Tumblr’s Advertising Strategy

Digiday’s Josh Sternberg gets to the bottom of Tumblr’s Ad strategy, one that attempts to deliver value to brands without pissing off Tumblr’s community:

For years, David Karp, Tumblr’s CEO, has professed his disdain for advertising. That’s now changing. But he’s now wagering that Tumblr can essentially opt out of the overall Internet ad system thanks to its size and influence.

Tumblr is betting advertisers will be taken with its impressive reach. According to ComScore, Tumblr had 58 million uniques in March 2012 (more than double what its tally in March 2011). It also boasts a passionate, young user base receptive to a Tumblr-specific ad system that operates outside of the industry’s standard display ad formats.

“The overall thesis of what we’re trying to do is empower and highlight interesting creative advertising,” said Derek Gottfrid, Tumblr’s vp of product. “It’s not meant for the direct-response crowd.”

That’s why it has set a $25,000 minimum for buying placement in “Radar,” the space Tumblr reserves on user dashboards to highlight interesting Tumblr accounts. The bet is this placement can act in a similar fashion as Twitter’s “promoted” ad products.

Tumblr is rolling the dice on being able to opt out of the regular ad system. Advertisers won’t be able to easily marry their Tumblr campaigns with what they’re doing on other sites. Tumblr is also pushing its own set of metrics for success — number of reblogs, replies to posts, likes, number of new followers — in addition to impressions. This typically doesn’t go over well with brands since it makes it harder to evaluate how their campaigns are performing. There’s even grumbling about these problems with Facebook….

Essentially, brands can’t re-use the same IAB compliant ad creative they use to buy ad space on publications such as the NYTimes.com, CNN.com, Vogue.com, ESPN.com, etc. So there’s a cost to producing unique ad creative for a single media platform.

Gottfrid’s argument: digital advertising has made great strides in direct response, but Tumblr believes advertising in social is lacking. Google AdWords hasn’t been a great place for creative. Twitter has momentum but is not a place for creative storytelling. Same with Facebook. Tumblr is trying to tap into the creativeness that thrives on the platform and also let its users interact with brands in a creative way….

Agreed. Online everyone seems to be fixated on direct response rather than building brand awareness.

Packages start at $25,000 and brands that buy in can highlight one of its posts — typically images or text, but all post types (quotes, links, chats, audio and video) are available to be to be included in the Radar — so that users will see, and then hopefully share the content. As of now, there are four members of the ad sales team, and the company hopes to have about a dozen by the end of the year. It is also rolling out self-service tools for smaller marketers.

No ads will run on individual Tumblr pages, just the dashboard.

I think Twitter has a similar buy-in of about $15,000, which brands can then spend to:

- Scale followers (with Promoted Accounts)

- Extend reach (through Promoted Tweets)

- Ramp awareness (through Promoted Trends)

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    Cash rules.
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    Will Tumblr allow us to opt out of their “RADAR” branding? Also, it would be decent if they allowed all Tumblr users...
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