This post is by Peter Kafka
from AllThingsD » Peter Kafka
Click here to view on the original site: Original Post
Lots of chatter in medialand today about BuzzFeed founder Jonah Peretti’s state-of-BuzzFeed memo, which is full of boast-worthy boasts: A ton of page views, a lot of employees, and a profit, to boot.
One thing that Peretti didn’t include in the memo: Any mention of how much money BuzzFeed is bringing in.
Which is odd. Because, from what I hear, those numbers are boast-worthy, too.
A person familiar with BuzzFeed’s operations tells me that the site had planned on generating $40 million in revenue this year. But, since sales are booming, they are on track to do something closer to $60 million in 2013.
That windfall, provided by advertisers entranced by Buzzfeed’s native ad pitch, is likely the main reason the site is in the black, though not by a huge margin.
Meanwhile, a different person familiar with BuzzFeed’s operations said the site expects to keep booming next year, and is projecting $100 million in sales for 2014, while averaging something like 150 million uniques (Peretti said his site did 85 million last month).
Since no one wants to talk on the record about this, and since all of those numbers are projections, feel free to take these with as much salt as you’d like.
But, even if the numbers I’ve heard are spot-on, the bigger question for BuzzFeed is how sustainable all this is. Even if you assume that the site will continue to work its traffic magic — and Peretti and crew are really, really good at making things that people want to click on — its ads-that-aren’t-ads model is still a work in progress.
It’s hard to overstate just how buzzy BuzzFeed is in ad and media circles, which means that lots of folks are willing to take a flyer on BuzzFeed’s main offering: “Sponsored content” by “featured partners” that look just like BuzzFeed’s regular articles/listicles.* (From Gas-X: “Here are some more examples of what happens when people are presented with an easy choice … and blow it.”)
But all of those ads take lots of work to create, either by advertisers or BuzzFeed’s in-house staff. And it’s hard to rerun a “native” BuzzFeed ad on other sites, which means there will be a scale question on both ends. For now, though, it doesn’t seem to be a problem.
* As many people in medialand know, but few tend to point out in articles about BuzzFeed (here is one excellent exception from New York magazine), the company sometimes buys traffic so it can get eyeballs on those native ads. Which is not out of the ordinary for Web publishers.**
** Here’s Peretti’s take on paid traffic (again, this number references the 85 million uniques he says he got last month):