Profitless Buzzfeed Misses Revenue Target

omg-buzzfeed

The Financial Times reports that Buzzfeed fell short of its 2015 revenue target by 30% and has slashed its 2016 target by 50%. It took Guido 4 years to make a profit. No one ever said it was easy, overnight success generally takes years. Buzzfeed, the cool new kid on the block, has been going 9 years without making a profit. Nine years…

During those 9 years it has burned through hundreds of millions of dollars without paying investors a cent back. Smart people buy into the Buzzfeed concept, that it can reach millenials on their phones and on social networks with viral content as well as disguised advertising in the form of snarky content. They also have a conventional website famous for cat videos and lists. To make advertisers feel better about the online context of their paid content, Buzzfeed has branched out into serious content from serious journalists, with serious investigations and even some politics. It gives the Buzzfeed brand more journalistic credibility. Which goes comparatively unread.

Business Insider, Huffington Post and Vice News are all engaged in an online land grab, promising investors they will grab the global audience first and make profits later. Business Insider sold to Axel Springer for a cool $442 million last year. Outside the US it was not making a profit – though Insiders told Guido they were no longer losing money in London. Insider has a model that makes sense, aiming at time-pressed people interested in business. HuffPo aims to maximise traffic through aggregation and SEO optimisation, selling conventional display advertising – the AOL parent has a massive digital advertising sales operation. Vice is apparently to the millenial generation what MTV was to their parents and appears to be making money hand over fist.

The risk for Buzzfeed investors is that people no longer want the funny GIFs once they graduate, get a job and get busy. This leaves them with teenage “trash-traffic” of appeal only to generic advertisers who won’t pay high prices. Advertisers also worry, now that the novelty has worn off, that the advertorials don’t work or worse still, don’t fit their advertising goals. 


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Scruton reflects on Twitter’s vigilantes…

“We in Britain are entering a dangerous social condition in which the direct expression of opinions that conflict – or merely seem to conflict – with a narrow set of orthodoxies is instantly punished by a band of self-appointed vigilantes. We are being cowed into abject conformity around a dubious set of official doctrines and told to adopt a world view that we cannot examine for fear of being publicly humiliated by the censors. This world view might lead to a new and liberated social order; or it might lead to the social and spiritual destruction of our country. How shall we know, if we are too afraid to discuss it?”

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