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Buzzfeed has long been the advertising agency darling of the digital native advertising trend, thanks to extensive tours of ad agencies around the world. But even their most recent tour of Shoreditch in London didn't manage to stop the slowdown, and now Buzzfeed has said it is laying off about 100 employees in the U.S. That's less than 10% of their global workforce, but the company is also restructuring ad sales “amid a tough digital media market.” In other words, ad agencies no longer believe the hype. The “tough time” that Buzzfeed claims is in the broader digital media marketplace doesn't ring true for everyone. Brian Wieser at Pivotal research forecast +21% growth for digital ad growth in 2017.
Still, for all the risks that follow from these issues, we don't think they will observably impact digital ad growth at this time. This is largely because performance-based marketing is increasingly common, as businesses with digital-centric business models take share (as with Dollar Shave Club vs. Gillette) and concentrate spending on digital media. In total, we forecast +21% growth for the medium in 2017.
In an email to the company's staff, CEO Jonah Peretti - who learned about virals from his Nike Sweatshop stunt - announced that Greg Coleman is stepping down as BuzzFeed’s president and would take on an advisory role instead. The cuts will not affect the Buzzfeed news teams directly, instead, advertising sales should be concerned.
Mediapost reported last week that the U.S. ad market was up by 7% in October, boosted by digital. So it's not that digital ad spend is going away, Buzzfeed. It's just not going to you.