how-does-buzzfeed-make-money

How Does BuzzFeed Make Money? The BuzzFeed Business Model In A Nutshell

BuzzFeed is an American digital media company founded by Jonah Peretti, Kenneth Lerer, and John S. Johnson III in 2006. BuzzFeed had a focus on viral content. BuzzFeed’s website relies on advertising to make money. Advertising revenue streams comprise display ads, video advertising, native advertising, affiliate marketing, and subscriptions via the BuzzFeed News service.

Origin Story

BuzzFeed is an American digital media company founded by Jonah Peretti, Kenneth Lerer, and John S. Johnson III in 2006.

Initially, BuzzFeed had a focus on viral content. Named BuzzFeed Laboratories, the company was a side hustle to Peretti’s primary role at the Huffington Post. During this period, BuzzFeed consisted of an algorithm searching the web for viral articles. There were no employees in the form of writers or editors.

Based on information the algorithm had found, instant messaging client BuzzBot sent users links to popular content. The most popular links were then spotlighted on the site after Peretti redesigned it with a more contemporary look. In 2011, BuzzFeed expanded its scope to incorporate long-form journalism and reportage and has won several awards for journalistic merit.

Through a combination of data science and viral content, BuzzFeed grew quickly. Recent figures suggest it has approximately 122 million monthly visitors.

BuzzFeed revenue generation

One visit to the BuzzFeed website and it is clear the company relies on advertising to make money. Let’s take a look at the different types of advertising revenue streams plus a few more below.

Display ads

Display ads encompass banners that occupy various spaces on a website, whether that be the sidebar, footer, or the middle of an article.

BuzzFeed makes money from display advertising in three ways:

  1. Fixed price promotion – any real-estate on BuzzFeed is particularly valuable to a company looking to increase exposure. They may elect to pay a fixed monthly fee to occupy space.
  2. CPC advertising – BuzzFeed earns a fee from the advertiser whenever an ad is clicked on.
  3. CPS (cost-per-sale) advertising – BuzzFeed also earns a fee when a user clicks on an ad and then goes on to make a purchase.

Video advertising and collaboration

With millions of followers on YouTube, Facebook, and other social media sites, the company also collects a substantial sum from video advertising.

BuzzFeed has also worked with Netflix and Universal Television to produce content based on its articles. This arrangement likely involves a contractual fee. Potentially, there are also ongoing royalty payments.

Native advertising

Native advertising can be thought of as an extension of existing BuzzFeed content. Invariably, the author will talk about a product or service in-depth without explicitly promoting it.

Historically, BuzzFeed has partnered with companies such as KFC and American Express and is paid a fixed amount for every piece of native advertising content.

Affiliate marketing

BuzzFeed is also an affiliate for partners including Amazon, Hilton Hotels, and Walmart. When a user makes a purchase in the BuzzFeed shopping section, the company collects an affiliate commission.

BuzzFeed News

Users can also pay $5 per month or $100 annually to get access to BuzzFeed News.

Aside from financially supporting the creation of new content, users receive exclusive gifts, member-only emails, and updates on new projects.

Key takeaways:

  • BuzzFeed is an American digital media company founded in 2006. Using data science and the virality of certain content, the company grew quickly and expanded to incorporate long-form journalism.
  • BuzzFeed makes money through native, video, and display advertising. It has also worked with video producers to create films based on its articles.
  • BuzzFeed acts as an affiliate for eCommerce giants such as Amazon and Walmart. It also offers BuzzFeed News to paying subscribers for a small monthly fee. 

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Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"