Month: July 2022

Despite the impact to advertising that is already starting to be felt throughout the industry, Baesler told Digiday the company is prepared to keep advertisers spending as well as to win new business thanks to the audience scale of BuzzFeed and the cultural influence from Complex — something that is equally important to help its commerce business get back on track after missing its mark in the Q1 earnings report from May. 

In the past couple of months, the company’s sales team has been reorganized into one operating body that works across all of its brands including BuzzFeed, Complex, Tasty and HuffPost. But the last earnings report still sparked some red flags that the second quarter wouldn’t be as golden as once expected, including CFO Felicia DellaFortuna predicting programmatic advertising revenue being “soft” the next few months. 

While Baesler declined to share much in the way of performance numbers or revenue figures — barred by SEC regulations — he did share his optimism about the company’s current position. Still, indicators of pages being torn from the spring and summer 2020 playbook to be played back two years later could start to show, like the layoffs that occurred of 1.7% of its staff back in March. Ultimately, time will tell how strong BuzzFeed 2.0 can stand on its own. 

Below are highlights from the conversation with Baesler, lightly edited and condensed for clarity.

​​A lot of media companies are starting to feel the impact of the impending recession or are bracing for what seems to be an inevitable economic slowdown. What is BuzzFeed doing right now to prepare for this possibility? 

I can’t give you a step beyond what was already shared on what we’re seeing or what we’re feeling in the market, but more in general on that question, I just joined BuzzFeed now six months ago through the acquisition of Complex and so I’m pretty new to the BuzzFeed side and the role I have here. But BuzzFeed has been one of the strongest companies navigating the pandemic and the recession that followed in 2020, with 2020 actually being a year of profitability after a year of losses in the prior year in 2019. Not just through cost savings, but also through revenue growth and diversification. The BuzzFeed team has proven to be very nimble and agile and always innovating around new products, new monetization, new audience channels and ways to engage with the audience in terms of different formats. That’s really shown multiple times that the team is ready for any macro changes, and has been seeing it as an opportunity to innovate.

Similar on the Complex side, when the pandemic first hit in 2020, Complex was a big video business [with its] shows and studio. The Complex team was super quick to adapt to shoot all those remotely. There wasn’t really any fallout or any missed episodes and sponsorship with these episodes continued as they were before. There wasn’t any disruption to the core business. We [also] do ComplexCon every year as our big festival and during the pandemic, we started launching ComplexLand as a massive virtual festival, all to say that whatever the challenges were the last few years and whatever the challenges of the next few years, I feel confident about our ability to always adapt and innovate, and again, actually improve and improve our core business along the way.

Currently, BuzzFeed’s shares are sitting at $1.50 per share. The intention of going public via SPAC was to raise money for the business, but it seems that leading into what could be a slowdown in the economy, BuzzFeed will be relying solely on the money earned from its revenue lines rather than raised funds. How do you think this poses BuzzFeed Inc. for the looming recession?

As a public company, we can’t comment on our stock price, or what’s driving it or what’s happening or how we feel about it. In general, we’re confident about the potential we have as a business and are looking forward to delivering everything that we’re working on in the years ahead to grow this company. 

BuzzFeed Inc. CEO Jonah Peretti has used the term “resilient” to describe the company. Do you think post-acquisition of Complex, the company will be able to withstand the hit to the advertising market that publishers are already starting to see?

[We] will always watch closely what we’re seeing in the market and what trends are happening with our partners, [but] also with the audience. Audience behavior also changed in 2020 with the pandemic and with the following recession, a lot of retail was happening online during that time. But more broadly, I think the reason why we combined Complex and BuzzFeed into BuzzFeed Inc. now is because those two businesses are so complementary with BuzzFeed having scale and Complex having an audience that is more male than BuzzFeed. 

And then also the products that we offer are more custom in nature on the Complex side – like shows and ComplexCon and ComplexLand – and [on the BuzzFeed side, they are] more scalable and more performance-oriented. So we can serve partners with both. 

And in general, if there’s any sort of economical downturn or challenge, what usually happens is that the partners that you work with go fewer and bigger. So, in general, those clients might work with fewer media companies, fewer publishers, and build deeper relationships [there] rather than go broad. And through this merger, we feel like we can satisfy all audiences in terms of all demographics, all genders, and have meaningful brands with massive scale across all of those. So we feel well positioned for any economical challenges.

How have you reorganized your sales teams or changed the conversations your teams are having with advertisers to be able to sell both sides of the business more efficiently?

