BuzzFeed Expands Shopping Links Overseas to Rely Less on Ads

(Bloomberg) -- BuzzFeed Inc. is expanding its business of connecting shoppers and retailers to seven more countries as the digital publisher tries to become profitable and rely less on advertising.

Like many media companies, BuzzFeed has a so-called affiliate business, which gives the company a cut of the sale when a reader buys a product after clicking a link on its website.

Those links send readers to e-commerce sites like Amazon.com Inc., and media outlets typically get 10% of the sale. BuzzFeed, which has been embedding affiliate links since 2016, has embraced the business with its famous lists and colloquial headlines such as “Sorry, But If You Don’t Have These 44 Products, Your Kitchen Is Probably Incomplete.”

Since September, BuzzFeed has expanded the affiliate business to Japan, Australia, the U.K., Canada, Mexico, Brazil and India. It’s publishing in the native languages of those countries and working with retailers such as Amazon, Uniqlo Co., Etsy Inc. and Hennes & Mauritz AB.

As part of the expansion, BuzzFeed promoted Nilla Ali to senior vice president of commerce. Ali said media companies often inspire readers to buy products but haven’t been directly rewarded for it. The affiliate business can change that.

“Publishers can build a more sustainable business if they’re getting credit for what they’re driving,” said Ali, who formerly worked on Time Inc.’s e-commerce strategy.

BuzzFeed has a team of writers and editors publishing articles with affiliate links in several countries and works with more than 1,000 retailers. Some shopping-focused posts are being displayed prominently on the BuzzFeed homepage.

It’s become a popular new revenue stream across the industry. Three years ago, for instance, the New York Times bought the Wirecutter, which reviews products and gets a cut of the sales.

One of BuzzFeed’s biggest sellers has been a beauty product called Aztec Secret Indian Healing Clay. One BuzzFeed post about it was headlined: “This Clay Mask Basically Vacuums Out Your Pores, and BRB I’m Going to Bathe in It.”

BuzzFeed is trying to develop new sources of revenue as online advertising growth becomes harder with Facebook and Google dominating the market. BuzzFeed’s commerce business, which includes affiliate links and product licensing, has grown to 21% of its total revenue this year from 9% in 2017.

BuzzFeed is on pace to increase sales this year and generate more than $300 million in revenue, which the closely held company said will represent a single-digit percentage increase from last year. It expects to turn a profit in the second half of 2019 but not be profitable for the year.

In January, BuzzFeed cut about 15% of its staff. The company doesn’t have any immediately plans to go public.

In May, Recode reported that Amazon had approached some U.S. publishers, including BuzzFeed and the New York Times, about potentially paying them to expand their affiliate business overseas. A BuzzFeed spokeswoman declined to comment about its specific business deals with retail partners.

BuzzFeed plans to expand its affiliate business beyond retail into new industries like education, finance and entertainment. As an early example, it published an article last month listing the shows and movies on the new Disney+ streaming service, calling it “a genuine gift from the movie gods of past, present, and future!” The post included links that sent readers to a Walt Disney Co. website where they could subscribe.

“We think there’s a lot of opportunity to expand beyond the retail vertical,” Ali said.

To contact the reporter on this story: Gerry Smith in New York at gsmith233@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, John J. Edwards III, Rob Golum

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