Yahoo will try a new way to monetize Tumblr, via the introduction of posts that can be promoted as ad units across Yahoo’s network of owned and operated sites.
While neither Yahoo nor its Tumblr subsidiary confirmed to AdExchanger that this is in the works or when the product is scheduled to debut, the existence of ads designed to promote Tumblr posts is an open secret in the agency community.
"We do know that they are going to be offering the ability to push Tumblr content across Yahoo," said Cindy Stockwell, EVP and chief media officer at Hill Holliday.
Since Yahoo’s $990 million (not $1.1 billion, as many outlets originally reported) acquisition of the social media/blogging platform, many industry watchers have speculated why Yahoo would hook up with Tumblr in the first place. It could be a play for the millennial audience that frequents the platform, or even a way to manage identities in a cookieless environment.
Agencies have responded with cautious optimism. Vik Kathuria, Razorfish’s global chief media officer, said that Yahoo’s ability to leverage its owned and operated network was one of its reasons for purchasing Tumblr in the first place.
“There is an interesting opportunity for marketers to use Tumblr as a creative platform and the immense power of Yahoo’s distribution and scale to target the right users at the right time,” he said. But he was also wary: “(Yahoo) needs to be incredibly sensitive to the user experience, which could be severely impacted with the high-impact ad units.”
The ability to push Tumblr posts across Yahoo's various properties is a good thing, said Doug Chavez, formerly Universal McCann Worldwide’s SVP of emerging media. “I think it's a great idea and is (a) good start to monetizing the platform in a manner that will probably sit well with Tumblr audience,” he said.
But how much audience does Tumblr actually have? This leads to another reason Yahoo might be introducing these ad units: driving Tumblr traffic. Yahoo has avoided answering how many people actively use the blogging platform. In fact, it has sometimes appeared to go out of its way to obfuscate these figures, for instance by requesting Web analytics site Quantcast remove its traffic reports.
In Yahoo’s last quarterly call, company CEO Marissa Mayer lauded Tumblr’s mobile engagement growth, but avoided getting into specifics around actual user numbers. The only concession was CFO Ken Goldman’s admission that Yahoo needed to be more transparent about Tumblr going forward.
Certainly, Yahoo banks heavily that brands will use Tumblr as a messaging platform, especially in an era where content marketing is the latest buzzword. But before brands engage on Tumblr, the audience needs to be there too.
Mayer tried to shine a sunny light on this during Yahoo’s quarterly call when she noted that “the average Tumblr post is reblogged 14 times, the average sponsored Tumblr post is reblogged 10,000 times. Today, 150 of the top 350 brands in the world have a presence on Tumblr.”
But some agencies do not perceive Tumblr as a linchpin in Yahoo's media network. Said Kathuria: “Tumblr isn’t coming through strong in the RFP responses we’re getting back from Yahoo; it’s certainly not a centerpiece.”
It's a sentiment echoed by Horizon Media's SVP of social strategy, Taylor Valentine, who estimated only 3% of his clients use Tumblr. The platform, he said, has the potential to add business value but so far, that potential hasn't been realized.
After all, in order to buy Tumblr-related ad units, one must have a Tumblr page. For Valentine, this limits what Tumblr can be and Yahoo needs to come up with Tumblr-related tools that don't require advertisers to actually have a Tumblr themselves.
"We need solutions that allow us to activate that platform in other ways," Valentine said. "They got in a honeymoon period (and now there are) too many cooks in the kitchen deciding how they are going to monetize the platform, because they're extremely scared of (negatively affecting) user experience."
It's easy to understand why. Anecdotal evidence suggests Tumblr users are resistant to ad units, like sponsored posts. Or at least, those who dislike the units tend to be vocal about it. (Until someone conducts a survey or Yahoo releases official stats, it remains unclear whether Tumblr ad units cause a traffic or user drop-off.)
Tumblr users might be especially wary because the company has flip-flopped on advertising since its inception. Founder David Karp told the Los Angeles Times in 2010, "We're pretty opposed to advertising. It really turns our stomachs." His stomach eventually recovered, as Tumblr introduced promoted posts in 2012, before its acquisition by Yahoo. In 2013, Tumblr expanded promoted posts to the mobile environment.
Since then, Tumblr's Yahoo affiliation has advanced its advertising products. In January, it introduced sponsored posts, "Powered by Yahoo Advertising."
"Now that Yahoo owns them, (Tumblr's) targeting is much more sophisticated than before," said Hill Holliday's Stockwell.
Of course, ad units touting Tumblr posts would seem to avoid problems around Tumblr user acceptance since they'd appear not on the blog platform itself, but on other sites within Yahoo's network.
So perhaps these new Tumblr-centric display units won't cause backlash among its users since they won't necessarily be the ones to see them. Perhaps the post display units can help Yahoo push a platform with questionable traffic figures into a wider world.
Perhaps, in doing so, advertisers will decide en masse that a branded Tumblr page that can be promoted across an expanded network is a worthwhile investment. The question is, who will benefit the most? Consumers, advertisers or Yahoo itself – before it’s obligated to follow through on Goldman’s promise?
Correction 5/9: The original of this article incorrectly identified Doug Chavez as a current employee of Universal McCann Worldwide. He left the company December 2013.