NBCUniversal has invested $200M in BuzzFeed, with both companies looking for a “strategic partnership.” With this deal, NBCUniversal likely hopes to gain access to BuzzFeed’s younger—and exponentially growing—audience. BuzzFeed seeks money to grow and the opportunity to leverage NBCUniversal to widen the reach of higher-value content (like TV or video from BuzzFeed’s Motion Pictures arm).
WHY IS THIS HAPPENING?
The deal aligns with quickly accelerating marketplace trends, including:
WHAT DOES THIS MEAN for ADVERTISERS?
In recent years, brands looking to engage millennials have turned to BuzzFeed for its highly prominent native advertising opportunities:
BuzzFeed seeks $250M in revenue in 2015 (up from $100M in 2014) (All Things Digital, 2013). Currently, BuzzFeed’s revenue comes largely from native advertising—the “Top 10” or “14 Signs” article-and-image variety, embedded within the stream of similar organic content. But could this format be getting a bit old? If the NBCUniversal partnership does enable BuzzFeed to widen the reach of higher value original content—TV, movies—BuzzFeed may (1) gain licensing revenue from that content (much like how Vice licenses content to HBO) or (2) monetize that content directly with new advertising opportunities.
And in the spirit of BuzzFeed, this advertising could be native-style—matching the visual design of the platform it lives on, with the look-and-feel of organic content. This means that many brands would have to elevate their content production capabilities, focusing on creating or repurposing video.
With potential new opportunities stemming from the BuzzFeed/NBCUniversal partnership, content is becoming even more valuable than it already is.
For more info on Content Marketing, Native Advertising or BuzzFeed/NBCUniversal please contact your performance account team today.