BuzzFeed, valued at $850 million this past August, has invested heavily in sponsored content. Yet as a recent story from The Wall Street Journal reveals, advertisers still aren’t sure what they’re getting out of the new media giant’s primary source of revenue.
While virtually every major digital media property seems to have a branded content studio these days, none has pinned as much of its success on native advertising as BuzzFeed, which does not run traditional display ads on its site.
As such, you would have to think the company’s financial stakeholders were displeased to read that, according to one major ad buyer, only 15 percent of clients who syndicated sponsored content on BuzzFeed in 2013 returned for 2014.
From the sound of things, brands have been hesitant to return to BuzzFeed because they have not yet been able to directly link sponsored stories to product sales—a line of thinking that fundamentally misunderstands the role content marketing plays in a company’s long-term success.
As DigitasLBi’s chief investment officer, Adam Shlachter, put it to The Wall Street Journal, “Social lift and buzz is great, but I have to know if that means I will sell more toothpaste.”