Playbuzz, Once Thought of as BuzzFeed 'Clone,' Raises $15M From Backers Including Disney

Providing Tools for Publishers Rather Than Chasing Consumers

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Examples of content made by publishers using Playbuzz's formats.
Examples of content made by publishers using Playbuzz's formats. Credit: Playbuzz

Since its introduction in 2012, Playbuzz has been called, in media reports, an "Israeli clickbait farm," an "Israeli Quiz Factory," a "BuzzFeed Clone," and "An Israeli BuzzFeed Copycat," among other things. Now that the company has pivoted from being a reader-obsessed publisher to a publisher-focused platform, those early BuzzFeed comparions seem less apt.

But, like BuzzFeed, the company is growing, and has been bankrolled by venture capitalists bullish on its growth potential. On Thursday, Playbuzz announced a new $15 million funding round, led by Saban Ventures and including The Walt Disney Co. Playbuzz previously raised $16 million in early 2015.

Shaul Olmert, the company's chief executive (and the son of former Israeli Prime Minister Ehud Olmert), said he's hoping to not have to raise money again for a while, calling it an "exhausting process."

"Besides," he added, "there comes a time when a company needs to fund itself by making money ..."

On that front, Mr. Olmert said Playbuzz was profitable until pretty recently, but, like other digital media companies, has sacrificed profitability in the name of growth.

"We've grown tremendously in the past year, so we're no longer profitable," he said.

Since the company's Series B funding round in 2015, Playbuzz has implemented a revenue-sharing arrangement in which other publishers host sponsored content made using the Playbuzz template and get a cut of the advertising revenue generated from it. Advertisers only pay when readers actually engage with a piece of sponsored content, he said.

Playbuzz began doing such deals in the fourth quarter of 2015, and Mr. Olmert said "that pretty much everyone is receptive to it." Such distribution deals now account for the "vast majority" of Playbuzz's revenue, he said.

As an example, Mr. Olmert mentioned an American Express campaign, a sponsored quiz ("Where's Your Family's Next Adventure?") that was embedded on the websites of several U.K. publishers.

Mr. Olmert said Playbuzz can do "native at scale," meaning it can enable content-like advertising with broad reach.

Playbuzz now has 100 employees worldwide, with plans to add more talent in product, engineering, and sales. The company, which opened offices in London and Hamburg, Germany, last fall, is now targeting Latin America and Asian for future expansion.

And while Playbuzz might still have a reputation in some digital media circles for gaming social media algorithms to maximize the reach of its own site, traffic to Playbuzz.com is actually quite modest. In February 2016, the company's owned-and-operated site brought in just under 6.8 million U.S. multiplatform unique visitors, down almost 40% from February 2015, according to ComScore. But the company cites a much larger monthly number, 200 million unique visitors, which includes traffic to content created using the Playbuzz platform but hosted on other websites.

"We're not trying to own distribution or control distribution," Mr. Olmert said. "We're trying to let people do whatever they want with a piece of content."

Rather than chasing huge audiences for one website, Mr. Olmert said "the future of media is providing a toolset" to be used by publishers of all shapes and sizes. He's betting that Playbuzz has just the right toolset.

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