How BuzzFeed is Changing the Media Landscape

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Founded in 2006 by Jonah Peretti and John S. Johnson, BuzzFeed began as a site that used algorithms to curate popular stories around the web. Today, the site is a massive digital media company that delivers news and entertainment to hundreds of millions of people around the world.

Known for its listicles and beautifully random quizzes, such as Pick the Pictures You Love Most and We'll Reveal a Semi-Secret About You , BuzzFeed has become a major media source for the millennial generation.

Running offices in eighteen cities around the world with 1,300 employees, BuzzFeed's popularity has exploded over the last eleven years. Let's take a look at some of the ways it has altered the media landscape and how information is shared.

A Focus on Social Media and Entertainment

BuzzFeed works to make its content shareable on social media platforms. The company currently reports that 75% of its traffic comes from referrals on social media platforms such as Facebook FB or Alphabet's GOOGL YouTube. 

This, of course, follows trends of adults using social media every day, particularly Facebook. As of June 2017, Facebook has 1.32 billion daily active users on the site. By creating content that people want to share with each other on social media, BuzzFeed sets itself up for potential audience growth.

Infamous, of course, are BuzzFeed's quizzes. Because once I know which '90s romantic comedy leading man is my soulmate , I need to know which one is my best friend's (and where I went wrong in my answers to get Joe from You've Got Mail and not Will from Notting Hill ).

The site also creates content that people talk about, such as the popular 2015 debate over what color this dress is. Or how cute this baby and giant dog's friendship is.

The site launched the Community section in 2013, where BuzzFeed users can submit posts to be published online. Members can first submit up to one post a day, and community editors can decide to feature the post if they like it. Over time, community members can create and recommend posts, and BuzzFeed can publish more fun, entertaining content that people will want to share.

Because of BuzzFeed's success, other media sources are beginning to publish content that mirrors BuzzFeed's style. This has led to newspapers and other media sites to create listicles to attract readers, just as I did when I wrote " 7 Fun Facts about Starbucks in Honor of its IPO's 25th Anniversary ."

Changing News Writing

While it has achieved fame writing listicles and sharing quizzes, BuzzFeed doesn't ignore contemporary news. In June of 2016, BuzzFeed split itself into news and entertainment divisions in order to help create a balance between the content the site produces.

According to the Pew Research Center , a majority of Americans now receive their news from social media platforms, primarily Facebook. This gives BuzzFeed a unique position to optimize on the audience they already have on social media to promote their news coverage.

But the site doesn't work like a typical newspaper. While newspapers typically have a comprehensive look at almost everything, BuzzFeed can choose to focus only on the stories that will be popularly shared. This has allowed the site to do a lot of writing on politics, but ignore more banal topics, like the weather, that typical newspapers publish.

Because BuzzFeed is often shared on social media platforms, the site has been working to address the social bubbles people find themselves in. Often, friends on Facebook possess similar ideas and opinions on stories, preventing them from being exposed to different viewpoints.

To address this, BuzzFeed launched the "Outside your Bubble" feature this past February. This effort by BuzzFeed News works to bring a diversity of thought and opinions to a news story being shared. It provides a list of different, summarized viewpoints on the topic at the end of the story. Then, if someone wants to know more about one viewpoint, they can click an arrow to read more. Thus, BuzzFeed's famous listicle has evolved to sharing different points of views with readers.

A Different Approach to Advertising

BuzzFeed doesn't have just any type of advertising; it has branded content. Instead of banner or pop-up ads on the webpage, Buzzfeed offers companies the chance to sponsor content that people will organically choose to look at and share.

For example, the post 10 Childhood Obsessions That We Never Got Over was created by Taco Bell, a subsidiary of Yum! Brands YUM . By being a brand publisher, Taco Bell's logo and Twitter TWTR feed are on BuzzFeed's webpage without being distracting. And when someone decides to share this post, Taco Bell will achieve better success at reaching potential customers.

This strategy has proven successful. Taco Bell participated in a case study, which showed that "those who discovered Taco Bell's sponsored BuzzFeed content through social channels were 195.9% more likely to indicate they would consider trying, can't wait to try, or had already tried their product."

This advertisement strategy has allowed BuzzFeed to avoid having to sell subscriptions to their site, unlike other media and news sites like The New York Times NYT .

The Bottom Line

Media companies have taken notice of BuzzFeed's success. This past November, Comcast CMCSA invested an additional $200 million in the media company, increasing their total investment to $400 million and BuzzFeed's valuation to about $1.7 billion.

While BuzzFeed currently isn't public, the company is reportedly preparing to IPO in 2018. However, the recent IPO of Snap SNAP , the parent company of Snapchat, and its shares falling 23.5% from its IPO price in five months, seems to be a tale of warning for the popular website

And yet, because of the massive changes BuzzFeed has had on the media landscape in the last ten years, the company could find success if it decides to go public.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks
Referenced Symbols: FB , GOOGL , TWTR , SNAP , CMCSA

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