When he founded BuzzFeed in 2006, serial entrepreneur Jonah Peretti—who'd previously cofounded the Huffington Post—thought of it as a new-media mad-science lab. Social sharing was the next big distribution channel, he reasoned, and BuzzFeed was a place to create silly shareable content. The site is still brimming with listicles and cat videos, but over the past year, BuzzFeed has undergone a remarkable transformation: It's now also a serious news site, blending in a high-powered team of journalists covering politics, gender issues, technology, music, food, and pop culture. BuzzFeed's scoops dominated the 2012 political season, and the site also saw record traffic, with 12 million unique visitors who viewed the site 26 million times last November, according to Quantcast. Peretti sat down to discuss BuzzFeed's breakout year.
Fast Company: Just over a year ago, you hired Ben Smith from Politico to head up a new reporting team. What was the plan back then?
Peretti: In the early days, the things that would spread on [BuzzFeed readers'] bored-at-work network were cute kittens, Internet humor, things that were inspiring or emotional. But then we realized that the social web moved beyond that content; it started to be about things like the Arab Spring and long-form stories and scoops. We had a lot of content that people wanted to share, and we had a sense of how to craft content to make it so that people would want to pass it around. But we didn't have reporters and scoops. We wanted to evolve along with the social web.
FC: Now that the election is over, how did it work out?
JP: Ben was incredibly successful at putting us on the map in politics. On his second day, he got the scoop that McCain endorsed Romney. He tweeted it, and it was retweeted all over the place. Half an hour later, CNN reported it without crediting us, and then Twitter was in an uproar about that—and CNN was like, "Oh, we have to credit this cat site?"
It's been really fun. Our page views are at a record high, our mobile usage is at a record high, and our app usage is at a record high. Our plan was to have 2012 be an investment year, but we have had a few profitable months, and we've put all those profits back into investments for the future.
FC: You have two different kinds of content—reported stuff and the stuff about cats. Are they attracting two different audiences?
JP: It's the same audience. Have you heard me talk about the Paris cafe? You go to a cafe and you bring a copy of Sartre and Le Monde. There's a cute dog under the table next to you. So after you read the news and the philosophy, you may pet the dog, flirt with someone at another table, and talk about some trivial gossip. All these things are part of being human. You don't become stupid when you turn away from the philosophy and pet the dog. People are complex and multifaceted. When you talk to people who say it dumbs down the audience to have cute animals, the truth is nobody has a choice: because Facebook and Twitter are perfect Paris cafes.
FC: But isn't there a hidden danger, depending on sharing networks like Facebook and Twitter? What if they change their algorithms or become overtaken by other sites?
JP: We aren't a Facebook ecosystem company, like Zynga. So there might be changes where one network starts to decline and another one rises, but if we stay true to making content that invokes people's decision to share, it doesn't matter if a particular platform rises and falls or an algorithm change happens. If you break a news scoop, there are going to be platforms where people share that.
FC: You don't run traditional banner ads. Instead you run "sponsored content"—posts that feel like BuzzFeed content but that are paid for by a brand. Why?
JP: I wanted our ads to have the same advantages as our content—something that people wanted to click on and share. We think of it as the evolution of advertorial. It's a return to Mad Men-era advertising, where media buying and creative were the same business, and where you thought about advertising as telling a story. On the web, that changed; banner ads became the dominant force. There wasn't the sense of craft in it.
What we're seeing now is a return to the past. In fact, we've just started this plan to build the agency of the future for a social world. As part of that, we would make advertising that tries to live up to the standard of earlier eras.
FC: How can you be sure these sponsored social ads work? And how do you convince advertisers?
JP: The challenge is that they're not end-of-the-funnel ads like Google's search ads. But when you compare them to other brand advertising—other top-of-the-funnel ads—we've seen some interesting numbers. We'll do a campaign for GE or Toyota, then we'll do a short one-question survey test with Nielsen. We found that just being exposed to the branded content gives some brand lift if the creative is done the right way. And if you're exposed to it through sharing, it has an even bigger effect.
For example, if we did a list of the coolest hybrid animals for Toyota Prius—
FC: Is that an actual campaign?
JP: Yes. The message says that the Toyota Prius is not the only cool hybrid—look at the liger, look at the donkra, look at the zebra horse. If you see that post on BuzzFeed, it provides brand lift. And if you see it because your friend posted it on Facebook, it will have an even greater impact on you.
We usually only charge for that initial seed on BuzzFeed. But there are repeat buys—and our revenue is growing—because [advertisers] see they're getting Facebook traffic, Twitter traffic, and click-through rates that are 10 times what a banner is. Now we're starting to power ads on the Awl and Fark and some other sites as a pilot.
FC: Is this going to become the next big thing in online advertising—like the equivalent of Google ads?
JP: Google campaigns are very left-brained. You can run them from a spreadsheet. That plays well to one massively scaled company with a bunch of search-engine marketing shops running their media through it. What you see with social advertising is that it requires lots of ideas and also analytics skill to optimize all those ideas. So I think you'll see not one dominant player but a few really big players doing this kind of advertising.
FC: Is BuzzFeed at some level just riding today's meme wave, or have you discovered something new about online news?
JP: My biggest worry is keeping the culture entrepreneurial as we get bigger. We're about 160 people now, and if we double in size, that starts to be pretty big. The natural thing is to become obsessed with not making mistakes. Mistakes are bad, but not nearly as bad as people feeling as if they can't take risks.
If you have that kind of culture, then you're not going to try new stuff. I would rather have the occasional critic saying, "Look at this dumb thing that BuzzFeed did" than have people who are afraid of experimenting.
[Photograph by Michael Lewis]