How Buzzfeed Is Transforming The Media Industry
From my office on 34th Street near Herald Square in Manhattan, I can look uptown and see the world of media as it is today. GroupM, a few blocks away on 7th Avenue, is the world’s largest buyer of media from the world’s largest sellers. Another agency behemoth, Mediavest, is further uptown at Broadway and 52nd Street. This is where all of the power in advertising —and 90% of advertising budgets—has migrated over the past few decades. Advertising’s creative revolution is just a hazy, boozy memory at this point. Even Y&R has moved from its home on Madison Avenue uptown to Columbus Circle.
But if you look downtown you can see the coming wave of companies that will transform the industry. Thrillist, the millennial men’s lifestyle brand based in SoHo, has evolved from a daily email to a powerhouse in media and ecommerce. PureWow, near Madison Square Park, is doing the same for Generation X women. These media companies are driving revenue from multiple sources, with dollars from banner ads a minor contributor to the overall pie.
Buzzfeed, the hyper growth media company located in the Flatiron district, has dispensed with banner ads altogether. As Jon Steinberg, President and COO of Buzzfeed, said last week on CNBC:
“I think the whole banner ecosystem—people buying banners on big web sites—that’s going to be eaten by social advertising. Facebook will get it, Twitter will get it, Buzzfeed will get a lot of it, YouTube will get a lot of it. No one is going to buy banners anymore from a publisher.”
Buzzfeed is certainly doing its part to make this prediction come true. If you’re a marketer and have ever spoken to an account executive, you know that the Buzzfeed pitch includes a promise not to use banners of any kind to drive traffic to your advertorial content. Buzzfeed will also produce the advertorial for you, hanging content off the buzzfeed.com domain indefinitely. Gone are the days of spending millions with Yahoo! or MSN to create a microsite and keep traffic flowing.
Buzzfeed’s model also means that fewer agency services are required. Even with self-serve platforms like Google Adwords and Facebook, you still needed to develop your own ad copy and images. There was something for agencies to produce and measure. But Buzzfeed produces all the content for you.
Developing content at scale and driving guaranteed traffic has always been the issue with social media, but Buzzfeed appears to have cracked both parts of the problem. The results speak for themselves. In a recent letter to employees, Buzzfeed CEO Jonah Peretti said:
“BuzzFeed reached record traffic of 85 million unique visitors in August. We are 3X bigger than we were just one year ago, 8X bigger than we were two years ago, and we have served more web pages so far in 2013 than we have in the entire previous five-year history of the company. By this time next year we should be one of the biggest sites on the web.”
In the years to come, companies like Buzzfeed may completely transform the ad-driven world of media and the landscape above 34th Street.