The decline and fall of traditional media empires is one side of the ongoing turmoil within the industry, but the other side is the rise of disruptive new players, and two of the most prominent names in that category are BuzzFeed and Tumblr. The former has just closed a new round of financing that gives it an impressive war-chest with which to expand, and Tumblr also has a substantial cash hoard it has raised from its venture capital backers, as well as some traffic and user numbers that put it in the top tier of global content networks. While there are some obvious differences between the two, both clearly have their sights set on owning the social-sharing side of the content business — and that means not just traditional content but socially-driven advertising as well.
As my paidContent colleague Laura Owen has reported, Buzzfeed just raised a fourth round of financing — $19.3 million — from a group that was led by NEA and included previous backers such as Hearst and Lerer Ventures, and according to at least one report the site run by former Huffington Post co-founder Jonah Peretti still hasn’t spent the $15.5 million it raised in its previous round of funding. That gives it a potential $34-million cash hoard to hire new writers, build out its network, expand internationally and possibly even acquire a smaller player. Peretti (who will be speaking at our paidContent Live media conference in New York on April 17) laid out some ambitious plans for the cash, saying:
“We have the senior management, board, and investors we need to build the next great media company: socially native, tech enabled, with massive scale.”
BuzzFeed wants to expand its reach, and so does Tumblr
BuzzFeed has already built what was once seen as a provider of light-hearted animated GIFs and other internet ephemera — much like the I Can Has Cheezburger empire — into a fairly substantial media entity with a staff of more than 70 and a series of news verticals that includes a political hub run by former Politico star and now BuzzFeed editor-in-chief Ben Smith. In just the past week, the network has launched a line of e-books with one about the Obama campaign and said it plans to open an office in the UK soon (although paidContent’s Jeff Roberts says in a recent post that the company still faces some questions when it comes to its expansion plans).
The site is also one of the biggest proponents of so-called “native” advertising, which involves helping advertisers and brands come up with content that fits the Buzzfeed profile of easily let me gshareable and potentially “viral” media. Peretti has said that the company has no interest in traditional banner or display advertising, because it believes that advertising has to become more like content in order to survive online — something that other publishers such as Lewis D’Vorkin of Forbes (who will also be at paidContent Live) have also staked their future on.
And that’s where a collision with Tumblr is most likely to occur: just like BuzzFeed, the blogging network has grown at a phenomenal rate over the past year or so — briefly entering the top 10 list of U.S. websites with over 200 million visitors per month and 18 billion pageviews — and it also has a fairly deep war-chest of cash that it has built up through a series of financing rounds. But just like BuzzFeed, the blog platform also has to find a way of generating enough revenue to justify its valuation, and native advertising is the most likely method of doing so, especially when Tumblr seems ideally suited to visual advertising.
“The opportunity that I see in Tumblr because we are such a media network, we are so much about content and attention and creativity, creative content. The opportunity I see is to allow marketers, advertisers to once again make awesome content and put it in the mix with other awesome content. That’s what those products are that we’ve rolled out and are starting to really scale up now.”
The two are more similar than they are different
One obvious difference between the two companies is that Tumblr hasn’t been hiring reporters like Ben Smith or building a stable of writers to pull together viral posts — unlike BuzzFeed, which creates most of its own content in-house, Tumblr is simply a platform for users to share and re-share content that they find elsewhere. However, the similarities are arguably more relevant than the differences: for example, much of what is shared on Tumblr comes from communities like Reddit and 4chan, and so does at least some of the content that BuzzFeed’s writers turn into posts.
And while Tumblr hasn’t hired political reporters away from other sites, it did experiment with producing its own content during the federal election campaign, when it “hired” some of the network’s bloggers to go to the political conventions and post Tumblr-style content related to them — in other words, humorous and/or share-worthy content, rather than typical political reporting. That’s the same target BuzzFeed is going after.
Tumblr has also been making more use of features such as Radar and Spotlight to highlight content from within the network, including ads and brand content. And it has two professional journalists — editor-in-chief Chris Mohney (who will also be at paidContent Live) and former Newsweek staffer Jessica Bennett — who edit and curate content from both inside and outside the network for its Storyboard feature.
So while Tumblr and BuzzFeed might seem very different, they are both well-funded and fast-growing web platforms who want to become major media entities, and who are intent on expanding their reach outside of their traditional user base — and on expanding their ties with advertisers as well, and using social advertising as a way to do that. Is there room for both to play in that market? Obviously there is, but they will likely be bumping into each other a lot more often.