Recently, sites like Upworthy, ViralNova and BuzzFeed have built massive audiences in an incredibly short time. Key to that has been an analytical approach to the age-old practice of sensationalistic headlines. What newspapers invented to compete for attention at street-side newsstands, these new-age entertainment rags perfected through data science in the Facebook News Feed.
Let’s dissect the case of BuzzFeed. In the last four months, BuzzFeed has grown its Facebook fan base from 2.6 million to 3.4 million users. On August 13 alone, BuzzFeed’s posts raked in over 185,000 Likes. The growth of a more traditional media metric, unique visitors, has increased at a corresponding rate, with BuzzFeed.com now boasting over 150 million monthly uniques.
In many ways, Buzzfeed and businesses like it have reinvented publishing. Venture capital firm Andreessen Horowitz, recognizing that disruption, is the latest investor to place a big bet on the booming content aggregator market, providing BuzzFeed with $50 million in funding, and bringing its total valuation to roughly $850 million. As New York Times editor Lydia Polgreen tweeted, this is roughly $600 million more than it cost Jeff Bezos to snag the Washington Post. Ouch.
But as quickly as these new publishing Goliaths have risen, they may fall even faster.
That’s because Facebook made a sweeping move on Monday, releasing a blog post promising to curtail News Feed click bait. In the post, Facebook announced its intention to update the algorithm that selects content for the News Feed, in an effort to “help people find the posts and links from publishers that are most interesting and relevant, and to continue to weed out stories that people frequently tell us are spammy and that they don’t want to see.”
Before this announcement, brands were also poised to invest heavily in these sites, thanks to considerable advertising innovation on their part. In the Web 1.0 world, BuzzFeed would have had to monetize by selling ad placement through various networks and intermediaries. Today however, media is increasingly delivered through “native” channels, weaved organically and sometimes indistinguishably with content. The content is the ad; the ad, the content.
The News Feed is a delicate thing. In order to maintain the experience, Facebook must make sure that all of the organic content flowing in front of users is as valuable (Read: contextual and useful) as possible. But to continue its financial growth, Facebook will have to balance that value with ad placements, which traditionally haven’t added much value to user experiences elsewhere on the Web. If advertisers can continue to create more valuable ads -- through better content as well as precise demographic and interest targeting -- then consumers, advertisers and Facebook all stand to benefit. This could reposition BuzzFeed, Upworthy and the others in their space to be among the best advertiser “enablers” for brands in social media. This is a strategy we’ve recently begun to see from Upworthy.
While I’m not sure exactly how the economics of social advertising will shake out for these businesses, I’m 100% sure that advertisers have come to recognize the value of native advertising over interruption-based ads.
And if more and more of the old-school publishing monoliths continue to learn these new rules of the game, then you really might not believe what happens next…