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Can BuzzFeed revive the youth segment's love for Facebook?

Can BuzzFeed revive the youth segment's love for Facebook?

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BuzzFeed stocks have soared after news came emerged of the publication entering into a deal with Meta Platforms in an attempt to use artificial intelligence (AI) to enhance the company’s online quizzes and content. Stock jumped by 19% in extended trading after the Wall Street Journal broke the news that BuzzFeed would begin using OpenAI’s publicly available API to personalise and enhance its content. OpenAI has been in the news as of late due its fairly new platform, ChatGPT, which has a scarily human-like ability to produce well-researched content in seconds.

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The stock also saw a 50% increase after a separate report by the Wall Street Journal came out saying that Meta was reportedly paying BuzzFeed millions of dollars to bring more creators to Facebook and Instagram as both companies embrace the creator economy in which creators build their followings by posting content and earn significantly off advertising and brand sponsorships from it.

The deal, which was reached last year, was valued at close to US$10 million and stated that BuzzFeed will help to generate content for Meta’s platforms while also training creators and teaching them how to grow their presence online, according to Reuters.

"In 2023, you'll see AI inspired content move from an R&D stage to part of our core business, enhancing the quiz experience, informing our brainstorming, and personalizing our content for our audience," BuzzFeed chief executive Jonah Peretti said in memo to employees that was reviewed by Reuters.

The news comes as Meta battles a declining number of users on its site and the move appears to be a mutually beneficial one to both companies according to professionals in the industry MARKETING-INTERACTIVE spoke to.

"It’s a win-win partnership as BuzzFeed gets a stable and large customer base in Meta, and Meta in turn gets high quality content to keep the flywheel spinning," said Ranganathan Somanathan, the co-founder and curator of RSquared Global Ventures, a business consulting service. With a large partner such as Meta, BuzzFeed can double down and invest in improving the quality and quantity of content created, while Meta is able to monetise the content and resultant audience engagement via ad spends, he explained. 

True enough, it is no question that Facebook has struggled to maintain its position as a platform of choice among creators, despite its many efforts and investments across content verticals, said Don Anderson, the CEO of Singapore-based consultancy Kaddadle. "This deal could be perceived as Meta waving the white flag, having to go outside to increase that platform's competitiveness, and relevance, in the Gen Z and Alpha consumer space," he noted.

Joe Nguyen, a strategic advisor and senior management professional added on by saying that since content moderation has been a hot topic across social networks, it makes strategic sense for Meta to outsource its content creation and moderation to another party.

Can we expect a growth in audience?

Nonetheless, the jury is still out as to whether or not partnership will help Meta bring back its audience engagement with the younger crowd. "I doubt this initiative will help Meta bring back younger audiences, however, it will surely help them with enough content that can be monetised through advertisements," said Somanathan. "If the work Meta is doing around AI driven content recommendation creates a better user experience, combined, it has the potential to arrest any further decline in existing users."

Agreeing with Somanathan, Anderson said that at the end of the day, the number of users Meta is able to draw back will largely rely on its revenue prospects for content creators. "When we consider the creators ecosystem, while sophisticated algorithms and AI are attractive, at the end of the day those making or seeking to make a livelihood out of content creation are inevitably going to look to the revenue prospects. And in short form content, revenue prospects are still not entirely proven, even on TikTok where brand deals and influencer marketing approaches typically provide the highest yield for most creators," he said.

Meanwhile, the news of the partnership also follows BuzzFeed announcing that it would be cutting its workforce by 12% in December last year. Peretti had then said that the company's revenues were impacted by "a combination of worsening macroeconomic conditions, and the ongoing audience shift to vertical video".

"Unfortunately, reducing our workforce is an essential part of cost cutting. Staff salaries are the single largest cost at the company," he said. 

Related articles:
Advertisers will no longer be able to target teens based on gender in new rule by Meta
How ChatGPT exploded onto the scene with so little marketing spend
ChatGPT for dummies: What you need to know and can it revolutionise advertising?

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