Business model of BuzzFeed

Customer Segments

BuzzFeed generates and publishes digital content that is targeted at the general consumer population. It covers topics relating primarily to popular culture and trending topics, as well offering as current news and features, which are aimed at a younger audience. This notably millennials, with users aged between 18 and 34 accounting for around 50% of the Company’s visitors. The Company claims to have 7 billion monthly global content views from more than 200 million monthly unique visitors to its website.

BuzzFeed primarily offers content in English, targeting an English-speaking audience. The Company, however, serves provides content to consumers outside English-speaking countries through its international editions, which include the US, the UK, Germany, France, Spain, India, Canada, Mexico, Brazil, Australia and Japan.

Additionally, BuzzFeed overs a range of advertising solutions across its online and mobile channels to brand marketers, corporations, and advertising agencies.

Value Propositions

BuzzFeed provides value to its customers in the following ways:

• The quality and diversity of its content, with the Company offering users a broad range of content, including coverage of current events, sports, music, travel, entertainment, LGBT issues, and politics, as well as quizzes, and videos;
• Its accessibility, with the Company offering content to consumers through its website and multiple mobile apps free of charge, as well as providing content to a global audience in a number of languages, including Spanish, Portuguese, Japanese, French and German;
• Its large global audience, with the Company attracting 200 million unique visitors each month from around the world, providing a large audience to which advertisers and corporations are able to market their products and services, expanding their access to their target markets; and
• Its social media presence, with the Company utilising social media to generate traffic for its site, publishing shareable content and posting to more than 30 social media platforms around the world.

Channels

BuzzFeed operates its flagship website at www.buzzfeed.com, through which customers can access information about the company and its activities. This website also serves as its principal online publishing channel, with customers able to access the Company’s full catalogue of content directly from its homepage at no cost. The Company’s international editions can also be accessed through the homepage.

The BuzzFeed website can be access through mobile browsers, as well as desktop browsers, with more than 70% of the Company’s traffic coming via mobile devices. This includes traffic driven by its various mobile applications, including its flagship BuzzFeed app, as well as the QuizChat, BuzzFeed News, BuzzFeed Video, and Cute or Not apps. BuzzFeed also reaches its audience through social media, including through its own social media accounts across more than 30 platforms worldwide, and through content shared by its users.

Additionally, BuzzFeed operates a network of 18 offices throughout the world – including across North America, Asia Pacific, and Europe – where it employs dedicated staff to handle its business with advertising customers.

Customer Relationships

BuzzFeed’s offerings to consumers are entirely on a self-service basis, with customers able to access and share online content, manage account details, and download and utilise mobile apps independently, with no contact with BuzzFeed personnel required. The BuzzFeed platform also operates a community portal, through which BuzzFeed users are able to create their own content and interact with other users.

BuzzFeed provides a more personalised service to its corporate and advertising clients, with dedicated sales and account management teams working closely with customers to establish the most appropriate and effective solutions for each individual client. The Company seeks to establish long-term and/or recurring business relationships with its advertising customers.

Customers are able to contact BuzzFeed personnel directly, including its community help, technical support, and editorial teams via online contact forms. Social media also plays a significant role in the Company’s interaction with customers, with the Company interacting directly with posting to more than 30 social media platforms. This includes mainstream platforms such as Facebook, Twitter, Instagram, and YouTube, as well as various video syndication platforms – including Yahoo, AOL, and MSN – and messaging apps, such as KiK, Viber, and Line.

Key Activities

BuzzFeed is a social news and entertainment company that provides coverage of various subjects, including breaking news, entertainment, sports, travel, and politics.

The Company operates a multichannel distribution model, providing content to its customers free of charge through its desktop and mobile websites, as well as through various mobile applications. BuzzFeed also maintains an extensive social media presence, through which it generates traffic for its website and interacts with customers.

The Company additionally provides a range of digital and social advertising solutions to brand marketers and advertising agencies. BuzzFeed headquartered in New York, but also operates offices across Asia Pacific and Europe, including in the UK, Australia, Japan, Brazil, India, and Germany.

Key Partners

BuzzFeed collaborates with a range of companies and organisations in creating and distributing its content. These partners include:

• Supplier and Service Partners, comprising suppliers of tools, technologies and services that support BuzzFeed’s content creation and distribution activities, as well as companies to which certain functions can be outsourced;
• Syndication Partners, comprising a range of online media outlets and website that assist in distributing and sharing BuzzFeed content, in particular its video content;
• Editorial and Advertising Partners, comprising various companies and brand marketers that provide content to the BuzzFeed platform, with such content being designated with a ‘Partner’ tag; and
• Development Partners, comprising a range of video content contributors and talent, with which the Company collaborates on developing exclusive video content through its BuzzFeed Motion Pictures unit.

BuzzFeed has recently secured multi-year partnerships with content creators The Try Guys and Quinta Brunson. The Company has also launched a partnership with GroupM, the media buying arm of WPP, under which it will share data and analytics resources. BuzzFeed has a number of syndication partners, including high-profile companies, such as AOL, Yahoo, Amazon, Bell Media, Tencent, and Rambler and Co.

Key Resources

BuzzFeed’s key resources are its online and mobile platforms, its IT a communications infrastructure, its content and content contributors, social media accounts and community of users, its partnerships, and its personnel.

BuzzFeed owns a number of intellectual properties, including trademarks and copyrights. Searches of records published by the US Patent and Trademark Office, however, did not identify any applications filed in BuzzFeed’s name. The Company also owns and leases a network of physical properties, comprising 18 offices the US, Australia, Brazil, India, the UK, Brazil, Mexico, and Germany.

Cost Structure

BuzzFeed incurs costs in relation to the development and creation of content, the development and maintenance of its online and mobile platforms, the maintenance of its IT and communications infrastructure, the management of its partnerships, and the retention of its personnel.

A substantial portion of the Company’s costs relate to personnel expenses, including the payment of salaries and benefits to its international workforce of more than 1,300 employees. The Company’s most significant content costs relate to its production of video content.

Revenue Streams

BuzzFeed generates revenue through the provision and sale of advertising and marketing solutions. The Company primarily operates a native advertising business model, with BuzzFeed charging clients set fees for creating custom content aimed at that client's customer base. BuzzFeed’s native advertising content are presented in the same style as its typical content. BuzzFeed does not provide traditional display advertising solutions.

BuzzFeed is not a publicly-listed company, and a such is not obliged to publish its financial accounts and report on its website. According to recent reports, however, the Company generated just under $170 million in revenue in 2015, around two thirds of its internal target of $250 million. Having missed its annual revenue target, the Company has since slashed its 2016 revenue target to $250 million from $500 million.