Having failed to achieve its projected revenue targets for 2017, digital publisher Buzzfeed is to lay off 6% of its workforce (around 100 employees) in a shake up following changes to its digital advertising strategy for its editorial content.
In addition, Greg Coleman, digital advertising executive of Buzzfeed who joined as its president in 2014, is to step down with the digital publisher seeking a chief operating officer to take on some of the his duties.
“Transformational year”
In a memo to staff, Jonah Peretti, CEO of Buzzfeed said that 2017 has been a “transformational year” as the company rapidly grew in its content creation and service offering to its audiences.
“As our strategy evolves, we need to evolve our organisation, too — particularly our business team, which was built to support direct sold advertising but will need to bring in different, more diverse expertise to support these new lines of business,” he added, as Buzzfeed looks at changes across board both in its US and UK offices.
Tough year
With shifts around its advertising strategy as well as competition where online advertisers are spending money with the likes of Google and Facebook, it’s been a tough 12 months for Buzzfeed.
According to a report by The Wall Street Journal, the digital publisher’s revenue this year is anticipated to rise by 12% to $280 million, falling short of its intended target of $350 million.
A significant reason for this was the publisher’s move away from native ads to banner ads earlier in the summer. The company introduced banner ads onto its website which were sold using third-party technology on a global basis in the effort to monetise its operated platforms more efficiently.
However, consumers online are now downloading ad blocking software which has prevented the move in becoming a sustainable revenue stream, resulting in Buzzfeed falling short on its revenue targets this year.
Advertising future
Despite the cutbacks, Peretti commented that Buzzfeed’s product offering is as strong and diverse as it was a year ago, with services in place including Buzzfeed Media Brands, Buzzfeed Studios and Buzzfeed Commerce.
The digital publisher’s strategy in moving away from direct sold advertising is coming into effect as it looks to regain its annual revenue growth.
“For the first time a quarter of our annual revenue will come from sources other than direct sold advertising,” said Perretti. “We’re going to continue to aggressively build out our advertising capabilities, but also accelerate this evolution in 2018 with some big steps to reshape BuzzFeed for its future and advance our vision.”