BuzzFeed made e-commerce news recently when it began devoting significantly more resources to its Gift Guide newsletter emails. Having developed a sizable readership and subscriber base via various content tactics, the social media publisher will try to optimize its monetization efforts with a strategy more commonly associated with retailers. In doing so, BuzzFeed reinforces the lesson for B2C marketers about the value of collecting and analyzing data; tailoring offers to customers; and cultivating and working with affiliates.
BuzzFeed is in the business of creating and distributing entertaining and/or newsworthy content, and it does so very effectively (indeed, it recently opened an online store to capitalize on reader enthusiasm for its content). Its remarkable ability to create viral-ready gifs, listicles, and other click-inducing pieces has helped build a highly sought-after audience. Better yet for marketers, BuzzFeed's business model, which generates revenue primarily through native advertising, i.e., sponsored content disguised as regular posts, also works very well. Headlines such as "10 Quotes Every Grad Needs to Read" (a HarperCollins-branded article) and "13 Things You'll Miss Most From Your Twenties" (sponsored by "Younger," a TV Land show) fit seamlessly into the site and attract substantial numbers of clicks.
BuzzFeed draws 80.5 million unique visitors (UV) in the U.S. each month, per comScore's most recent rankings, but BuzzFeed says that figure represents less than one-fifth of its total audience. Over 80 percent of the content it creates is published elsewhere; BuzzFeed Motion Pictures, for instance, gets over 3 billion YouTube views a month. YouTube, Facebook, Snapchat, and its other platforms all track engagement in disparate ways, though, so BuzzFeed no longer includes UV or page views in its key metrics -- the numbers it uses to attract advertisers. Instead, it measures such things as how much time people spend on its content; the "impact" of its pieces; and its number of subscribers, defined as "people who have taken an action to show an interest in the BuzzFeed brand, such as people who use our mobile apps, sign up for our newsletters, visit our homepage, or follow our social feeds."
BuzzFeed's advanced metrics and large, highly coveted audience are no guarantees of enduring success, however. In April, it was reported that the company missed its 2015 revenue goals and was lowering its 2016 estimates. BuzzFeed disputed the report, but it still faces challenges from various corners. Its 80.5 million UV ranked No. 27 in comScore's list of U.S. digital media properties, and scores of outlets now rely on video clips and entertainment news -- BuzzFeed's staples -- to compete for younger consumers and the advertising dollars they can fetch.
It therefore makes sense that BuzzFeed would want to expand its e-commerce efforts. Emails might seem a bit old-school for a new-age publisher, but BuzzFeed's electronic newsletters, and its Gift Guides in particular, have proven to be quite popular with subscribers. Compared to average open rates of 14.8 percent for media emails and 21.2 percent for entertainment emails, BuzzFeed's news newsletters generate open rates of 30 percent, and its Gift Guides are opened 45 percent of the time. In fact, BuzzFeed's emails typically rank among its top six sources of referral traffic, along with such renowned drivers as Twitter and Pinterest.
To capitalize on its email opportunities, BuzzFeed is almost doubling the Gift Guide editorial staff. It's also ramping up the release frequency, content, and customization of these emails. Instead of coming out twice a month, Gift Guides will go out once a week by the end of the 2016 holiday season. Also, instead of featuring one or two products aimed at certain sub-groups of Millennial females, the emails will offer multiple gift ideas targeting the specific tastes of each individual subscriber.
Gift guide emails aren't unique to BuzzFeed, of course. Other outlets regularly use them to engage different parts of their audiences. Nevertheless, BuzzFeed's Gift Guide enhancements highlight three truisms that successful retailers hold dear.
Customer information is king
Whether they market jewelry, sports gear, or cat videos, companies need to continually collect as much information as possible about the people who consume their product or service, then keep scrutinizing it so intensively that they can intuit what their customers want almost before the customers know it. Companies that manage to do so can go beyond expanding the market for their products and start creating desirable products for their market.
Amazon is an archetypal example of this. It analyzed the customer data it had gathered since its 1995 launch to construct a subscription shopping program, Amazon Prime, in 2005. Since then, by continuing to analyze the behavior of members and non-members alike, Amazon has been able to expand and fortify Prime, adding benefits that entice more people to join while convincing current members to stay. Likewise, BuzzFeed is relying on data to enhance its Gift Guides with tailored recommendations that can build credibility with and loyalty from its best customers, thereby ensuring that they'll keep coming back. On a related note...
Personalization is paramount
Consumers are happy to share personal data with their favorite brands in exchange for greater convenience, more relevant offers, and other shopping benefits. The insights gleaned from this information can help retailers improve each customer's experience across multiple channels -- another proven way to drive more repeat visits. (Unfortunately, too many retailers are struggling to turn the data they have on their best customers into successful engagement tactics.)
Again, Amazon offers a valuable blueprint. It merges personal shopping histories with cumulative customer activities to customize product recommendations during every shopper's purchase path. Suggestions include complementary products as well as other items that customers with similar interests have bought. Amazon's recommendation engine is so well-honed that it's believed to play a role in 35 percent of Amazon's sales. BuzzFeed, for its part, is using subscribers' demonstrated interests across the breadth of its content platforms to determine which products to showcase for each of them. To support that effort, it will continue to...
Embrace affiliate marketing
It's a very popular and effective way to generate online revenue, because it rewards all three parties involved:
- The participating retailer gets more traffic to and sales on its website;
- The affiliate marketer receives a commission for clicks and/or sales; and
- The consumer sees relevant, desirable offers.
While many success stories involve small entrepreneurs whose personal income skyrocketed, a Wall Street Journal article last year provided a good example of the power of affiliate marketing even for large companies. Gawker, the publisher of sites such as Gizmodo and Lifehacker, included links within its articles that would direct readers to, say, Amazon product pages for headphones, flashlights, laser printers, and other items. In total, those affiliate links drove about $150 million in online sales in 2015, helping Gawker make "quite a bit" more than $10 million in e-commerce revenue. (Gawker's recent troubles aren't associated with its affiliate marketing strategy.)
As noted earlier, BuzzFeed's business model already revolves around affiliate marketing in the form of native advertising, but there are myriad forms available, and BuzzFeed is taking advantage of several of them. It recently started working with Skimlinks to monetize its content across various platform, and its Gift Guide initiative includes contracting with various e-tailers to curate gift ideas and special offers aimed at specific BuzzFeed subscribers. The editorial team will then create content designed to compel readers to take further action, serving the interests of retailer, publisher, and audience alike.
Affiliate marketing works, and its effectiveness is only enhanced when it's combined with the type of deep data analysis that enables a company to customize deals for individual audience members. BuzzFeed clearly knows all of this. Indeed, its Gift Guide optimization efforts act as another reminder of how valuable these tools of the marketing trade can be.