“What Colors Are This Dress?” asked a simple BuzzFeed poll in February 2015. The now-infamous post received nearly 700,000 concurrent views at its peak that night, more than 28 million views in one day and more than 37 million views to date. Although #dressgate did not initiate on BuzzFeed (that honor goes to Tumblr), the poll and subsequent follow-up articles highlighted a new phenomenon in the way we create and consume content in the Internet age.
In some ways, BuzzFeed is the quintessential digital media startup. As Chris Dixon notes in a blog post on the company, many prominent media companies were born as a result of major technological shifts – Time Inc. enabled by color printing, CBS enabled by radio and Viacom enabled by cable TV. If we think about the world in which we live today, with news and entertainment being created by nearly everyone, distributed via social platforms and consumed via mobile devices, BuzzFeed is a media company of our generation.
Yet in other ways – and in the eyes of many of its critics – BuzzFeed is destroying the very essence of journalism. Its listicles, branded content and memes have spurred a wave of backlash that categorizes the site as silly, clickbait-y and unsustainable.
But that is only part of the story (no pun intended).
Like a good student of the theory of low-end disruption, BuzzFeed started at the bottom of the totem pole, targeting the lowest tier of consumers from a content quality perspective. However, in the decade since its founding, it has steadily crept up-market, building out its roster of reporters across diverse topics and investing in higher and higher quality content. It has squarely forayed into long-form investigative journalism, with pieces on taxpayer-funded “ghost schools” in Afghanistan and deep-dives into America’s largest for-profit foster care company that led to a Senate investigation. Today, the company has more than 1,200 employees across seven countries, including several hundred reporters on its editorial staff.
But what is perhaps most compelling about BuzzFeed is the virtuous flywheel it has built, centered on its sophisticated data operations. The company likes to think of itself first and foremost as a tech company, with a team of more than a hundred engineers and data scientists. Its data-driven learning model means that all the content it publishes, from articles to videos, serves as a feedback loop for how it creates and distributes advertising. Co-founder and CEO Jonah Peretti has likened this cycle to a fleet of continuously-improving self-driving cars. One can also see similarities to Google’s search engine. BuzzFeed has leveraged the Internet and social networks to amass a huge amount of data over time that it uses to understand how ideas spread to become viral among different audiences on various platforms such as Twitter and Facebook, and in turn uses those insights to make predictions about how future pieces of content will fare. A critical piece of the equation is that it also does this for advertising, allowing it to avoid spammy banner ads and instead create more organic, native ads that frequently go viral, leading to happy advertisers and increasing revenues. Key to this success is the startup’s ability to rapidly prototype and iterate in a way that traditional news organizations have not been able to do.
Holistically, BuzzFeed embodies a “full-stack” startup, having built an end-to-end product from the consumer-facing content at the top, to its own distribution platform, down to a custom CMS, proprietary analytics engine and native advertising team.
And while one can debate the impact BuzzFeed has had on the journalism landscape, its numbers demonstrate how it has grown into a global media powerhouse, with 200+ million monthly unique visitors, revenue in the low-to-mid triple digits and profitability. However, the company missed its 2015 revenue projection by ~20% and was forced to cut its 2016 forecasts due to slower-than-anticipated content licensing revenue and monetization, leading to its most recent fundraising round of $200 million last November to be at the same $1.7 billion valuation as the post-money valuation following its capital raise the previous year. Does this spell a twist in the story? Only time will tell, as it is certainly a story that is still being written.