BuzzFeed readers will now be able to buy the products recommended in its reviews and listicles within the website itself, the way they do from other eCommerce websites like Amazon.
The publisher has partnered with commerce enablement platform Bonsai to offer this feature.
“Long-term revenue solution”
BuzzFeed has long recommended products to its audience, earning affiliate revenues whenever readers click on its links. It generated $300M in product sales last year. With its current move, the publisher is aiming to create a sustainable revenue stream by building its own eCommerce platform and reduce reliance on affiliates. The strategy will also help BuzzFeed develop a more direct relationship with shoppers.
Publishers are looking for a long-term revenue solution that affords customer ownership. eCommerce provides a natural way for publishers to deepen their relationship with their audience.Saad Siddiqui, CEO of Bonsai
“Publishers like BuzzFeed that have really embraced affiliate over the last few years and built a solid business, and they’ve actually trained their audience to shop from them and expect to be sold product—those publishers are really ripe for this kind of product,” Saad Siddiqui, CEO of Bonsai told The Wall Street Journal’s Ann-Marie Alcántara.
“Commerce has always been an important growth driver for BuzzFeed,” said BuzzFeed’s Senior VP of Commerce, Nilla Ali. “What we’ve seen through the ongoing pandemic is the benefit of diversifying our commerce capabilities in the same way we’ve diversified our business model, and the power of leaning into our digital advantages as consumers increasingly shift to online shopping.”
Creating our own e-commerce platform gives us the opportunity to own the entire user journey and create an even deeper, more direct relationship with our readers.Nilla Ali, Senior VP of Commerce, BuzzFeed
“We know that we drive meaningful discovery for our audiences, and we’re now focused on collapsing that journey from discovery to conversion,” she told AdAge.
The partnership will also help BuzzFeed earn an average commission of 25% on sales from Bonsai’s merchant network and own customer lifetime value. Comparatively, when BuzzFeed links out to other retailers’ sites, the average commission rate is 10% per sale. Bonsai will get a cut, but the figure was not shared.
“A real opportunity for us to reclaim some of that profit”
The integration of products directly into BuzzFeed’s content will also allow for better attribution. This helps solve a longstanding issue for publishers within the affiliate business, something that BuzzFeed CEO, Jonah Peretti had written about in a post earlier this year, outlining his vision for the company in 2020.
“Our work in commerce also will be part of solving a longstanding problem in the media industry where content creators provide the inspiration to buy a new product, go on a vacation, or watch a new show–but don’t capture much of the economic value created,” wrote Peretti.
This is sometimes referred to as the “attribution problem,” where Google and other middlemen end up capturing value they didn’t create. We see a real opportunity for us to reclaim some of that profit.Jonah Peretti, CEO, BuzzFeed
“The convergence of mobile content and mobile commerce means we can finally make progress on this problem,” he added. “The traditional marketing funnel can be compressed and consumers can move more fluidly from inspiration to transaction.”
Ali told WSJ that the relatively recent spread of checkout functionality beyond traditional eCommerce platforms to a range of websites and apps, partly influenced the current move. She referred to Instagram’s Checkout feature, which allows users to buy products tagged in posts and stories without leaving the platform.
People weren’t inclined to shop outside traditional eCommerce sites just two years ago, added Ali. “But now with Instagram’s native checkout, and more influencers pushing products through their feed, consumer behavior has shifted.”
According to PopSugar Insights, “67% of millennial women wish that they could take advantage of the benefits of shoppable content and instantly purchase the products they see in digital content, such as articles, photo galleries, or videos.”
“Earn larger revenues and track and market to readers”
“Given this demand from consumers, it is clear that the lines between social, eCommerce and editorial are going to become increasingly blurred,” says Damian Radcliffe, Journalist and Professor at the University of Oregon.
As shoppable content gathers momentum, more and more outlets will explore the potential for telling stories with eCommerce with touchpoints baked into them.Damian Radcliffe, Journalist and Professor at the University of Oregon
BuzzFeed’s partnership with Bonsai comes at a time when traditional affiliate networks have been reducing or suspending affiliate programs, writes Dianna Christie for Marketing Dive. “Walmart and Amazon have both pulled back on affiliate options since the pandemic started. With these relationships challenged, BuzzFeed is now looking to own the entire consumer journey within its content, which could allow it to earn larger revenues and track and market to readers.”
eCommerce is one way many publishers have been trying to diversify their revenues. But it is just another form of platform dependence, according to Max Willens, Platforms Reporter at Digiday.
“Pandemic exacerbated issues already challenging publishers”
When Amazon slashed affiliate commissions in April it was a painful reminder to publishers about how their reliance on the big tech companies could backfire just like it had when Facebook deprioritised news in its feed.
“Commissions on commerce staples including headphones, beauty products and business supplies had been cut in half, from 6% to 3%,” writes Willens. “Commissions on home products, a fast-growing category with so many people now sheltered in place, had been cut by nearly two thirds, from 8% to 3%; commissions on health and personal care products, another major growth area, fell from 4.5% to 1%.”
While many publishers have embraced commerce recently as a way to diversify their businesses, the Associates changes could lay bare how reliant many publishers still are on Amazon. Few expect these commission shifts to be temporary measures. Once rates are dropped, they rarely spring back to where they were.Max Willens, Platforms Reporter, Digiday
“The Coronavirus pandemic exacerbated issues already challenging publishers. Not only did it highlight the volatility of ad-supported business models, it revealed that exclusively affiliate-led eCommerce models don’t provide publishers the depth to weather a storm,” says Siddiqui.
“This is a field which has momentum”
BuzzFeed initially took a hit during that time, but was able to rebuild that revenue stream by tapping into more direct relationships with 1,000 retail partners, Ali revealed in a Digiday+ Talk. She added that they are expecting commerce revenue to be up YoY at the end of 2020.
More people are shopping online, conversion is higher and we’re getting better at anticipating consumer demand because it’s happening in real time. If you have not had a commerce business in the past or you haven’t doubled down on it, now is the time to do so.Nilla Ali, Senior VP of Commerce, BuzzFeed
“Test as many things as you can right now because the influx of people shopping online means the signal we can get in real time is much faster,” she suggested. “It is a time to be risky and get as many learnings under your belt as possible and make money while you’re doing it.”
Later this year, BuzzFeed plans to distribute its marketplace across third-party platforms and leverage Bonsai’s social commerce integrations.
“This is a field which has momentum; and as a result, we can confidently expect more publishers to get involved in eCommerce over the coming months and years,” Radcliffe writes in The Publisher’s Guide to eCommerce.
“For most players it will never be a panacea for historic business models, but eCommerce looks to become an increasingly essential component of a growing number of publishers’ revenue streams. Subsequently, this is a trend no publisher—large or small—can afford to overlook.”