The blogging site will run sponsored content on parent company Yahoo's owned-and-operated sites. Is it a good monetization strategy?
Tumblr is taking a big step toward boosting its ad revenue. The Yahoo-owned blogging site will promote Tumblr Sponsored Posts across Yahoo's properties, including content streams, article pages, image galleries, and digital magazines.
Visitors to Yahoo's homepage will see Tumblr Sponsored Posts as well. The posts will be clearly labeled as "sponsored," and they will maintain the same native engagement options such as like, reblog, and follow.
The Tumblr ads will be sold by Yahoo Gemini, a marketplace Yahoo introduced in February of this year that allows marketers to purchase both mobile search ads and native advertising inventory. Early advertising partners include Toyota's Lexus, Lionsgate (specifically, The Hunger Games), and Unilever's Lipton.
Since it was acquired by Yahoo in May 2013, Tumblr has been attempting to attract more ad dollars, and prove that Yahoo's $1.1 billion purchase was a good buy.
Earlier this year, Tumblr renamed its Sponsored Posts to Tumblr Sponsored Posts Powered by Yahoo Advertising, and charged advertisers on a cost-per-engagement (CPE) basis. In March, the company unveiled its native in-stream Sponsored Posts on both the Web and mobile.
Today's integration into Yahoo will likely help Tumblr gain momentum among advertisers, as its native ads can now reach a wider audience. In the expanded ad system, Tumblr will keep the same CPE model, so advertisers only pay when consumers engage with (click on, share or like, etc.) the Sponsored Posts.
"If you look at the major social platforms in the market - Facebook, Twitter, and Instagram - each has taken its time to develop an advertising model unique to its platform. Tumblr is taking a similar approach here," says Neal Modi, vice president (VP) of revenue and operations at Kargo, a mobile advertising platform.
"With its full-page brand storyboards, the company is looking at monetization as an opportunity to be interesting, not interruptive, to its audience," he notes.
For Yahoo's part, this move seems to be in line with the Internet giant's native advertising strategy, as Yahoo's chief executive (CEO) Marissa Mayer highlighted the creative side of Tumblr as an incredibly powerful tool for advertisers during her keynote at Cannes Lions on Tuesday.
Tumblr is a resource for young creatives for sure, and the expanded ad system will present more opportunities for Tumblr advertisers. But given that the blogging site did not adopt ads until 2012, will its ad-adverse audience drop off the platform due to the expansive native advertising?
"Tumblr and the brands that use it both have a vested interest in offering something the community will love to find in their feed. When ads on Tumblr are done right, you barely notice they are there," says Luke Carrell, strategy director of We Are Social, a global social media agency.
While he acknowledges that this approach can help brands present their Tumblr content to a highly targeted user base, Carrell points out that running paid content on both Tumblr and Yahoo's owned-and-operated sites will put more pressure on marketers to create really special content.
"Now the content needs to be both Tumblr-friendly and something that will intrigue users on Yahoo," he tells ClickZ. "Ideally, this is an opportunity for brands to use flashy Tumblr content to disrupt the current Yahoo content ecosystem."
"This looks like the Tumblr-ification of Yahoo, rather than the other way around," he adds.
Image via Shutterstock.
Yuyu Chen is a reporter at ClickZ. Her work has appeared in Local East Village, New York Daily News and Brooklyn Chamber of Commerce website. Yuyu received her M.A. in Business and Economic Reporting from New York University in May, 2013.
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