Jonah Peretti: Yes. Thanks, Jason. Great question. It’s obviously something that all the platforms are very focused on. As I said, I think on our previous call, the platforms mostly ramped up short-form vertical video because of the threat of TikTok and we’re more focused about audience share. And now they have all pivoted to really care about revenue, including TikTok. YouTube Is the first to operationalize Shorts and announced that they were providing monetization. The monetization works a bit differently. So instead of a share of pre-roll, it’s a share of the ads that appear between the vertical videos because the monetization obviously is more challenging to put a pre-roll out on short videos. And the rev share is something that the platforms are you used to generate more incentive or sustainable content production.
So, it’s happening as we expected it to happen and the YouTube announcement was very validating of our thesis that the platforms we’re going to start to share revenue like we’ve done with other forms of video. So that is encouraging. The other piece is that are creator initiatives, and we’re seeing a real inflection with our greater programs and creator revenue outpacing other revenues. It plays well in vertical video because one way of creating revenue through vertical video is to how creators make vertical video on behalf of brands, and that’s something that we’ve seen a lot of success with, and where the sales team is getting more versed in selling those kinds of deals that are creators plus vertical video. So, expanding our creator network and platform is another way that we are attacking the monetization of vertical video.
And then I think newer initiatives like AI have potential, in part because AI video is still a little earlier than text and images. But it will really ramp in short term before it ramps a longer-form video, and we’re with particularly things like our animated characters and things like that, being able to use AI to automate that and improve and streamline the process of making that kind of content will also help. But our box franchise on YouTube shorts is one of the star performers for vertical video for us. And so that’s being able to apply AI to our characters is another area where we think there’s exciting opportunities.
Jason Kreyer: Thanks Jonah. And then just the longer-term role of AI for BuzzFeed. I mean it certainly seems like there would be some long-term cost benefits, but just curious if you can lay out what the other benefits are that you see.
Jonah Peretti: Yes. I think one of the benefits that I feel most strongly about this AI is really enabling almost a new medium for contact creation. So, the Infinity quizzes are a nice example of this. It used to be a writer would write a few questions. They would define the logic for how the questions would result produce a result, then they would write maybe eight or 12 different results that the user might get. Now our writer still writes the question, but then they write a prompt and that front defines how the answers should be generated from the user input and then create an infinite number of possible personalized outputs. And when you look at content personalization, and I think historically, content personalization has happened, at the level of curation, where the feed you look at on an Instagram or Facebook or any of the — or TikTok certainly, the feed of content is alrithmically organized for you, but that content itself is not personalized.
And I think this generative AI is enabling the possibility of making more personalized and where the content itself can be more personalized. And so, having a large library of content, having lots of knowledge about the frames and types of topics that audiences are interested in. is going to — and then also having trusted brands that our audience trust in respect to create great content, coupled with AI-powered personalization and AI power content generation. It’s going to be an exciting frontier to make really differentiated content that is more engaging to audiences and more personalized. There also will be some opportunities for more efficiency and for producing content in ways that is more efficient. And I think that there is a lot of focus on that from sort of broader narratives about AI.
But I think if you listen to, for example, Sam at OpenAI talking about the things that are working on best things that are only possible with AI and things that are creating new experiences and new forms of interaction that AI enables, not just doing what you already do a little bit more decently.
Jason Kreyer: Thank you, Jonah.
Operator: The next question comes from Brent Navon with Bank of America. Please go ahead.
Brent Navon: Thanks for taking my question. Just circling back to your 1Q guidance and the broader macro, it just seems like the news just by the day the market is just rapidly changing. And I’m just curious if even the news of the past few days with Silicon Valley Bank is having any disruptive impact on your advertising business? Or any verticals in particular worth calling out? I’m just curious if you’ve seen anything so far.
Felicia DellaFortuna: Thanks, Brent, for the question. You sounded it was super light, but I think I got it I mean, so far, with the events that have occurred in the last 72 hours with Silicon Valley Bank, we have not yet seen any impact in our operations or from our customers. So far, business continues to be as usual. What we have seen in Q1 that yes, you know we have projected guidance with a decline year-over-year. It’s a result of the trends that we saw starting in Q4 and continue to materialize in Q1. There is an impact related to macro, and there is also an impact related to some operational challenges that we have had — and we took some steps to further create a structure that aligns a lot more with what the market requires, aligning industry knowledge and driving the focus on the verticals from an advertising perspective.
Brent Navon: Got it. Okay. So, I mean, did you guys, at least in your guidance, build in any potential cushion if things were something like a shock like we saw the market would slow things down further? Or is it just sort of a continue of trends?
Felicia DellaFortuna: In looking at the historical guidance as well in the current guidance based on our estimates as they stand today and everything that we are aware of in the moment that we think and have seen an impact to our overall revenue profile.
Brent Navon: Got it Okay. And then.
Jonah Peretti: I don’t see the Silicon Valley, bank situation definitely impacted our weekends, but I don’t think it will have a big impact on our business.
