Damian Radcliffe takes a deep dive into BuzzFeed’s eCommerce expansion, from establishing a dedicated Commerce division to its recent roll-out of ‘shoppable recipes’, and collaborations with other brands. You can explore more of these themes, and BuzzFeed’s work in this space, in our new (and free to download) report, The Publisher’s Guide to eCommerce.
BuzzFeed may feel a new kid on the digital block, but the site is actually more than a decade old. Founded in November 2006, the site was estimated to be worth $1.5 billion in summer 2015, although the values of many of these digital darlings (think Vice, Mashable and Mic) have plummeted since then.
Moving away from the listicles and cat memes, for which the site first became known, BuzzFeed launched the award-winning BuzzFeed News in 2012 (that site now employs more than 200 reporters and editors around the world) and the main site has expanded into different markets by publishing international editions for the UK, Mexico, Japan, India, Germany, Brazil and Australia.
The company’s ability to reach millennials, and harness the social web – in the heady days of 2014-16 around 80% of their traffic came from offsite – has attracted investment and attention from old media (NBC Universal purportedly investing $200 – $250 million in 215 and another $200 million in 2016) and media watchers alike.
BuzzFeed now boasts 18+ offices and 1,300 employees around the world. And, despite a difficult past few years – during which time BuzzFeed has reportedly missed its advertising targets (as a private company, exact details are hard to verify), laid off 100 staff and embarked on a very public battle around newsroom unionization – it continues to expand and innovate.
Structuring for new revenue streams
As with many publishers, income diversification is a key strategic goal for BuzzFeed.
BuzzFeed’s CEO Jonah Peretti told CNN’s during a session at SXSW that in 2018 the company generated over $100 million in revenue “from business lines that didn’t even exist in 2017.” This activity, which includes eCommerce, accounted for around a third of the $300 million that BuzzFeed earned last year. Peretti expects to see a similar revenue pattern in 2019.
The Idea, Atlantic Media’s weekly newsletter on the business of media, noted at the end of August 2019:
“BuzzFeed projects it will break even this year and return to profitability next year… To meet these projections, BuzzFeed is betting on revenue growth in two relatively new areas of the business: commerce and off-platform video sales.”
To help achieve part of this long-standing strategic goal, in October 2016, the company established BuzzFeed Commerce, a dedicated division focused on driving social commerce within the company.
Led by serial entrepreneur Ben Kaufman, BuzzFeed CEO Jonah Peretti recalled to Fortune that when he first met Kaufamn in 2014, “Ben was trying to create this idea of products that inspire people, that they want to share, that gives them a way to connect with their friends, and it was a BuzzFeed-y way of thinking about commerce.”
Two years later, Kaufman – and his start-up Scroll – were acquired by BuzzFeed, resulting in October 2016, with the creation of an entity known as the BuzzFeed Product Lab. The unit is tasked with “creating physical products and social commerce experiences, from personalized Tasty Cookbooks and Homesick Candles to new inventions like the Tasty One Top.”
Peretti explained the move was “an experiment, and maybe it won’t work and maybe it will work, but it’s not just an add-on to our business.” “…It feels like social commerce is going to be big in two years from now,” he added, telling Fortune that he wanted BuzzFeed to be ready for when that happened.
Kaufman, who is currently CMO at BuzzFeed, will be stepping down from the company at the end of the year.
One of BuzzFeed’s biggest successes – in terms of both traffic and revenue – is its food brand, Tasty. More than 100 million people follow Tasty on Facebook; and the page has over 97.5 million fans. Tasty reaches nearly 540 million people globally, making it highly attractive to brands.
Tasty’s portfolio also includes a range of additional brands including, Proper Tasty (the British offshoot), Tasty Demais, Tasty Miam, Einfach Tasty, Tasty Japan, Bien Tasty, Tasty Vegetarian, Tasty Grill and Tasty Jr.
