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When BuzzFeed Inc. chief executive Jonah Peretti announced the abrupt closure of BuzzFeed News last Thursday, he also ushered in a new chapter for its sister brand, HuffPost, which will now serve as the flagship news operation for the company.
The strategy draws on a number of efficiencies, including uniting news resources under one operation, but it doesn’t account for many of the other unresolved challenges facing the model of free, ad-supported digital media, according to media buyers and analysts.
The two properties differ in a number of key ways, including their brand recognition, traffic patterns and content mix. But their shared business model and ownership naturally limit the degree to which HuffPost can distinguish itself from its former portfolio partner.
“This is an attempt at a soft landing within a friendly publication, but ultimately HuffPost will have the same challenges BuzzFeed News did,” said Ana Milicevic, the principal and co-founder of advertising consultancy Sparrow Advisors.
Benefits of shared resources, audience loyalty and content mix
By reducing the scope of its news operation from two outfits to one, BuzzFeed Inc. could see a number of natural benefits, according to a media buyer who requested anonymity to discuss sensitive commercial relationships.
BuzzFeed Inc. will be able to consolidate its resources into one news publisher, which could help it catalyze growth more quickly. The two properties report on similar subject matter, making the merger of eligible staff and business operations less challenging.
HuffPost has…a big homepage that a generation of web users stuck to.
Ben Smith, the editor in chief of Semafor and former founder of BuzzFeed News
HuffPost also boasts a larger monthly readership and a greater share of direct audience. Between January and March of this year, it averaged 53 million visitors per month, while BuzzFeed News drew 23 million, according to data from SimilarWeb.
Likewise, direct traffic makes up 65% of the traffic to HuffPost, compared to less than 15% at BuzzFeed News.
This discrepancy, largely a product of the habit HuffPost has cultivated in readers over its 18-year history, could help buffer the publisher against the mercurial patterns of social traffic.
“I do think it’s a real sign of the shifting times that Huffington Post—which felt like it had been left behind by the social web—turns out to have a key asset in the post-social world; a big homepage that a generation of web users stuck to,” said Ben Smith, the editor in chief of Semafor and former founder of BuzzFeed News.
HuffPost could also benefit from its greater variety of content types, said digital media analyst Mike Shields. Whereas BuzzFeed News left lighter subjects to BuzzFeed.com, HuffPost has long blended original news reporting with other categories, such as entertainment and lifestyle content.
These lighter, more advertiser-friendly verticals could help subsidize the news content HuffPost produces.
Challenges with ad-supported news and undifferentiated content
Despite these advantages, the core weakness of HuffPost remains its business model, which leaves it susceptible to the many challenges that plague ad-supported digital news.
Many advertisers avoid news inventory completely for fear of brand safety concerns, and news inventory typically generates lower yields as a result. Compounding the matter, HuffPost lacks a robust source of reader revenue to supplement its advertising business.
“One of the biggest challenges we see is that many brands are quick to exclude polarizing news content in the interest of brand safety,” said Michelle Chong, the planning director at the media agency Fitzco.
HuffPost has mitigated these concerns, in part, through its variety of content and its sheer scale. And compared to the expense of news-gathering at BuzzFeed News, HuffPost leans on aggregation to keep its costs of content production lower.
These factors produce better margins for HuffPost, which has helped it achieve profitability, sources said.
In 2021, the publisher generated roughly $30 million in revenue in 11 months, according to earnings reports.
But much of its content is undifferentiated and its ad load skews toward the obtrusive, both of which could trouble any future plans for generating reader revenue.
And as traffic from social platforms continues to dwindle, HuffPost could see less traction from articles designed for virality, such as The 1 Habit Doctors Say Is Secretly Making You Tired the Next Day.
“Quality news is expensive to produce if monetized solely through attention and advertising, especially as social platform engagement isn’t a reliable distribution option,” Milicevic said.
