A Fountain Of Youth: Why The NBCU-Buzzfeed Deal Makes So Much Sense

We have much heart for the news that NBCU is looking to invest in BuzzFeed and Vox. BuzzFeed represents a core component of the future of media and it’s high time the networks realize they can learn something from these new players.

The deal is also particularly noteworthy, when you look at it in light of NBCU’s last big investment in online media, it’s 2006 acquisition of iVillage, the female-oriented site that was folded into the Today Show seven years later.

iVillage was always a questionable purchase in that it had a narrow audience and limited youth appeal, something the network desperately needed. While the site had a lot of traffic in its heyday, it was unprepared for the social media boom and quickly saw its audience defect to Facebook, Pinterest and other sites. While social did not necessarily have to kill iVillage, the site did nothing to adapt to the changing market and thus its core audience quickly melted away.

BuzzFeed, on the other hand, is all about adapting. It’s gone from a site mostly known for click-bait and listicles to a site that’s capable of serious journalism, as witnessed by the Apple TV story the site broke just last week, as well as  super engaging “post digital” content offerings that draw in readers across many social feeds.

Content aside, BuzzFeed’s real breakthrough has been the development of an ad model that works for today’s audiences—the native ad. As we discussed here several months ago, BuzzFeed’s MO is to create content that attracts a specific demographic and allow that demographic to find those pieces on their own. (That’s in contrast to other sites that serve up specific articles to users based on their demographics, taking choice and serendipity out of the equation.)

This method, which Buzzfeed has dubbed “POUND” (Process for Optimizing and Understanding Network Diffusion) has proven quite successful and the site has pioneered the use of social media to drive traffic, making its users an important component in it marketing chain. That allows it to reach a larger audience, one that welcomes the native advertising BuzzFeed provides. It’s a winning formula, and it’s why BuzzFeed is now being valued at $1.5 billion.

But, much of the PR fanfare has been focused on the wrong areas of why we find this deal to be so interesting and smart. As Peter Kafka and Kara Swisher noted in Recode

People familiar with the proposed deals say they’re part of a new effort from NBCU CEO Steve Burke to bet on digital outlets he thinks can tap into Millennial audiences, who are tuning out of NBCU’s TV networks and most others. The idea is that NBCU can get a crash course on digital content and distribution from its new investments — and that those companies may want to distribute some of NBCU’s content as well.

The television networks of NBCU are, and have been for quite some time, amongst the most progressive and successful media companies in leveraging digital and social platforms to extend audience engagement and flow them back to a screen where they can be monetized in “traditional” ways. In recent years, they have been touting their cross platform ad targeting capabilities and just this past upfront, announced a deeper data sharing initiative with parent company Comcast to fortify it’s NBCU+ offering.

So, take a step back here and look at the breadth of audience data that NBCU would collect. They’d get all of Comcast’s set-top-box data and NBCU Digital’s data, as well as BuzzFeed and Vox data and “audience parting capabilities.” (The ability to sell against a specific audience rather than a specific property) As Linda Yaccarino, president, ad sales at NBCU told Adweek back in May, “We’re going to match anonymized Comcast subscriber data with movie ticket purchases and loyalty card buying,” among other sources of purchaser data. “It’s ready. We’re open for business.”

In effect, NBCU can enhance it’s treasure trove of audience insights data with a rich data set that probably has very little crossover with it’s existing data set. While iVillage gave NBCU an audience of the same 25-to-54 year-old women who were already watching the various networks across the portfolio, BuzzFeed brings in the Millennial and Gen Z audiences the network sorely needs. That boost will be of particular relevance

It’s actually quite a brilliant combination: NBCU gives BuzzFeed the credibility it craves and BuzzFeed gives NBCU the younger audience it needs and a proven methodology that will how to sell against “audience parting” data. A win for both sides and for viewers, who’ll benefit from the conjoined output.

Look for more of these sorts of deals as TV networks realize that they have a lot to learn from the scions of the web who understand the vast reach the TV networks can still give them.