Alongside an active presence on social platforms like Facebook, Instagram, YouTube and Snapchat; BuzzFeed’s Tasty also operates a standalone website Tasty.co (with the BuzzFeed name tucked away discreetly at the bottom of the page) and app; has had bestselling cookbooks and operates a dedicated online shop. You can also buy a Tasty Smart Induction Cooktop on Amazon.
Clicking through the links on their own shop, (see images below) takes you to dedicated product pages on the Walmart website. Interestingly, the connection between Tasty and the BuzzFeed mothership is not immediately clear, even though it’s one of the digital publisher’s biggest successes.
In March 2018, BuzzFeed announced a partnership with Walmart, one which would see more than 90 Tasty-branded cookware products sold through the retailer.
This wasn’t the first time that the publisher and retailer had worked together; a model for partnership – starting small and then expanding – which others have followed. In December 2017, Walmart and BuzzFeed had partnered to include links in Tasty videos to buy kitchen tools, groceries and other accessories on Walmart.com and Jet.com.
“Starting today, when you open the Tasty app to view any one of their 2,000+ recipe videos, the recipe will include direct links to the kitchen tools, bakeware, and appliances that you’ll need to create a dish – for instance, a slow cooker, a nonstick pan or measuring cups. And beginning next year, we’ll integrate groceries alongside services like Walmart’s online grocery pickup.”
In August 2019, “shoppable recipes” were rolled out, as the partnership continues to expand. This functionality allows customers to add the full ingredient list from a Tasty video to a Walmart Online Grocery cart. The order can then be picked up at a Walmart store or be delivered to your home.
The partnership with Walmart, is just one of a number of eCommerce strategies being deployed by BuzzFeed.
Led by Kaufman and his 65-person team, the company generated $50 million in revenue during 2018, through a combination of commerce and advertising. Digiday reported at the end of 2017, that BuzzFeed had 19 people writing commerce related content. Since summer 2019, BuzzFeed UK has hired 6 affiliate writers to fuel diversification efforts.
Aside from Tasty, perhaps the most obvious example of these eCommerce efforts are listicles (such as “30 Things Under $10 You Can Get On Amazon That People Actually Swear By” and 19 Skincare Products With Dramatic Before-And-After Photos) with affiliate links.
This type of content can be found on aggregators, like Apple News, as well as BuzzFeed.com. The site has a dedicated shopping tab, with a number of listicle-led verticals, including one just for Amazon. BuzzFeed is a top-five referrer of traffic to Amazon. It also has a merchandise store on Amazon, selling BuzzFeed related swag, as well as a standalone store: Shop BuzzFeed, as well as numerous other ventures, including a homeware partnership with Macy’s.
Beyond this, the company continues to expand its eCommerce efforts, including leveraging their understanding of millennial audiences into helping partners to develop products that reach their target audiences.
In doing this, Forbes notes, they are not alone.
“Platforms like BuzzFeed, Tastemade, Spotify and Pinterest are expanding their business models and core competencies, applying their predictive analytics and trend insights to generate innovate new product ideas for strategic partners.”
One example of these efforts can be seen with Lunarly, a moon-based subscription service, which features a self-care box containing “everything you need to set your intentions and grow, like specially-curated plants or bespoke candles, wellness products, tools for mindfulness, and more.”
Although BuzzFeed’s involvement with this collaboration has been widely reported, there’s no mention of BuzzFeed on Lunarly site, or in a feature on the BuzzFeed site, although the story behind it is told via the “Built by BuzzFeed” pages.
These moves are part of what Jonah Peretti, BuzzFeed Founder & CEO, describes as a strategy which means that:
“Increasingly, we are creating content and brands that generate revenue from many different sources: commerce, advertising, platform revenue, and show development.”
By diversifying their revenues in this way – and spreading their bets accordingly – BuzzFeed are adopting a strategy which others may look to emulate.
Broadly speaking, their goal is to ensure that BuzzFeed and BuzzFeed News, along with BuzzFeed Media Brands (like Tasty, Nifty, Goodful) grow revenue across their core revenue streams: advertising, commerce, and studio development.
“This will lead to many new opportunities,” Peretti predicts.