BuzzFeed's Public Filings Show Sunny Outlook For Ecommerce

Publishers have sought to diversify their revenue amid heightened competition from tech companies for ad dollars. In many cases, paid subscriptions or memberships have become more vital, while ecommerce also provides an opportunity for sales growth.

Digital publisher BuzzFeed recently provided more insights into its ecommerce plans as part of the process of going public through a takeover by a blank-check company. Ecommerce revenue will grow faster than its total revenue, making up a bigger part of the overall mix, BuzzFeed said in a presentation filed with the U.S. Securities and Exchange Commission.

The company forecasts that its total revenue will increase by 152% from $421 million last year to $1.06 billion by 2024. Ad revenue won’t keep pace with that growth, rising by 134% to $463 million during the comparable period; nor will content licensing with its projected increase of 63% to $270 million.
Instead, the big growth driver will be ecommerce, which BuzzFeed estimates will grow sixfold to $330 million by 2024. That year, ecommerce will make up almost one-third of its total revenue, up from 13% last year.
The predicted growth in ecommerce revenue comes as consumers continue to shift their spending to online stores. During the first quarter, ecommerce sales in the U.S. rose 39% from a year earlier to outpace the 17% gain for total retail sales, according to the Census Bureau.
As the digital advertising matures and its yearly growth rate falls to the single digits in the next five years, ecommerce can still be a source of growth. That outlook helps to explain why Facebook and Google have expanded their ecommerce support as Amazon becomes a bigger threat to their ad sales.
In an interview with the Financial Times, BuzzFeed founder Jonah Perretti said the company is like a shopping mall that people visit for entertainment, without necessarily intending to buy something. BuzzFeed has figured out how to make ecommerce fun, he said. The company’s forecast suggests it’s also figured out how to make it a source of revenue growth.



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