Chart of the Week: Is the Buzzfeed IPO overhyped?
The IPO door seems wide open again: following Snap’s much-hyped offering, dozens of companies are revisiting their plans to go public: Airbnb, Spotify, and Uber are all rumored to be considering 2018 offerings. Perhaps one of the more surprising contenders is Buzzfeed, the Millennial-friendly media company founded by Jonah Peretti. Since launching eleven years ago, Buzzfeed has raised nearly $450 million from investors that include NBCUniversal (whose stakes now account for about a third of the company), Andreesen Horowitz, and Hearst Ventures.
Does Buzzfeed Have the Audience to Justify Its Price?
Media companies are a notably risky venture. And while some analysts and industry watchers still remain optimistic about Buzzfeed’s IPO prospects, it remains to be seen if the platform can deliver the audience numbers and demographics it needs to keep its advertising business profitable (and its investors happy). But compared to some of its competitors, Buzzfeed is actually in pretty good shape when it comes to delivering a young, engaged audience. Verto Analytics data shows that compared to similar media companies like Vox and Vice, Buzzfeed has the lion’s share of audience attention (among U.S. adults, ages 18 and above), especially among the coveted Millennial age group. During March 2017, consumers ages 18-24 spent more than an hour per month on Buzzfeed, compared to 9 minutes per month on Vox and slightly more than 3 minutes per month on Vice.
And despite the fact that the total amount of time that consumers spend on Buzzfeed has fallen considerably over the past six months (perhaps signaling a decline in audience attention following the U.S. elections), the time spent by younger consumers is slowing rebounding and stabilizing: users under the age of 35 accounted for 83% of the total time spent on Buzzfeed in March 2017 alone. In comparison, Vice has a far more heterogenous audience with a much lower level of engagement (as measured by the amount of time that consumers spend engaged with Vice’s properties), while Vox enjoys a higher rate of audience engagement among users ages 25-34.
Obviously, investors and analysts hope to see a continued upward momentum when it comes to Buzzfeed’s audience engagement (not to mention, their audience numbers). While our data shows a slow upward trend in this area, it’s certainly something to watch for the next three quarters.