BuzzFeed draws 200 million people to its site every month. To the site’s co-founder, Jonah Peretti, that’s small potatoes. When Peretti took the stage at sun-drenched media lovefest SXSW in Austin this week, he pointed to a far more dazzling number: 18.5 billion.
That’s the number of impressions BuzzFeed earns from the powerful social trifecta of Facebook, Twitter and Pinterest.
All BuzzFeed has to do, Peretti suggested, was to tap the rich audience pipeline of the social networks, serving up its stories, videos and ads on Facebook and Twitter rather than drag readers back to BuzzFeed.com.
It’s an appealing pitch: give the people what they want, where they want it. Forget trying to get readers to click away from their addictive social media feeds, where they tend to spend hours. Leave them there, and bring the news and entertainment to them.
— Ashley McCollum (@McCollumAshley) March 16, 2015
What Peretti didn’t discuss, and what the rest of the news industry will obsess about, is the tug of war that is already rising from this brave new world. Social networks command a readership that doesn’t come cheaply, and revenue-starved media companies need their audiences to justify advertising dollars.
Where Facebook sees enlightened self-interest in working together, news publishers may see an existential threat. As a result, media companies who have ridden a wave of free social traffic are going to have to make hard decisions on how much advertising money they’re willing to give up and and how much editorial control goes along with it.
Peretti is hardly the first to notice that social networks drive huge traffic to news stories. Nearly half of millennials surveyed by Harvard’s media-research center Nieman Lab said consuming news is a major reason they visit Facebook. (Weirdly, 83% visit YouTube for their news too). Facebook alone sent nearly one-quarter of the total visits publishers received in December 2014, according to estimates from Shareaholic.
Facebook knows its power. The social network realizes how much its captive audience means to advertisers and media companies. There have been complaints that the social network is subtly bullying companies into paying to promote posts to earn placement in Facebook’s highly valued newsfeed. The real estate is so valuable, and the readers so numerous, that companies have little choice but to play by Facebook’s rules to get clicks back to their brands.
This is where Peretti pulls away from the pack, choosing to embrace Facebook’s power as a gatekeeper rather than fight it.
Facebook, for its part, appears to be hoping that more people in the news business start thinking like Peretti. The social network has already taken major steps to getting companies like BuzzFeed to publish things like video directly on Facebook, serving up videos right in the newsfeeds of millions of viewers. Twitter also has a video player and acquired its own livestreaming video app, Periscope. Pinterest has been moving to embrace native content on its site.
As much as Facebook and Twitter love the idea of keeping people glued to their newsfeeds or twitter streams without clicking around the web, the idea is scary proposition for news publishers, who traditionally make their advertising money by luring readers directly to their sites.
The potential answer to that, as BuzzFeed and some other have shown, is native advertising, the industry’s term for writing and disseminating native ads in the form of sponsored articles. Despite attracting millions of people with its post on “The Dress,” BuzzFeed didn’t make any money directly from that traffic. In some ways, the Dress acted as an in-house ad for BuzzFeed’s skill in reading a room, drawing traffic for viral hits.
Internet entrepreneur Jonah Peretti speaks at ‘Lessons From BuzzFeed’ during the 2015 SXSW Music, Film + Interactive Festival at Austin Convention Center on March 16, 2015 in Austin, Texas.
Image: Richard Mcblane
The scarier proposition for the news business: handing over to Facebook and Twitter the ability to control the stream of expensively crafted videos, stories and yes, even listicles that carry the brand names of major news organizations.
There is a recent precedent: Snapchat’s Discover. A little purple blob on a Snapchat screen leads readers to a menu of major publishers who have created crisp, animated, bite-size versions of their news. CNN, ESPN, Yahoo! News and Vice have splashed everything from coverage of the cyclone in Vanuatu to March Madness in highly produced, bite-size portions. Viewers are pouring in, with up to one million views for ads, according to a report in Re/Code. The profit adds up fast: the report suggested that ESPN can charge for ads on Snapchat Discover to the tune of $100,000 a day.
For money like this, publishers have to give up some control.
In the Discover system, media companies have to give Snapchat 70% of the revenue generated by their ads, or 50% if Snapchat itself sells the ads. It’s a rich price considering that Snapchat Discover, unlike Facebook or Twitter, features no links back to publishers’ websites. In this relationship, CNN and Vice are merely producers for a channel Snapchat controls.
Not all publishers — not even BuzzFeed — are comfortable with the loss of editorial control their social partners may demand. BuzzFeed had been in negotiations to become one of the publishers on Snapchat Discover, according to a Wall Street Journal report, but BuzzFeed bucked against the idea that Snapchat would influence editorial control. Snapchat maintains that publishers are independent on its platform.
No editor necessarily wants to make decisions based on a platform outside of their control, but Peretti makes an important case for why it may no longer be an option to fight them. Social platforms have shown that the current scale of digital media, even among the giants, is tiny in comparison.
Which means, for good or bad, the editorial tension between companies like BuzzFeed and platforms like Snapchat Discover will have to be addressed.
Jonah Peretti has 18.5 billion reasons to resolve it.