BuzzFeed has inked a new deal with Culture Genesis that allows the Black-owned and multicultural-targeted media network to package up and sell ads against BuzzFeed’s multicultural content, alongside its own inventory.
This will increase the scale of Culture Genesis’ inventory, with access to BuzzFeed’s portfolio of multicultural brands like Cocoa Butter, Pero Like and HuffPost Voices. BuzzFeed, meanwhile, gets an ad sales partner to help sell its ad inventory. The details of this deal, including the financial cut and any sort of data sharing agreement, were not made available.
The move comes at a timely point for the digital publisher: BuzzFeed needs to boost its ad sales. The company reported digital advertising revenue was down 35% year over year in its Q3 earnings report on Nov. 2, 2023, bringing in $32.6 million for the quarter.
Culture Genesis, which owns brands like All Def Digital, makes most of its revenue from selling ads on YouTube on its own and others’ channels. As part of the deal with BuzzFeed, advertisers can buy brand activations, editorial sponsorships and media inventory from Culture Genesis and BuzzFeed across the web, YouTube, social media, connected TV and FAST channels, said Cedric J. Rogers, co-founder and CEO of Culture Genesis. BuzzFeed and Culture Genesis claim they reach 55 million U.S. households.
The five publishing and agency execs interviewed for this story pointed to other examples of these deals, such as Group Black’s partnerships with She Media and NBCUniversal, where Black-owned media networks can bring in ad dollars earmarked to support their businesses but then spread out those budgets across other large media companies that aren’t minority-owned.
These deals have “been a great way to add distribution to [multicultural] budgets. A BuzzFeed [and] Culture Genesis partnership would be attractive for the same reasons,” noted an investment lead at a large ad agency, who asked to remain anonymous.
Jonah Peretti, CEO of BuzzFeed, declined to share how they will split the advertising dollars that would come in as part of this deal and that it “depends on the nature of each deal,” including which creators are involved and what type of inventory is being sold.
Rogers said he sees opportunities for the partnership with BuzzFeed to eventually expand beyond ad sales, specifically in buying multicultural verticals from BuzzFeed, or building new ones with them.
Peretti didn’t deny that he was open to these conversations. “I think there’s a lot of interesting possibilities down the road to do more stuff together. But it’s one thing at a time,” he said.
The investment lead said in an emailed statement: “The concept of packaging multicultural content to be sold by a [multicultural and] Black-owned principal is gaining traction as a way to add scale to what may otherwise have been too small of partner to be added to a media plan. It also provides another space for advertisers to spend money in support of [multicultural] audiences, as there remain few Black-owned media areas with enough scale and targeted reach.”
The partnership, which went live last week to preempt the start of Black History Month in February, has signed on a few advertisers to a First We Feast show called “Food Heroes,” which highlights multicultural chefs and restaurants, Rogers said. He declined to name those advertisers or how large the sponsorship deals were.
Taking money away from Black-owned publishers?
This deal does bring up the question of whether this means BuzzFeed would get a cut of ad dollars earmarked by agencies for the diversity commitments made since 2020. As of November 2023, BuzzFeed’s workforce was 52% white. Would ad buyers include BuzzFeed ad inventory sold by Culture Genesis toward those commitments? Would this take money away from Black-owned publishers?
Justin Barton, svp of digital strategy and partnerships at Black Enterprise, and Dévon Christopher Johnson, co-founder of The Black Owned Media Equity and Sustainability Institute (BOMESI), both applauded Culture Genesis for being able to expand their offerings to advertisers with this deal.
However, these types of relationships are “taking dollars that are earmarked… for Black-owned media networks or publishers and essentially filtering it to white-owned media,” Barton said. “You’re essentially using Black-targeted or Black-directed dollars and then pushing it off to a publicly-traded company and that’s not the intent of these pledges that the agencies or brands have made.”
“What I hope this becomes is an additional line item in the media plan [for agencies and brands]. What I hope it does not become is an easy way out from doing other diversity efforts,” Johnson added.
Peretti said this was something he “thought a lot about.” But in his opinion, this deal could unlock budgets that weren’t being fully spent because of the lack of scale and inventory from smaller minority-owned publishers.
“It’s [Culture Genesis’] inventory, and they’re running it on their network and we’re extending that network across our multicultural properties,” Peretti said. Any additional ad revenue earned through this partnership also creates an “incentive” for companies like BuzzFeed to support more multicultural content creation and to hire more diverse staff, he added.
Rogers noted that Culture Genesis splits its revenue 50/50 with the multicultural creators and publishers in its network. He assured Digiday that all the inventory (including BuzzFeed’s) sold to advertisers as part of this deal will include diverse creators. However, the two companies haven’t set specific qualifications of what percentage of the audience or content creators producing the content will have to come from diverse backgrounds, he said.
“This whole initiative is to still make sure that all this money is trickling down to people of color. That’s a very key piece of this,” Rogers said. “This should not just be a benefit to [BuzzFeed’s] bottom line, it should strategically enable more content that is focused and coming from [multicultural] audiences [and creators].”
A second investment lead at another large ad agency agreed with Peretti. “I think it’s a good complement because Culture Genesis is able to benefit from [the name and scale] from BuzzFeed but still stay true to the intent of minority-ownership and targeted-inventory,” which is to provide more investment to those companies to help grow their revenue, they said.
“The core of this is equity. How do we bring equity to creators and publishers to see the same type of revenue that their counterparts see?” Rogers said.
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