BuzzFeed is in the midst of a transformation from a fast-growing startup to a sustainable digital media company, with Chief Revenue Officer Lee Brown leading the charge.
Over the past two years, BuzzFeed’s expanded into every revenue opportunity it can, including programmatic, affiliate and brand licensing. In programmatic, for example, BuzzFeed started with a basic banner offering but it’s slowly adding bells and whistles, too, such as custom native placements and retargeting off sponsored content.
As the head of revenue across BuzzFeed’s advertising business, spanning sponsored content to programmatic, it's Brown’s job to make diversification work. If advertisers work with BuzzFeed in multiple capacities, he must ensure that they see the benefits of combining offerings. BuzzFeed is also trying to expand the types of advertisers it serves by creating offerings for direct-to-consumer brands, whose products already go viral with a mention by the BuzzFeed editorial team.
Brown talked to AdExchanger about how he’s taking BuzzFeed through its next stage of growth, where it moves from trying to amass a bigger audience than the competition to a sustainable business that will outlast them.
LEE BROWN: The outrun phase was about speed to set up brands, learn from platforms and figure out how audiences were responding. That led us to become the fifth-largest audience on the internet, because of our ability to move fast and be on the right side of trends.
We have put ourselves in a tremendous position of strength. Now we think the marketplace has shifted, algorithms are changing. It’s about outlasting the competition, being deliberate in the return on those investments and methodical about how you operationalize and plan the investments you are making. We are here for the long haul and determining our own future.
Your industry reputation is that of a really strong operator. What’s the best operational move you’ve made in recent years?
I anchor on two principles. The first is people and being around people who are excited about change, smarter than I am and driven with the same passion for the industry. I empower them to make good decisions and have the freedom to make mistakes. If you can get that level of trust with the leadership team and the front lines, that’s where you’re able to become an effective operator.
Second, I have a comfort in data. I use it to inform my decisions but don’t let it paralyze my gut. I will push back on teams by asking, “Is the data telling us something different?” One example of that is our diversification strategy. We saw a lot of data early on – from client meetings, RFPs asking for products we didn’t have or CRM systems – where marketers wanted to access the massive scale of our audiences.
Does revenue diversification, and its requirement to serve multiple lines of business, make it harder to run operationally?
That’s why it’s so critical for me to tie these businesses together. They need to not only complement each other, but enhance each other. That’s thinking through how native functions in conjunction with our programmatic business, our affiliate business, our commerce organization and our consultative business, and how we can create better results and more efficiency with our larger strategic partnerships [with clients].
What part of BuzzFeed’s programmatic business is accessing new and different budgets, and what part of it are you able to do as a complementary aspect to branded content?
For the past year and a half, we have been building our programmatic network – the units, the third parties, the right places in our environment for these units to live. Now that we have the pipes and partnerships set up, the next phase is taking what we did in native advertising seven years ago and putting our own unique spin on it: What are the native units we can bring into the environment? We’ve had some early success [in running custom native units], and we are going to have a lot more native available to purchase programmatically this year.
Why do native programmatic units work better?
Our native units have been built and optimized for different client KPIs. They have the same placement on the page as an IAB standard unit, but they perform better. We have a 97x250 native ad that performs 35 times better than banner norms. We also have a shopping showcase unit, where we take a native ad unit and put editorial content with affiliate links in it and enable people to buy it programmatically. That’s a new way to think about bringing more value to programmatic buyers.
BuzzFeed can review a Quip toothbrush or a Target wine and drive a huge amount of sales. How are you turning that experience into an advertising opportunity?
When we saw that early data from editorial, the first thing we did was build out a robust, successful affiliate business. We are one of the top referrers to Amazon via links, and we are driving a ton of sales and volume through our affiliate business.
Where we see this going in the future is a product for DTC-specific [marketing] opportunities. We’ve been instrumental in building those brands, and we can bring those opportunities to more DTC companies in the marketplace.
BuzzFeed offers many different ad products. What do you see the best marketers focusing on?
My recommendation to marketers is to break down silos faster and have fully integrated marketing teams. When there are silos within the agency or company, the programmatic team is only focused on their results, and the content team or affiliate team or TV team is only focusing on their own results.
When they integrate the marketing team, they can tie together results of the content team in conjunction with programmatic. Because when the programmatic team retargets people who have seen content, they see more efficient results. That’s the way of the future.
This interview has been condensed and edited.