I looked at BuzzFeed’s pitch deck from 2008, when they were just starting out and positioning themselves as a Series A startup with five employees and about 700,000 monthly visitors. They described themselves as uncovering the unique in-between of media and advertising.The problem they point to is that traditional ads don’t hold attention, which is why they argue the future of advertising is advertising as content. Their evidence is mostly traction: the700,000 monthly visitors, which shows people were already coming for this kind of content.
In the slides, they describe BuzzFeed as the next big international technology platform, the YouTube or Wikipedia of buzz and viral media. The deck never puts a number on the market, so I looked it up. In 2008, US online advertising was worth about $23.4 billion (IAB), which I’d treat as the TAM. For comparison, YouTube had 99.5 million US viewers a month (comScore), and Wikipedia had around 684 million visitors that year. BuzzFeed’s 700,000 visitors were less than 1% of YouTube’s audience, so the SOM is much smaller.
The deck markets BuzzFeed as a blue ocean with no competition in its field. As an investor, I would ask what existing media and content platforms already do what BuzzFeed is doing. Beyond being a combination of both, what is its real specialization?
What I want to steal is the way it markets itself as unique through Venn diagrams. It’s a visual cue that this is a blue ocean business. I also want a separate slide on market size, since it helps answer some of those questions from the crowd.
Sources: IAB 2008 report, comScore, History of Information
