BuzzFeed lives by the belief that journalism is old news and influencer-driven video and generative AI are the future.
On Tuesday’s Q1 earnings call, CEO Jonah Peretti touted BuzzFeed’s work with video content creators and AI-generated quizzes, while also touting its Pulitzer Prize-winning news division last month. We downplayed the decision to close.
But the company is facing an uphill struggle in trying to regain some positive earnings growth.
Overall revenue for the quarter was $67.2 million, down 27% year over year. Advertising revenue fell 30% to $34.2 million, while content revenue fell 33% to $21.6 million. The only bright spot was commerce revenue, which climbed 6% to his $11.3 million due to the strength of BuzzFeed’s affiliate marketing business.
Despite this revenue shortfall, BuzzFeed’s optimistic outlook for AI and influencer video helped the stock rise 3.6% in after-hours trading.
Is it good news that there is no BuzzFeed News?
The demise of BuzzFeed News is part of a larger effort by the company to reorient its flagship brands around entertainment content and focus on growing HuffPost’s audience, Peretti told investors. .
He also suggested that the true cause of the news department’s death was its reliance on social media platforms such as Facebook to generate traffic. Facebook’s ability to recommend content declined following Apple’s deprecation of targeting signals, making it a less reliable source of traffic to publisher sites.
Because HuffPost directs users directly to its homepage rather than relying heavily on social media clicks, the site is better positioned for long-term revenue growth than “platform-dependent” BuzzFeed News, Peretti said. said.
Improved AI engagement
But BuzzFeed, while downplaying the news, is leaning toward generative AI.
The company introduced an AI-generated personality quiz and a choose-your-own-adventure-style chatbot-based game earlier this year, and plans to roll out more.
“Generative AI will start replacing static content in large part,” says Peretti. “Audiences will start to expect all content to be personalized, interactive and dynamic with embedded intelligence.”
BuzzFeed often claims that one of its greatest strengths is the amount of time millennial and Gen Z audiences spend on its content, but its share of attention hasn’t increased. Overall travel time in the first quarter he decreased by 3%.
But BuzzFeed sees signs that its investment in AI-generated quizzes is keeping viewers engaged. Over the past two months, time spent on AI-powered quizzes has increased by 40% compared to traditionally created quizzes.
Creator videos and branded content
BuzzFeed also believes AI-generated content and creator-driven videos are the best way to grow stagnant sponsored content revenue.
BuzzFeed President Marcella Martin said, “By leaning more toward creators and AI, we are moving toward building a content production model that makes creative teams more efficient and significantly scales production without increasing fixed costs. ‘ said.
On the creator side, Martin said its short videos garnered more than 1 billion views on both Instagram Reels and YouTube Shorts in the first quarter.
Creator-driven content generated twice the number of views per video compared to traditional video content, which fueled the growth of BuzzFeed’s stable of influencer partners.
For example, Complex, which BuzzFeed acquired in 2021, announced its first official content partner earlier this year. And Tasty, BuzzFeed’s flagship brand for creator-driven videos, has launched new recurring recipe series on TikTok, including “Potatoes 100 Ways,” to generate more sponsorship opportunities.
“These efforts continue to attract advertiser demand from home brands such as Campbells and McCormick,” Martin said.
To measure the impact creators have on their business, BuzzFeed introduces KPIs that track how effectively they retain branded content revenue from advertisers. The KPI will appear in future revenue reports as the percentage of revenue collected from advertisers who have spent at least $250,000 on their content in the last 12 months.
BuzzFeed is also particularly bullish on the opportunity to use AI to generate more sponsored content.
“Viewers love the interactivity, personalization and shareability. [AI] content,” Martin said. “As we continue to build audience engagement around these new formats, we expect to be able to turn this momentum into innovative products and partnership opportunities for our clients.”
