BuzzFeed is sticking to its conviction that journalism is outdated information and influencer-led video and generative AI are the long run.
Throughout its Q1 earnings name on Tuesday, CEO Jonah Peretti touted BuzzFeed’s work with video content material creators and AI-generated quizzes whereas downplaying the choice to shutter its Pulitzer Prize-winning information division final month.
However the firm faces an uphill wrestle in its makes an attempt to get again to some semblance of constructive income progress.
General revenues had been $67.2 million for the quarter, down 27% YOY. Advert income fell 30% to $34.2 million and content material income dropped 33% to $21.6 million. The one vivid spot was commerce income, which grew 6% to $11.3 million on the energy of BuzzFeed’s internet online affiliate marketing enterprise.
Regardless of these income shortfalls, BuzzFeed’s rosy outlook on AI and influencer video contributed to a 3.6% bump in its inventory value throughout after-hours buying and selling.
No BuzzFeed Information is sweet information?
Ending BuzzFeed Information was a part of the corporate’s bigger effort to reorient its flagship model round leisure content material and concentrate on rising HuffPost’s viewers, Peretti informed traders.
He additionally steered the information division’s true explanation for dying was its dependence on social media platforms like Fb to generate site visitors. As Fb’s content material advice capabilities have suffered within the wake of Apple’s deprecation of focusing on alerts, it has change into a much less dependable supply of site visitors to writer websites.
Since HuffPost attracts customers on to its homepage with out relying as a lot on social media clicks, the positioning is best positioned for long-term income progress than “platform-dependent” BuzzFeed Information, Peretti mentioned.
The AI engagement increase
Whereas BuzzFeed is downplaying information, it’s leaning into generative AI.
It launched AI-generated persona quizzes and choose-your-own-adventure-style chatbot-based video games earlier this 12 months, and it plans to roll out extra.
“Generative AI will start to interchange the vast majority of static content material,” Peretti mentioned. “Audiences will start to count on all content material to be customized, interactive and dynamic with embedded intelligence.”
BuzzFeed typically claims that one in every of its biggest strengths is the period of time that millennial and Gen Z audiences spend with its content material – however its share of consideration isn’t rising. General time spent dropped 3% in Q1.
Nevertheless, BuzzFeed is seeing indicators that its funding in AI-generated quizzes is holding audiences engaged. Time spent on AI-powered quizzes was 40% increased over the previous two months in comparison with quizzes written the old school method.
Creator video and branded content material
BuzzFeed additionally sees AI-generated content material and creator-led video as its finest bets for rising its flagging sponsored content material income.
“By leaning additional into creators and AI, we’re on our option to constructing a content material creation mannequin that makes our inventive groups extra environment friendly and considerably expands our output with out rising mounted prices,” mentioned BuzzFeed President Marcela Martin.
On the creator entrance, its short-form movies attracted greater than 1 billion views on each Instagram Reels and YouTube Shorts in Q1, Martin mentioned.
Creator-led content material generates twice as many views per video in comparison with extra conventional video content material, which has inspired BuzzFeed to develop its secure of influencer companions.
Advanced, for instance, which BuzzFeed acquired in 2021, introduced its inaugural class of official content material companions earlier this 12 months. And Tasty, which is BuzzFeed’s flagship model for creator-led video, launched new recurring recipe collection on TikTok, equivalent to “Potatoes 100 Methods,” to generate extra sponsorship alternatives.
“These initiatives proceed to draw advertiser demand from family manufacturers like Campbell’s and McCormick,” Martin mentioned.
To measure the influence that creators have on its enterprise, BuzzFeed is introducing a KPI to trace how successfully it retains branded content material income from advertisers. The KPI will probably be represented on future earnings studies as a share of income collected from advertisers that spent at the very least $250,000 on content material in the course of the prior 12-month interval.
BuzzFeed can also be significantly bullish concerning the alternative to generate extra sponsored content material utilizing AI.
“Audiences love the interactivity, personalization and shareability of [AI] content material,” Martin mentioned. “As we proceed to construct viewers engagement round these new codecs, we count on to translate this momentum into revolutionary merchandise and partnership alternatives for our purchasers.”