When we were just Complex or just BuzzFeed before, we would usually check a few boxes, but maybe not all the boxes of what clients we’re looking for, like, again, looking for innovation or something that is groundbreaking. But then they also want efficiency in terms of pricing and making sure it reaches a lot of people. And independently, we were able to solve for some of it, but together, we now feel like we can solve for all of it. 

We launched our combined sales offering in April, [and] since then, we have a combined sales team, we have a combined sales support team that really has one seller per client. We are really able to unify our approach across all the brands and all the products we have to service whatever needs a partner might have.

Let’s talk a bit about commerce, since in the Q1 2022 earnings report had commerce revenue making up about 12% of the company’s total revenue, despite projections it would be closer to a quarter of total revenue. BuzzFeed Inc. CFO Felicia DellaFortuna said during the quarterly investor presentation that part of this is due to referrals from Facebook being down. How have you been strategizing to get that business to its projected share for the year? 

Commerce is one of our youngest businesses, both for BuzzFeed and for Complex, and we’re still in the beginning stages of learning what works, which platform works [and] which content works best.

We [also] have some different approaches to it. The BuzzFeed side is really about affiliate commerce and inspiring people to shop at retailers, where on the Complex side, it’s about creating original products that have [the] Complex brand on it that we sell to consumers or we collaborate with [artists like] Takashi Murakami on products we sell, which are then more owned and cultural moments that we create. 

So it is a highly diversified business already that we have a lot of success around and I’m very optimistic about the future. 

— Meta has announced that Meta Pay, formerly known as Facebook Pay, has been redesigned for use across all Meta platforms. The digital payment method will allow users to purchase items on all platforms owned by Meta and will allow for more straightforward proof of ownership, making it more accessible to buy virtual items in the metaverse. This announcement follows a similar one made by Apple a few weeks ago about its Apple Pay Later service, which lets users pay for items in installments with no interest or fees.

— Netflix has reportedly been in talks with NBCUniversal and Google about an ad-supported subscription model. The move follows Netflix’s announcement about lower-than-expected Q1 earnings. The streaming service reportedly laid off 150 employees in May, followed by 300 in June, ahead of the impending recession. Netflix’s co-CEOs haven’t shared specifics on what the company’s advertising model would look like, but they have made it public that they are looking at the option of an ad-based subscription tier.

In other news…

• F1 has renewed its deal with ESPN starting in 2025, with ESPN securing the bid over both Amazon and Comcast. The deal is valued between $75 million and $90 million per year, a steep increase from the around $5 million deal ESPN has currently with the auto racing league.
• Elon Musk was granted access to Twitter’s “firehose” of Tweets — the feed of all tweets on the site in real time. The move gives Musk the opportunity to assess the number bots on the site.
• Disney’s board unanimously elected to extend CEO Bob Chapek’s contract for three years. The announcement has drawn some scrutiny due to Chapek’s response to the anti-LGBTQ bill passed in Florida, where Disney staffers staged a walkout in March.
• Google and Wikipedia have made a deal in which Google will pay Wikipedia to inform its Google Search Engine. The partnership is specifically with Wikimedia Enterprise, a commercial digital service started by the Wikimedia Foundation a year ago. 
• CAA has finally acquired ICM in a deal that continues to shrink the number of big agency players in Hollywood. Under the $750 million deal, the two companies will combine their employees into a 3,200-member workforce. 
• Media consulting agency Audience Precision announced new technology platform Precise 360. The platform is a comprehensive media strategy platform that also includes consumer behavioral analytics and will give users insights into engagement across platforms. 
• WPP has acquired marketing technology company Bower House Digital. Bower House specializes in Salesforce Marketing Cloud and enables WPP to drive growth and expand digital experience capabilities.

Additionally, below is a list of industry leader hires

• Pinterest hired Bill Ready as CEO, following Ben Silbermann’s announcement that he would be stepping down
  • Ready was previously the president of commerce, payments and next billion users at Google

• Reuters hired Paul Bascobert as president of Reuters News
  • He was formerly the CEO of Blue Ocean Acquisition Group 

• Aristocrat Gaming hired Oriana Branon as vp of communications and corporate affairs
  • She was formerly the director of corporate communications at Bill.com

• Power Digital hired Stephanie Feldman as CMO
  • She was previously marketing leader of digital services at PwC

• Don’t Tell Comedy hired Brett Kushner as COO
  • He was formerly vp of new initiatives and executive producer at Vox Media/Group Nine