April 25, 2023

BuzzFeed News Never Built the Brand Loyalty It Needed

With the announcement that BuzzFeed News has officially shut down, it seems that the social-first era for news is coming to a close.

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Here’s what’s inside:

Now let’s jump in…

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Last Thursday, BuzzFeed’s Jonah Peretti announced that BuzzFeed News would be shutting down and he would be letting go about 15% of the company. The Verge has the full memo here, but I’ll call out a few parts:

While layoffs are occurring across nearly every division, we’ve determined that the company can no longer continue to fund BuzzFeed News as a standalone organization. As a result, we will engage with the News Guild about our cost reduction plans and what this will mean for the affected union members. 

…

Moving forward, we will have a single news brand in HuffPost, which is profitable, with a loyal direct front page audience.

…

In particular, the integration process of BuzzFeed and Complex, and the unification of our two business organizations, should have been executed faster and better. The macro environment is tough, but we had the potential to generate much more revenue than we delivered over the past 12 months. 

Additionally, I made the decision to overinvest in BuzzFeed News because I love their work and mission so much. This made me slow to accept that the big platforms wouldn’t provide the distribution or financial support required to support premium, free journalism purpose-built for social media. 

There is a lot to unpack here. Readers of AMO know that I have been highly critical of BuzzFeed over the years and, rightfully so. It’s been inefficiently run for a long time and has struggled to show any semblance of growth.

I will say this: it’s the right decision. While BuzzFeed News might have won some journalism awards, it never figured out how to make money. And so, for BuzzFeed the entity to survive, this had to happen.

The issue was two fold: the unpredictable nature of the traffic it was receiving and the equally unpredictable nature of its advertising revenue.

BuzzFeed News never truly gained brand recognition. The simplest way I track this is to look at what percentage of a site’s traffic is labeled as direct according to SimilarWeb. For BuzzFeed News, this was under 15%. The vast majority of people coming to BuzzFeed News came from three sources:

  • 36% from referrals (people linking to it)
  • 31% from organic search
  • 17% from social

84% in total came from other people’s sites. What’s ironic is that, BuzzFeed News had seen its traffic increasing over the past three months with 19.6M visits in January, 21.7M in February, and 23.1M in March. I don’t have historical data, but I suspect this was incredibly variable.

Compare this to some of its competitors like The New York Times or Wall Street Journal. NYT gets nearly 59% of its traffic direct with search accounting for another 32%. WSJ gets 58% of its traffic direct with about a quarter coming from search. This is a much healthier traffic profile.

Maybe it’s not fair of me to compare BuzzFeed News to the large, legacy brands. Vox, which started three years after BuzzFeed News, gets 40% of its traffic direct. Axios, started six years ago, gets 40% as well. And Politico is 50%.

Ironically, HuffPost, which BuzzFeed also owns, has an even stronger traffic profile. 65% of its traffic comes direct with a little over 20% coming from search and about 8% coming from social. That makes sense, though. HuffPost is a well defined brand to its audience.

Why does this matter?

To build any semblance of consistency of traffic, you need people to come back to your site regularly. When your brand has become a strong enough habit that people will type in your URL, that’s a good sign. Even if you don’t have big, breaking news, people will still show up.

I think about this like picking up a newspaper on the commute to work. People didn’t grab the paper just because there was news; they grabbed it because they always did. Unfortunately for BuzzFeed News, it would only get traffic if there was something big going on. Otherwise, no one had it in their minds to see what BuzzFeed News was reporting that day.

And that matters. Because without that regular rush of people coming to your site of their own volition, you’re stuck gaming the platforms and hoping they’ll drive traffic to you. Those days are done. Facebook and Twitter are increasingly fighting to keep people on their platforms. They don’t want people to leave.

This brings me to the second point: the unpredictable nature of its advertising revenue. Advertising just doesn’t work for general interest news sites. Right or wrong, brands fear having their ads around controversial content. And even then, there’s nothing contextual about the ads.

