BuzzFeed boss Peretti warns of using online ads that 'don't care about readers'

"The way we monetize at BuzzFeed is that we figure things out from the editorial side and then give brands a head start," said the native advertising pioneer.

LONDON — Online publishers are paying the price for using intrusive, and "terrible" third-party software, which has given rise to a surge in ad-blocking use, said Jonah Peretti, the chief executive of BuzzFeed.

Peretti was speaking at Mindshare Huddle Thursday at the media agency’s office here.

Interviewed by television personality Rick Edwards, Peretti said publishers were responsible for a "weird misalignment" – using online advertising and tracking software that "don’t care about the reader."

"They are slow and show ads that are terrible," Peretti said. "We build our own native advertising model, which is not impossible to block but it’s more intelligent and tied into the experience better."

"Increasingly you’re going to see that advertising is going to have to pay its own way and add value by being more entertaining," he continued. "The way we monetize at BuzzFeed is that we figure things out from the editorial side and then give brands a head start, by giving them the format and formulas to reach consumers in an authentic way."

Since launching in 2006, BuzzFeed has grown from a New York City viral lab with Peretti and three others, to a multi-platform content creator and news publisher that now generates five billion content views a month.

But the company has come under fire for interweaving its editorial content with its native advertising content.

When asked by Edwards what "church and state" rules BuzzFeed has for keeping pure editorial stories separate from advertorial, Peretti said editorial roles are kept separate, but would not be drawn on specific rules for journalists. 

"We didn’t used to have any trained journalists and now we have Janine Gibson," said Peretti, refering to the former deputy editor of The Guardian, "who is running our UK office who worked on the Edward Snowden story.

"Between those two points we’ve had a lot of changes to make and improve the quality of what we do. If you work on creating content for brands you don’t work on creating editorial content. You might be inspired by your peers and use other share resources, such as on video you may be sharing studios and sets."

"But we don’t want a situation where someone is doing a brand campaign for Pepsi and then writing a story about Pepsi and having that kind of conflict," he said.

In terms of balancing creativity in advertising with demands placed by advertisers, Peretti admitted BuzzFeed faced similar challenges to a creative ad agency, but claimed the specialist knowledge they had about readers put them in a unique place to do great work.

The 41-year-old chief executive would not discuss the profitability of BuzzFeed, and said a paywall for the site would be out of the question. "We don’t comment on our revenue," he said. "Our goal is growth and we haven’t focused on profitability."

"We wouldn’t consider a paywall because so much of our content is connected to sharing. What doesn’t work is some people are paying to use our site and some others aren’t."

Peretti said BuzzFeed sells its content to other platforms, mostly in the form of video content that is "much more expensive to produce."

The ambition for BuzzFeed for the next five years, he explained, was to drive forward its transformation into a "cross-platform global network" that will quickly be able to reproduce content that goes viral in Germany and adapt for an English-speaking audience, for example.

He also described the publisher's relationship with Facebook as being like "the hot dog and the bun" because one created content and the other managed the distribution network – although Facebook had the "worse" model, he joked.

"We have a pretty similar world view where we think from a social point of view," he said. "We make content and hire reporters but Facebook doesn't do that."

"Facebook has a much worse model where they just create the network... So long as we're adding a lot of value to Facebook users, it's good for Facebook and good for us," he said.

Huddle is Mindshare's annual festival of ideas, in which it shuts down the media agency's London office for a day. Campaign is a media partner. For more information see the Huddle homepage on Brand Republic.

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