BuzzFeed has signed a new agreement with Culture Genesis that allows the Black-owned, multicultural-targeted media network to package and sell advertising for BuzzFeed’s multicultural content with its own inventory.
This will expand the scale of Culture Genesis’ inventory and give it access to BuzzFeed’s portfolio of multicultural brands, including Cocoa Butter, Perolike, and HuffPost Voices. Meanwhile, BuzzFeed has acquired ad sales partners to help sell ad inventory. Details of the deal, including financial cuts or any data-sharing agreements, were not disclosed.
The move comes at a timely time for digital publishers. Because BuzzFeed needs to increase ad sales. In its third quarter earnings report on November 2, 2023, the company reported that digital advertising revenue decreased 35% year-over-year, bringing in $32.6 million in revenue for the quarter.
Culture Genesis, which owns brands such as All Def Digital, makes most of its revenue by selling ads to YouTube on its own and other companies’ channels. As part of the deal with BuzzFeed, advertisers will be able to purchase brand activations, editorial sponsorships and media inventory from Culture Genesis and BuzzFeed across the web, YouTube, social media, connected TV and FAST channels, said co-founder and CEO said Cedric J. Rogers, CEO. Cultural genesis. BuzzFeed and Culture Genesis claim he reaches 55 million households in the United States.
Five publishing and agency executives interviewed for this article cited other examples of such deals, such as Groupe Black’s alliances with Sea Media and NBCUniversal, where Black-owned media networks have invested in their businesses. pointed out that the allocated advertising costs can be brought to support and the funds can be dispersed. It’s similar to the budgets of other major media companies that don’t have minority ownership.
These deals “were a great way to increase distribution.” [multicultural] budget.buzzfeed [and] A partnership with Culture Genesis would also be attractive for the same reasons,” said an investment director at a major advertising agency who requested anonymity.
BuzzFeed CEO Jonah Peretti declined to say how the ad dollars coming in as part of the deal will be divided, including which creators will be involved and what type of inventory will be available. “It depends on the nature of each transaction,” he said. It’s on sale.
Rogers sees an opportunity for the partnership with BuzzFeed to ultimately expand beyond ad sales, specifically by acquiring multicultural verticals from BuzzFeed or building new verticals with BuzzFeed. He said he is doing so.
Peretti did not deny being open to such conversations. “I think there are a lot of interesting possibilities for us to do more things together in the future. But it’s one thing at a time,” he said.
Investment leaders said in an emailed statement: “The concept of packaging and selling multicultural content is [multicultural and] Black-owned presidents are gaining traction as a way to add scale to partners that are too small to add to media plans. It also provides another space for advertisers to spend money to support: [multicultural] Because there are still very few Black-owned media spaces left with sufficient scale and targeted reach. ”
Rogers said the partnership began last week in advance of the start of Black History Month in February and will include a number of First We Feast shows called “Food Heroes,” which focus on multicultural chefs and restaurants. The company’s advertisers have signed a deal to participate. He declined to reveal the names of those advertisers or the size of their sponsorship deals.
Extorting money from black-owned publishers?
The deal raises questions about whether it means BuzzFeed will receive a portion of the advertising dollars allocated by the agency for diversity efforts made in 2020 and beyond. As of November 2023, 52% of BuzzFeed’s employees were white. Will ad buyers include BuzzFeed ad inventory sold by Culture Genesis in these commitments? Will this take money away from Black-owned publishers?
Justin Burton, Senior Vice President of Digital Strategy and Partnerships at Black Enterprise, and Devon Christopher Johnson, Co-Founder of the Black Owned Media Equity and Sustainability Institute (BOMESI) , praised the deal for allowing Culture Genesis to expand its services to advertisers. .
But this kind of relationship “takes away funding that is earmarked for Black-owned media networks and publishers and essentially narrows it down to white-owned media,” Burton said. “Essentially, you’re taking Black-targeted and Black-oriented funds and pushing that money into publicly traded companies, and that’s not the intent of these commitments that agencies and brands make.”
“We hope this becomes an addition to your media plan.” [for agencies and brands]. I hope this does not mean that other diversity initiatives will be taken lightly,” Johnson added.
Peretti said it was something he had “thought a lot about.” But in his opinion, the deal could free up unspent budgets for smaller, minority-owned publishers due to their lack of size and inventory.
“the [Culture Genesis’] They’re running it on their network, and we’re extending that network across multicultural facilities,” Peretti said. He added that the additional advertising revenue generated through the partnership also creates an “incentive” for companies like BuzzFeed to support the production of more multicultural content and hire more diverse staff.
Rogers pointed out that Culture Genesis splits revenue 50/50 between the multicultural creators in its network and the publishers. He assured Digiday that all inventory sold to advertisers as part of the deal, including BuzzFeed’s, will include a diverse range of creators. But the companies haven’t set specific qualifications for what percentage of viewers or content creators must have diverse backgrounds, he said.
“This whole effort is about making sure all of this money goes to people of color. That’s a really important part of this issue,” Rogers said. “This is not just a profit. [BuzzFeed’s] In short, you need to strategically enable more focused content. [multicultural] audience [and creators]”
A second investment lead from another major advertising agency also agreed with Mr. Peretti. “We think this is a good complement to Culture Genesis as it offers the following benefits: [the name and scale] “While we provide information from BuzzFeed, we remain true to our minority ownership interests and the intent of Covered Inventory,” which is to provide more investment to these companies to help grow their revenues, they said. .
“At the heart of this is fairness. How do we bring fairness to creators and publishers and get them the same kind of revenue as they do?” Rogers said.