To build on it, BuzzFeed’s entire advertising model is based on bulk traffic. On its advertising page, it says that it has “2.4B content views monthly” and “550M organic followers.” The global ad business has evolved from that. Most media companies now push their targeting capabilities front and center.

For example, in WSJ’s media kit, it has a secondary kit you can click into called “1P Data – Where Influence Meets Identity.” I won’t lie; it’s beautiful. Bloomberg Media’s homepage says, “Our proprietary intelligence and global research tools help our partners define business priorities, reach target audiences and motivate action.” And NYT calls out targeting as a core offering.

That’s not to say BuzzFeed has no data, of course. According to this Digiday article, BuzzFeed has been investing a lot in its product Lighthouse, its tool to make first-party data accessible to advertisers.

So, how does Lighthouse work? If someone clicks a few shopping articles on homewares, the data is grouped across a portfolio of sites and made anonymous for ad targeting. That segment then becomes available in Lighthouse. On Amazon Prime Day, for example, BuzzFeed’s shopping content resulted in new audience segmentations that are now available to advertisers, including “Amazon Prime Readers,” or the 6.3 million people reading anything about Amazon Prime on BuzzFeed’s sites. 

Lighthouse currently has over 1,000 audience segmentations, such as “spicy food lovers,” “sneakerheads” and “pet parents.”

General news likely doesn’t have the same, highly monetizable segments as the rest of the portfolio does.

This, by the way, is exactly why so many news organizations have leaned into subscriptions as their primary revenue stream. It removes the unpredictable nature of ad dollars. But more than that, it is an indication of the company’s health. Is it any wonder the NYT is probably the best journalism outlet in the world and the most successful at digital subscriptions? Is it any wonder that WSJ likely has the best business coverage and the most business digital subscriptions? When you build a strong brand, the business model can follow.

Jonah Peretti has always been resistant to putting up a paywall on BuzzFeed News. In 2017, Variety reported:

News publishers who move their products behind paywalls and only serve paying audiences don’t serve democracy, argued BuzzFeed founder and CEO Jonah Peretti at the Wall Street Journal’s WSJ.D Live conference in Laguna Beach, Calif., Wednesday. “If you are thinking about an electorate, the subscription model in media doesn’t support the broad public,” he said.

I agree with him, but also, this is business. I think the bigger problem is that a paywall wouldn’t change the fact that most readers don’t have affinity to the brand or the content. You need a brand and content people feel they need to pay for. Without that, no amount of gating content is going to help. Trying to charge for BuzzFeed News would not have suddenly changed course for the brand.

And so, how do you build an advertising-supported broad-interest news organization?

Be NBC, CBS, ABC, or CNN. What do all four have in common? They make a boat load of money from other sources and are part of conglomerates where the website is simply one piece of the pie. But even that has been a struggle for CNN, which has seen its team get trimmed due to to the Warner Brothers Discovery merger.

For everyone else that’s not a three letter media company? Avoid general interest news. It’s just not worth it. It’s expensive and advertisers hate it. If you are going to do it, start with a niche and then grow over time. At least that way, you are building a loyal audience—that direct traffic—that keeps coming back.

BuzzFeed News dying feels like the end of an era. Social-first distribution is dead. Any company pretending that it’s going to build a big business off tactics that worked five years ago is in for a rude awakening. It’s time to build brands, but that takes time. That’s why the biggest names twenty years ago are still the biggest names today.

Thanks for reading AMO. Before we close, I wanted to let you know about a new part of the site I am working on.

I will be covering the financial results of public media companies in earnest and aggregating that information in one place. This will be a feature for AMO Pro members, but I wanted to show you what I had in mind with the first three:

I will start tracking other companies, including BuzzFeed, Future, and Informa. If there are others you are interested in, please let me know.

On May 1st, I will close these down to paying members only, so if you’re interested in keeping track of the financial results of these public media companies, become an AMO Pro Member today. I hope you have a great week!