What's Happening?
BuzzFeed Inc. announced a 17% year-over-year revenue decline for the third quarter of 2025, totaling $46.3 million. Despite the financial setback, the company achieved a significant milestone by increasing
direct traffic to BuzzFeed.com, surpassing referrals from Facebook and Google. Direct visits, internal referrals, and app usage now account for 63% of BuzzFeed's traffic, marking a strategic pivot away from platform dependency. CEO Jonah Peretti emphasized the importance of building direct relationships with Gen Z and Millennial audiences, which allows for greater innovation and control. The company faced challenges across all revenue segments, with advertising revenue dropping 11%, content revenue falling 33%, and commerce revenue declining 15%. CFO Matt Omer attributed the revenue decline to softness in direct-sold advertising, a decrease in affiliate bonuses, and difficult comparisons to the previous year's presidential election cycle.
Why It's Important?
BuzzFeed's shift towards direct traffic is crucial as digital publishers face increasing pressure from AI-powered search features and platform algorithm changes that reduce referral traffic. By focusing on direct audience engagement, BuzzFeed aims to build a more sustainable business model less reliant on intermediated platform relationships. This strategic move could set a precedent for other digital media companies seeking to diversify their traffic sources and reduce dependency on major platforms like Google and Facebook. The decline in revenue highlights broader market challenges affecting digital publishers, emphasizing the need for innovative strategies to maintain audience engagement and revenue streams.
What's Next?
BuzzFeed has revised its full-year 2025 guidance, expecting revenue between $185 million and $195 million, with adjusted EBITDA ranging from break-even to $10 million. The company plans to leverage seasonal strengths in commerce and advertising during the fourth quarter, particularly around Black Friday and Cyber Monday. BuzzFeed is also focusing on product development initiatives aimed at enhancing direct audience engagement, with CEO Jonah Peretti personally involved in these efforts. The company remains committed to maintaining cost discipline and operational efficiency despite revenue pressures.
