In the UK, BuzzFeed pins commercial plans on commerce and video
BuzzFeed has put plans in place to chart a more sustainable growth path in the U.K.
The publisher has focused its U.K. strategy around creating more local video content and commerce-related advertising partnerships, after restructuring and cutting staff globally in January.
Last week, the publisher announced Mark Rogers, former vp, media and marketing, Asia Pacific for Dow Jones, as BuzzFeed’s first U.K. general manager. Rogers will oversee all business, sales and growth across Europe, and report to Matt Drinkwater, svp international brand strategy, BuzzFeed U.S. His hire is intended to show the publisher’s commitment to producing more local content and making more local business decisions.
“We’ve been thinking about structure for a while,” said Drinkwater. “When you’re growing, it’s easier to have a functionally aligned business where different teams report up. When growth slows, that structure becomes difficult. No one is necessarily looking holistically at the business and where the need is for opportunities and efficiencies.”
The last 18 months have been a turbulent time for digital media publishers, including BuzzFeed. In January, the publisher announced it would cut headcount by 15%. In the U.K., the editorial team was reportedly reduced from 37 to 20. The company has dipped in and out of profitability. In 2018, it hit global revenue targets but higher-than-expected operating costs left it needing to make cuts. Since then, BuzzFeed has been on a mission to diversify revenues.
While commerce and video business revenues are growing in the U.S., BuzzFeed’s ad business remains the majority of revenue, which in total was $300 million (£236 million) in 2018. BuzzFeed CEO Jonah Peretti announced in March the company generated more than $100 million (£79 million) in revenue in 2019 from new revenue streams that didn’t exist in 2017 when native advertising was a big focus. BuzzFeed merged its commerce operation with advertising, leading to $50 million (£39 million) in sales in 2018.
BuzzFeed’s native advertising business in the U.K. is also performing well. “We’re experiencing renewed growth in the U.K. business through the first half of this year. It’s the fastest-growing part of the business, in terms of region and revenue line,” said Drinkwater, although he wouldn’t share how much of total revenue the U.K. is responsible for. He attributed the growth to consistency, which agencies agree with.
Group M’s spending with BuzzFeed has stabilized, according to Martin Galvin, digital trading director at GroupM UK. He expects that to increase this year given BuzzFeed has secured more partnerships with agencies within the group than last year.
“That’s a correlation with consistency,” he said. “Big partnerships depend so much on subjective assessment on what a good mechanic is rather than direct performance; it’s hard to mathematically win. BuzzFeed has people on the ground to tie that against strategy and planning; they’re landing that a lot better. We’ve had good business-impacting work that’s been executed well.”
Across its agencies, GroupM UK has spent a similar amount with BuzzFeed over the last five years, typically booking seven-figure partnerships.
The building blocks are being put into place for BuzzFeed UK to grow more commerce-led ad products and video series, according to Drinkwater. “We’re at the precipice of the diversifying story in the U.K,” he added.
Of the 20 video series the publisher plans to make this year, five will be made in the U.K. The first is #What2Watch, a weekly chat show about TV, launching June 6, made exclusively for Twitter and sponsored by Samsung.
As part of the January reorganization, the U.K. video team was given more flexibility to work on editorial and branded content projects. A few people were hired and existing staff were trained in video. In total, the U.K. team is around 80 people. The publisher didn’t split out headcount of specific teams.
Drinkwater also points to a content and commerce campaign with spice brand McCormick as a model for future partnerships, featuring the whole gamut of content and advertising, product co-creation and licensing of BuzzFeed’s food-focused brand, Tasty. In 2020, Tasty will launch a range of spices, created from insights into the most popular dishes from the Tasty audience, plus an ad campaign running across the U.S., Canada and the U.K. BuzzFeed plans to grow these content and commerce opportunities in the U.K. through its centralized commerce team.
“Products like consumer technology are bought on cultural relevance and fashion in the U.K. versus tech capability, as they are in Germany,” said Nick Wright, managing director of Jump, part of Havas Group Media. “For a media entity like BuzzFeed, how to tell the brand story in a culturally relevant way and link it to commerce is brilliant for the brand. It cuts out four or five phases in the customer journey.”
BuzzFeed UK has had different versions of country leads in the past. Kate Burns was gm, Europe in 2015 while Will Hayward was vp, Europe. Compared to Rogers, Burns’ role was more sales focused, said a BuzzFeed spokesperson. Brant McLean came over from the U.S., after Burns’ departure in 2016, as commercial director, UK. Rogers’ hire brings outside-industry perspective and relevant commercial experience in licensing and consumer products, which is a reassuring sign, according to media analysts.
“The general manager role is important and becoming commonplace in many media organizations,” said Alex DeGroote, an independent media analyst. “This also reflects how BuzzFeed is keen to upgrade management in the U.K.”
“From what drives the ability to diversify, you have to have a big, highly engaged loyal audience and a brand that resonates with the audience,” said Drinkwater. “Those factors dictate revenue beyond advertising. In the U.K., we check those boxes; we have the right to go out and work on commerce programs.”
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