Pace: Buzzfeed’s competitive advantage
For the past year or so I have been giving talks for students on Google’s Squared programme (and its sibling-programme Squared Online) about the digital landscape. My talk covers a brief history of the internet, the evolution of media, changing customer behaviours and how media and brands are adapting.
Buzzfeed’s my primary example of a media company that understands how content works on the web — and that gives brands many clues about how they should think about digital. As a case study Buzzfeed is useful not just because it is so successful, but because it is open about its approach, tools and strategy which is unparalleled.
“Why are they so open?,” one student asked me the other week. “Can’t people just go out there and copy them?”
Fair question. There are two answers:
First, Buzzfeed talks about its strategy actually has a strategy. As Richard Rumelt wrote in Good Strategy/Bad Strategy:
The first natural advantage of good strategy arises because other organizations often don’t have one. And because they don’t expect you to have one either.
The reason many media organisations won’t share their strategy for digital, for their business, is that they don’t really have one. They are concerned with preservation of old business models. Even companies with strong digital capabilities are essentially concerned with creating digital versions of their old businesses (“Wouldn’t it be great if TV worked on the web?”, “Wouldn’t it be great if advertising worked just as well online?”).
The second answer is that Buzzfeed doesn’t need to keep its strategy a secret. Sure, it may not share its code or spreadsheets, but its success doesn’t rely on being the only company ever to understand how to do this — it is about executing at scale faster than anyone else. (And then selling, most likely.)
I’ve seen evidence of this openness and pace very clearly three times in the last year or so.
1. The Andreesen Horowitz investment. While a lot of business media ran snide stories about the high valuation of a website that specialises in vacuous listicles and cat pictures, canny commentators pointed out that the Buzzfeed press release made better reading than the coverage and detailed where the investment would go — video, commercialisation and other interesting areas that would build an ambitious web media company.
2. The POUND announcement. A while back it shared details of its POUND technology which allows Buzzfeed teams to understand how content is spreading across different channels and optimise its efforts accordingly. (Spoiler alert — Facebook delivers volume, but isn’t the whole story of how things go viral.)
3. Embracing Facebook Instant Articles. Buzzfeed used the occasion of its supporting Facebook to re-articulate its business model (see below) in an incredibly compelling and clear way.
Reading the Facebook announcement about Instant Articles last year, it seemed the quotes from traditional media partners were given through gritted teeth. They knew that they had to work with Facebook to keep reaching the massive audiences there.
Buzzfeed the other hand, really wants to work with Facebook on this because they understand the web as it is. It was the only native web media who was a partner for the launch of Instant Articles, as Adam Tinworth noted.
In a blog post called “Making content for the way people consume media today” (which could itself be a fair summation of the company’s content strategy) Buzzfeed’s publisher, Dao Nguyen and chief of staff, Ashley McCollum, talk about their approach and why Instant Articles fit perfectly with it. They call out four reasons the company is “thrilled” to be working with Facebook:
- Good experience for the user.
- Data and insights. They can still get the data insights they need for their editorial and
- A great business. Facebook helped them build ad units that would work for their “big story unit” approach.
The article also presents a new visualisaton of the company’s business model — the Network Integrated Media Company.
This isn’t theory for Buzzfeed — it’s what the company is building its core business around. Incumbent media may look at this as an ideal state, something for the digital teams, something to pilot or test — none of which will present a signficant challenge to Buzzfeed’s rapidly building knowledge and capabilities.
So, while smart folks elsewhere will try to use this, while observers like myself will continue to exhort others to “copy Buzzfeed”, most won’t be able to overcome inertia and entropy in their organisations. Buzzfeed meanwhile will be miles down the road ahead of them.