BuzzFeed News' real problem isn't the special counsel's office

Dear Readers,

It was a three-day weekend for some, but not over at BuzzFeed News. The publisher was busy defending its bombshell report on Robert Mueller’s investigation after the special counsel’s office denied the story, which claimed that President Trump directed his lawyer Michael Cohen to lie to Congress. (BuzzFeed stands by its story.) The ordeal raised questions about BuzzFeed News’ credibility and showed the perils of high-stakes reporting on the Trump presidency in a 24-7 news cycle.

But BuzzFeed News, which got its own site separate from parent BuzzFeed in July, has bigger problems.

While other major news outlets like The New York Times and The Washington Post make money through branded content deals and subscriptions, BuzzFeed News relies mostly on programmatic advertising.
That may be a practical move, as it's hard to make big profits on native advertising, but it also speaks to a challenge news sites face as advertisers avoid editorial content that they deem controversial. And BuzzFeed News has pushed the envelope before, when it was the first news outlet to publish the unverified Steele dossier.
Size is another issue. News is a competitive category for advertising, and BuzzFeed News’ traffic as of December was under 17 million uniques, according to comScore, trailing much bigger news sites like NBC News, CNN, and Fox News that are at least five times bigger.
Outside advertising, the site has also started selling $5-a-month memberships. But the site has resisted putting up a paywall, and said it doesn’t expect the membership program to contribute significantly to revenue in 2019.

BuzzFeed News pointed out that it's added 280 new members since the story published January 17 after a few cancellations (without saying how many it has in all), traffic is at a high, and that it's sold some direct ads along with programmatic.

And there could be a bright side to the Mueller article controversy, one ad buyer said.

“Right now, they are not part of the conversation 9 times out of 10 when we discuss advertising on other mainstream or business news properties,” Marcus Pratt, VP of insights and technology at Mediasmith, told Business Insider. “Given their current position with advertisers, I think that a story like this and the ongoing debate may actually be good for BuzzFeed News. It has raised their profile as a news organization, and I think some of the controversy around Mueller’s office disputing the story will blow over or settle as more facts come to light.”

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-- Lucia

Here’s what else we reported on this week:

Walled garden standoff

Facebook and Google get a lot of heat from advertisers for not sharing data that would enable the marketers to compare how their ad campaigns perform across the platforms. Lauren Johnson caught up with Brad Smallwood, Facebook's VP of marketing science, who hinted last year about the possibility of a data-sharing program, but that effort seems to be at a standstill.

To coordinate the program, a neutral third party would have to process and anonymize streams of data. Nielsen is one company that could do this, with its Digital Ad Ratings technology.
But Nielsen still has to deal with privacy concerns that limit what information marketers could get.
Meanwhile, Google is already a step ahead with its own cross-platform program called Ads Data Hub that lets brands match up their own data with impression data from Google and non-Google campaigns. Roughly 9,000 advertisers use Ads Data Hub, up from 4,000 at the end of June, Google said.

Digital media companies brace for a tough year

With the media world buzzing with deal rumors, the heads of BuzzFeed, Refinery29, and Group Nine Media talked about their plans to diversify beyond advertising as they aim for sustainability in the year ahead.

Refinery29 plans to expand its events business, 29Rooms, overseas.
Group Nine Media created a dedicated video studio for NowThis and is scouting for a top-level exec to build a commerce business.
BuzzFeed said it’s close to having half the company's revenue coming from non-direct-sold sources like commerce, programmatic advertising, studio, and platforms.

Here's what we know about Super Bowl advertisers so far

With the Super Bowl two weekends away, we’re getting a taste of how brands plan to capitalize on the big game. Some of the highlights we know of so far:

First-time Super Bowl advertisers include Proctor & Gamble's Olay, which is hoping to make a statement by appealing to female fans, who it says have largely been neglected by Super Bowl advertisers.
Also going for female fans is dating app Bumble, whose first Super Spot is already making waves, thanks to the subject of the spot: the life and career of tennis star Serena Williams.
Skittles will try to steal attention from the main stage by staging a one night-only play called "Skittles Commercial: The Broadway Musical" in place of a Super Bowl ad.

We’ll be updating the list and covering news around the ads leading up to and during the big game.

Broadcast merger mania and your cable bill

Abby Jackson dug up data showing the trickle-down effect of broadcast TV mergers, which last year were at their second-highest level in the past decade.

In 2000, the top 10 broadcasters owned 18% of local broadcast-TV stations, according to Kagan. Today, they own 39%, inclusive of Nexstar's pending deal for Tribune.
With broadcasters having more power, disputes over retransmission fees that are paid to broadcasters have exploded, leading to a surge in blackouts.
Rising retransmission fees have led to a roughly 45% increase in cable bills in the past decade.
Cable customers have more affordable options today, though, from free OTT services to antennas.

Feel free to send tips or thoughts to me at lmoses@businessinsider.com.

Here are other good stories from tech and entertainment:

Acxiom, a huge ad data broker, comes out in favor of Apple CEO Tim Cook's quest to bring GDPR-like regulation to the United States

Leaked memo spells out Facebook's new 'ground rules' restricting employee discussions about politics and religion

Everybody thinks Facebook Stories is a lame Snapchat clone, but it's showing signs of being a huge sleeper hit

Netflix finally broke its Oscar curse with 15 nominations, including its first for best picture and some surprises

The whirlwind success of Netflix's 'You' and 'Bird Box' shows it's become a well-oiled FOMO machine

Join the conversation about this story »

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