half is not the BuzzFeed half.
6. BuzzFeed has a distinct voice that both captures and shapes culture
Strip away the branding on a BuzzFeed list, ask someone to read the story, and I’d wager 9 times out of 10 a regular Internet surfer will know it’s BuzzFeed. In fact, if another publisher writes something that sounds like BuzzFeed’s voice, readers will think about BuzzFeed. That’s something every media brand (and corporate brand) hopes for.
The BuzzFeed voice is distinct and consistent, and it captures the diction and attitude of current pop culture in a way that publications of eras past used to and now don’t. The reason they don’t is because pop culture’s voice shifts rapidly. The reason BuzzFeed’s continues to work is because of the aforementioned data strategy: It has a more accurate digital finger on society’s pulse than any other company right now.
Hence the company’s recent (and from the looks of it, quite successful) foray into video, world domination with quizzes, and $50 million investment to expand to new markets and content types where the ones and zeros say BuzzFeed should be.
7. BuzzFeed invests in thought leadership—its own content marketing—to educate and shape the media market
One of the most impressive things to me about BuzzFeed is also the most meta: It’s a media company built on content marketing that cleverly does its own content marketing, which doesn’t feel like marketing at all. When Peretti sends a company email, that email ends up on the Internet (either leaked or posted). People care. That’s because he tells stories instead of pitching and selling.
BuzzFeed executives frequently post op-eds and speak on panels about the future of media and advertising; Peretti himself speaks at more conferences than any media company CEO I’ve met. The strategy is to educate the media and advertising market on how to be successful in media and advertising, knowing that this education and storytelling builds relationships that lead to business and relationships built on trust.
Perhaps that’s one of the reasons I like BuzzFeed so much—and give them benefit of the doubt on some of those sideboob listicles—because they’ve played a big thought leadership role in my own market. Their content marketing makes me think they actually care. And I think they actually do.
8. BuzzFeed invests in content that is good for the world
BuzzFeed is famous for its general stance on positivity: no negative book reviews, no negative lists. However, the company has also consistently invested heavily in journalism that’s actually positive for society.
“In the long run, good journalism is a more defensible asset,” comments Contently VP of Content Sam Slaughter. However, he says, “I also think that as an organization they really do care about quality reporting because they believe in the fourth estate as something more than a place to make cash—Journalism with a capital ‘J’ is ingrained in their philosophy way more than anyone gives them credit for. ”
In an age when real Journalism is hard to monetize, I believe that an important new form of corporate responsibility—tree-planting, if you will—will be subsidizing investigative journalism that’s important for the public to see. This is what Contently is doing with our nonprofit foundation, Contently.org, and it’s essentially what BuzzFeed has been doing with its news division: funding Journalism with revenues from entertainment. BuzzFeed News has been met with cynicism (e.g., that it’s just for PR), but criticism doesn’t change the fact that real Journalism is happening.
Ironically—or perhaps brilliantly—this public-interest journalism has boosted BuzzFeed’s reputation and surely helped it attract higher-end advertisers that it couldn’t have when it was known only for cat videos. Research shows that companies with values tend to outperform companies without them, which brings me to…
9. BuzzFeed is one of relatively few principled media companies in an era of desperation
No matter your opinion on the branded content church/state debate (“Should advertiser content be created by reporters who also create news content?”), BuzzFeed has planted a firm flag: There will be no illusion of impartiality, and no mixing of worlds. They’ve gotten flack for sticking to their positive story policy, and they’ve mucked through murky territory with fair use, plagiarism, and crediting of ideas and images—but in each case Peretti has come forward and done the right thing.
Today, as most media companies are being squeezed by market forces, we’ve seen plentiful instances of blurred lines.
Perhaps if BuzzFeed weren’t doing well financially it would be more tempted to fudge its principles, though knowing Peretti, I am disinclined to believe it would.
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BuzzFeed isn’t The New York Times. Everything on it isn’t for every reader and advertiser, and the company knows it. But it’s not the National Enquirer either. It may be the NYT of the millennial generation. There’s smart psychology behind getting people to maximally respond to those cat GIFs and investigative news reports alike, and even smarter business skills behind growing a $100 million revenue rose in the middle of a media desert.
So, yeah, I’ve snubbed BuzzFeed a time or two. But I’m bullish on it. For the rest of us, the technologists enabling storytelling, the brands hoping to become storytellers, and the publishers hoping to survive in said media desert—even if we can’t buy stock in BuzzFeed (it’s a private company still), we should at least take stock in what it’s up to.
(And that, my friends, probably belongs on a BuzzFeed list: “The 9 Worst Kickers of All Time.”)