Tuesday, January 1, 2013

How BuzzFeed Generates $20 Million a Year Without a Single Banner Ad

Business Insider explains:

“BuzzFeed doesn’t just want its content to be viral — it wants advertisers to experience virality, too. . . .

“BuzzFeed recently hired former ad-agency executive and Facebook veteran Jeff Greenspan as its chief creative officer, with the mission of boosting so-called native advertising — ads that fit into and play off BuzzFeed's content, rather than just sitting on the same page like a banner ad. . . .

“[BuzzFeed’s] ad team ... starts conversations with brands’ chief marketing officers, not junior buyers. It looks for advertisers and agencies with open minds. . . .

“Today, BuzzFeed doesn’t have a single banner ad on its site. Eschewing the standard media moneymaker, it will generate what industry sources say is close to $20 million this year.

A few examples of BuzzFeed’s native ads, or “branded content”:

Addendum (1/8/2013): More, from the Guardian:

“[BuzzFeed C.E.O. Jonah Peretti] counts advertising reform as one of BuzzFeed’s goals. ‘We work with brands to help them speak the language of the web,’ he said, adding: ‘I think there’s an opportunity to create a golden age of advertising, like another Mad Men age of advertising, where people are really creative and take it seriously.’”

“Just as TV ads are successful precisely because they try to be as evocative, funny, arresting, and memorable as actual TV, there’s no reason why advertising content shouldn’t aim to be as informative or delightful as an original online piece. That’s not a new idea. Consider it a corollary to the rule set by Adolph S. Ochs, the long-ago publisher of the New York Times: ‘Advertising in the final analysis should be news; if it is not news, it is worthless.’”

Addendum (1/16/2013): According to Digiday, the Atlantic has been using branded content for the past three years, and the program now accounts for roughly half of the magazine’s digital ad revenue. A few examples of the Atlantics advertorials:

One of the earliest pieces of branded content came from Gawker, which in 2009 unveiled a True Blood creation to significant criticism. Three years later, the 13-person Studio@Gawker team is projected to generate the majority of the company’s revenue. A few examples of Gawker sponsorships:

As Digiday notes, “The reason brands like the custom approach on Gawker is that the team knows what works for the Gawker Media audience, whether that comes in the form of copy, videos, gift guides, contests, surveys or photo galleries.”