Research Briefing: As publishers increase their use of AI, BuzzFeed pivots its business to AI media and technology

89% of publishers use AI

BuzzFeed CEO Jonah Peretti outlines his vision to transform BuzzFeed's flagship publication into an AI-driven technology and media company It said this in its annual letter to shareholders last week. As we see declining referral traffic and other audience attention challenges, Peretti's solution is for BuzzFeed to focus on its own platform to drive traffic and use generative AI chatbots as a new content format. It's about pursuing.

“By reorienting our strategic direction and focusing on the sites and apps that we own and operate, we can directly benefit from the application of technology to our business, especially GenAI. BuzzFeed, Inc. is stronger and poised to leverage the emergence of GenAI to build the media company that will define the AI ​​era,” Peretti wrote.

It remains to be seen whether this will lead to a sustainable business model for traditional digital publishers.

According to a DIGIDAY+ RESEARCH survey of publishers, agencies and brands throughout 2023, AI technologies are permeating media and marketing workflows and processes at a rapid pace, even from one quarter to the next. It is said that there is. In Q2 2023, just under half (49%) of publishers were using AI. By Q3 2023, 89% of publisher professionals told Digiday that their companies were using AI, a huge difference in just one quarter.

But a “pivot to AI” could be the new “pivot to video” from a few years ago (which, to be kind, wasn't a great strategy for most people). BuzzFeed's Peretti himself once promoted short-form videos and creators' opportunities for his network. But that strategy hasn't translated into strong results for BuzzFeed, with 2023 revenue excluding Complex down 26% to $253 million, Peretti wrote in his letter to shareholders. There is.

Insights and statistics:

• As of Q3 2023, publishers were more likely to use AI for internal purposes than for external purposes. In Q3, 38% of publisher professionals said their companies were using generative AI specifically for internal and backend applications, and 25% said they were using the technology for audience-facing applications. I answered.
• When it comes to specific AI applications, in Q3 2023, 70% of publisher professionals said their company uses generative AI applications, and 35% of publisher professionals said their company uses speech-to-text technology. I answered that I am using it.
• “We could have been more of a media company, a content company, or an agency that creates content for clients. We chose to go in the opposite direction to become more of a technology company. That's because the industry's implicit mindset, the technology mindset, will ultimately define our common future. — Jonah Peretti, BuzzFeed CEO, in a letter to shareholders

Read more about how publishers, brands and agencies are using AI

DIGIDAY+ Research Digest

Marketers' usage of X (formerly Twitter) has lagged far behind its social media competitors, and marketing spending on the platform has fallen dramatically. This is according to a first quarter Digiday+ Research survey of brand, retailer and agency professionals. Just under a third (32%) of agency professionals say their clients currently use X, and even fewer (27%) of brand and retailer professionals say their companies use the platform. I answered yes. For context, 94% of agency professionals and 96% of brand and retail professionals told Digiday they use Instagram, while 55% of agency professionals and 73% of brand and retail professionals use TikTok. The answer was yes.

statistics:

• Marketing spending on X has declined precipitously. In Q1 2024, 26% of brand and retailer professionals and 24% of agency professionals said their companies or clients were spending at least a small portion of their marketing budget on X. This is down from 61% for brands and retailers and 65% for agencies. The agency will launch in his first quarter of 2023.
• The decline in marketing spending on X essentially follows Elon Musk's acquisition timeline. Musk acquired Twitter in early Q4 2022. In Q1 2023, 61% of brand professionals said they spent at least a little on the platform. In July 2023, Musk rebranded Twitter as X, but in the third quarter, the percentage of brands that said they spent at least a small portion of their marketing budget on X plummeted to 24%.

• Brand safety is the biggest challenge for marketers in X. His 39% of brand, retailer and agency professionals said brand safety concerns were their biggest challenge with the platform in Q1 2024.

Read more about how to use Marketer X

Agency executives complained about frequent bugs in Meta's ad platform and a lack of adequate compensation for ad overspending. At the recent Meta Day in Slovenia. Some people say that when they complain about overcharging, social networks tend to offer credits for financial losses caused by bugs rather than actual refunds. And the losses can be staggering. When marketing agency Hype10 was hit with a bug in February, CPMs jumped from an average of 15 to 150 in about an hour. Despite these challenges, Meta’s social platform (excluding threads) remains the top social media marketing channel used by agencies in Digiday+ RESEARCH Q1 2024 study. It has been found.

Insights and statistics:

• 94% of agency professionals say their clients currently use meta Instagram, making it their #1 social media channel, while 79% of agency professionals say , clients said they use its meta sibling, Facebook, which came in second place. In third place was Google's YouTube, with 59% of agency professionals saying their clients currently use the platform.

• “It's very frustrating because I'm planning to notify the client that there's been a problem and then explain to Meta's representative that I'm seeking compensation from Meta for overspending. But what happens in the end is , I can't actually hear anything. [back from Meta] about it. ” — Max Langlois, Founder and CEO, Hype10
• “Our advertising system is working as expected for the vast majority of advertisers. We have recently fixed some technical issues to ensure the best possible results for businesses using our app. “We are investigating a small number of additional reports from advertisers to provide updates,” a Meta spokesperson told Digiday about the bug in Meta's advertising platform.

Read more about how agencies use Meta's platforms