Opinion

What do rough seas for Buzzfeed and Mashable mean for Asia?

Buzzfeed and MashableA few clouds of doubt have formed over the future of digital media in recent weeks as two of the online publishing industry’s leading lights, Buzzfeed and Mashable, have reportedly run into trouble. Mumbrella asked media experts what this could mean for the websites’ Asian ambitions and the industry overall.

Late last month Mashable, which had recently raised $15 million, expanded its sales team in Singapore and Australia, but has also just laid off a number of journalists as the company refocuses on producing more video content. Adam Ostrow, Mashable‘s chief strategy officer, tells Mumbrella Asia that the company “remains committed to international expansion” and has seen “tremendous growth” in its global audience and revenue over the past 12 months.

Buzzfeed, a darling of the digital media world that has launched local editions in India, Australia and Japan over the last 24 months, denied a recent report that the company had missed its revenue projections and was struggling to make its branded content business pay despite pulling in massive audiences.

What does this mean for their businesses in Asia? And what does it mean for the industry that two brands that have cracked the millennial vernacular are nonetheless struggling to make digital media pay?

 

Alan Soon, founder and CEO, The Splice Newsroom

Alan SoonAlthough both of these companies are heavily focused on the US market, there’s one thing that’s clear: The days of chasing reach and a mass audience are over. Companies that push for reach end up diluting their own brands at a time when better targeting is delivering niche content to smaller, more engaged audiences. Given the fast changes in ad-tech, and conversely, personalised content, there’s no compelling reason to go mass. Just because people are happy to load up on McDonald’s doesn’t mean that’s what they wanted, or needed. All mass brands fail the key litmus test: What makes your content different?

 

Brenda Chuah, content lead, Starcom

Brenda QuahBuzzfeed’s transition towards Asia shows promise, but nothing is certain. Many western brands have tried to crack the Asian or Chinese market only to fall short of market expectations (Amazon and eBay, for instance). Asia is a hugely fragmented region with multiple cultural nuances that Buzzfeed will have to tread lightly and nimbly to navigate. And even their movement into “serious” news is far from certain – a new area for them and they are going head to head with traditional news organisations which have the resources and depth of knowledge/experience. That said, their bite size format works well in a region that’s social and mobile at its core giving it a good head start but whether it can sustain will depend heavily on their ability to adapt to cultural nuances.

For advertisers, the success of Buzzfeed and Mashable is great news. They provide access to sizeable, loyal, engaged audiences that are comfortable with brands and comfortable with content from brands, as long as it’s good quality. The skill they will both need to demonstrate in Asia is localising content to specific markets to take into consideration cultural nuances, especially when it comes to humour or entertainment. One size fits all won’t work, but this will require further investment and experienced creators.

 

Greg Armshaw, consultant, Greg Armshaw & Associates

Greg ArmshawBuzzfeed falling foul of targets set while raising VC money shouldn’t make anyone worry that the sky is falling in on the social content business. Generating $150 million+ from native content still puts them in the higher echelons of branded content creators. One challenge they do have is that their environment will only suit a certain group of brands even if their audience matches that of the advertiser. Mashable’s move away from news, presumably as an unprofitable content type is a shame, but they do have massive competition.

We should note that for branded content distributors, there is a tremendous increase in direct and indirect competition. For example, Facebook’s feed for many will have a lot more algorithmically matched publisher content in there, as well as ads, feeling similar to a personalised “Buzzfeed”. Also multichannel networks are reportedly signing eight-figure deals with agencies.

How does all this US centric activity have an impact on us in Asia? A more lethargic adoption of content marketing has meant brands adopting this marketing method now are faced with the fact that video is a preferred format among many users. In the US, the increased cost of production is less of a barrier for marketers than in Asia. Costs have reduced though, as a by-product of agencies now having internal content offerings, and brand social teams have included social video production in their increasing competencies. Supporting this are startups like Wochit that facilitate licensed video content for social media use. Platforms like PhotoMoolah help source well-priced original visual assets and stock platforms that have massively ramped up their video catalogue. Therefore the use of video in content marketing is more accessible to Asian marketing budgets, and brands are growing more confident in their ability to create and distribute relevant content. One impact of all this “video competency” might be the reduction in TV production costs.

The market is growing for branded video content and I don’t necessarily see the VC induced perceptual woes of Buzzfeed as warning of impending doom in this area. In fact the $15 million investment in Mashable by Turner suggests they think so too.  

Both Buzzfeed and Mashable have managed to crack the millennial vernacular and, as a result, have managed to grow their audience rapidly over the past few years across many markets, including Asia. Buzzfeed has expanded beyond cat videos and listicles into news and even serious investigative journalism with the recent joint probe with the BBC into tennis match fixing. Similarly Mashable has grown beyond its tech roots to cover a much broader range of content.

 

 

Nik Vyas, content lead, Zenith

Nik VyasThere are an endless number of mainstream news outlets where people can get a slight variation on the same story. Millennials want different, but that doesn’t necessarily have to mean heavy. Buzzfeed and Mashable’s simplification of complicated stories works well for people that want to know what’s going on around them, but don’t have the time or inclination to wade through lots of long form or opinion pieces. Neither publisher has had any difficulty in raising regular funding and investment, as their audiences have been growing, but the challenge for both will be to monetise their sizeable audiences and generate regular revenue. This will become even more acute as they expand their content across formats to do more video and television, which will cost more to produce.

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