Tumblr goes commercial as Yahoo aims to capitalise on 750,000 Kiwi users

  • August 21, 2015
  • Damien Venuto
Tumblr goes commercial as Yahoo aims to capitalise on 750,000 Kiwi users

When Tim Berners-Lee, the scientist often referred to as the 'Father of the web', accepted his knighthood for his accomplishments, he told the BBC that the "original idea of the web was that it should be a collaborative space where you can communicate through sharing information." It didn't matter who was sharing the information or what they were sharing. For Berners-Lee, the most important thing was that any individual could have a digital voice on the interface. 

When viewed in this context, the story of Tumblr is one of the clearest examples of people being given the opportunity to express themselves as they pleased. Since its launch in 2007, Tumblr has spawned over 248 million blogs that today reach an audience of more than 500 million people worldwide, of which 750,000 are located in the local market. And yesterday, at a launch event in Sydney, Tumblr's parent company Yahoo announced the commercial launch of the platform across Australia and New Zealand.     

Given the rapid and ongoing success of the platform, it was only a matter of time before a major company approached founder David Karp with an acquisition offer. And that eventually culminated in the 2013 purchase of the company by Yahoo for an amount estimated to be around US$1.1 billion.

Yahoo's willingness to fork out that kind of money was largely due to the potential the company saw in monetising the massive audience the platform had accrued since its launch. And according to Karp, Tumblr had already made some headway in terms of generating revenue by the time Yahoo stepped into the picture.

"What we're doing right now is part of the promise of the acquisition," says Karp. "We were on this path already. At the time of the acquisition, we were about a year into our ad business, working with some of the biggest brands in the States. And we knew we weren't quite there yet, but we knew that we wanted to take this thing global. We wanted to start reaching out to our users wherever they were and we wanted to start working with the biggest brands all over the world."

Karp explains that the Yahoo acquisition has in some ways expedited the commercialisation of the site. 

"To get here, we were going to have to build out a whole lot of resources from scratch. Some of that was just building out those teams and infrastructure. Some of that was about building out the relationships that we were going to have to go out and build for the first time. Some of it was also technical – just building out this ad stack that could accomplish what we wanted to. The promise of Yahoo was that we would get to pair up with the tech staff right out the gate ... And we had this fantastic ad platform that [Yahoo chief executive] Marissa [Mayer] had invested heavily in. This was something that we didn't have to build from scratch."

Australia and New Zealand are the first international regions where Tumblr is being commercialised, and Karp says that they will be taking a very similar approach to that which has been used in the US.     

"The focus is really on the main Tumblr experience, and that's the Tumblr dashboard. It's that blue page that people spend hours a day on and it represents about 75 percent of time spent on Tumblr. That's what you get when you open Tumblr. It's the thing that people are hitting refresh on all day long. That's the page where people show up to be surprised with content, and that's where we promote not just brand content but also trending posts and other content."

Yahoo 7 chief executive Ed Harrison, who has over the last year overseen a host of changes at Yahoo, says that the commercialisation of the platform in the local market is about allowing advertisers to tap into the massive audience on Tumblr.

"We're increasing our native footprint across the network, so it really complements what we're doing already," Harrison says. "In terms of practical engagement with the market, we have a small team of brand strategists who will be having conversations with advertisers and with agencies and really helping guide them through that process of understanding how Tumblr can fit into the bigger picture of their marketing strategies."

Commercialising the platform could, however, provoke the ire of some of the contributors to the site, who enjoy the fact that it is largely free of advertising. In the United States, Tumblr has managed to do this without too much outrage from its users, but the local market might respond differently.

To ensure that users aren't frustrated by the commercialisation, Karp says that content creators will still have the same level of freedom they enjoy now.       

"The thing that we've tried very hard not to lose sight of—and it's been our north star from the very beginning—is that fact that everything that Tumblr is today is a credit to this creative community," he says. "It's about the phenomenal people who have showed up and chosen to make Tumblr the home of their amazing work, their art, their creations, their humour, their perspectives or whatever else they chosen to do. And it's the place where they find their audience. Without them, it would be an empty blue page and there wouldn't be anything going on here." 

Thus far, Tumblr has no local partners on this side of the ditch, but WoolworthsTelstraMonash and Studio Canal were last night introduced as founding partners in the Australian market. 

"I imagine that we will have some partners onboard in New Zealand very soon," says Harrison. "Our brand stratgeists will be spending time in market. We have boots on the ground in New Zealand, so you'll see that happening very quickly."

Alongside the Australia launch partners, Yahoo7 will also be launching its own brands on Tumblr this week, with Home & Away, Yahoo7 Entertainment, Dancing with the Stars and 7News Raw showcasing new and exclusive content via dedicated Tumblr profiles.

And Karp is hopeful that creative agencies on this side of the ditch will also be encouraged to build and experiment on the platform. 

"By really catering to the most creative people in the ad industry and getting them to create those ads that win awards and inspire people to live a certain lifestyle ... By giving them space to make those ads, we will get real allies and partners in the industry."

Harrison says that Kiwi agencies will be able to approach the Yahoo team from next week to discuss the various available opportunities.

And OMD managing director Andrew Reinholds says that it will offer an opportunity for local brands to diversify their social media strategies. 

"Globally, Tumblr remains one of the world’s fastest growing social platforms which would indicate that people see real value in it, and the content it connects them with," Reinholds says.  "In this market, I believe Tumblr is generally misunderstood and under-utilised by most agencies, and we do seem to dumb our 'social media' down to one or two platforms based on metrics based on numbers of users."

Zenith OptiMedia group business director Alex Lawson agrees with this point and argues that it might prove challenging to pull Kiwi agencies into the Tumblr space. 

"The challenge that they will have with marketers and agencies will be attracting us to this platform that boasts fewer users in NZ than Instagram and doesn’t have the instant familiarity for users," says Lawson. "What is the clear differentiation of Tumblr vs Instagram? That’s the battle that they have here and what will ultimately win out in a market like ours. Will it work? They have the parent company backing to make it work financially, can it overtake Facebook and Instagram? Maybe? I still remember the day we all thought TV and print would never be overtaken so I’ve stopped thinking that anyone is safe in today’s media world."

Lawson says that while Tumblr is a little late to the party, the "offering they have is pretty nice".

"It’s interesting that the brand is from the outset offering content creation options to brands, much like Facebook’s Creative Shop. We see that the visually orientated social feeds are really the next wave that the younger market is engaging with, the Facebook algorithm prioritising video and imagery and the success of Instagram backs this up."

Lawson says the opportunity to work with content creators on the platform might prove to be one of the major drawcards. 

"One of the most intriguing elements that they have is the Tumblr Creatr offering where a bespoke network of Tumblr selected creative types are available to create branded or unbranded content for you. Sony did a nice example of this sending a couple of US Tumblr creators to Tokyo to shoot the city through their own lens and the lens of the new Sony camera of course. This was insanely expensive from a New Zealand point of view (about US$200-$250k) last time I asked about it but I’ve been told that they are setting up an Australia/New Zealand network, which would be really interesting if the quality is high enough."

Players in the media industry are clearly interested in what they can do on the platform offers, so it will be interesting to see if Tumblr is able to pull some ad spend away from Facebook (and Instagram) over the next few months.  

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