Buyers Love Tumblr, but Love Scale More

Advertisers will only be patient for so long concerning the firm's restrained approach

Tumblr has a problem: advertisers just can’t get enough of their ads.

It’s a good problem to have, especially considering that Tumblr didn’t even sell proprietary ads until last spring, when it rolled out its Radar and Spotlight units.

Tumblr Radar placement lets brands pay to promote a Tumblr post to users’ dashboards (the Tumblr equivalent of Facebook’s News Feed), while its Spotlight ad unit helps brands promote their own Tumblrs in various categories like “entertainment,” “design” and “funny.”

One challenge for advertisers is that, unlike easy-bake, IAB-approved banners, these two units fall under the buzzy “native ads” umbrella, making them the opposite of commodity inventory.

That’s good and bad. On the one hand, Radar and Spotlight can stand out as unique, socially infused visual ads that look and feel like the rest of Tumblr. But they also can’t be repurposed outside of Tumblr, and they require advertisers to maintain a Tumblr presence. That could leave media buyers wondering if the work involved to reach a sliver of the site’s 26.9 million U.S. unique visitors, per July comScore figures, is worth the effort.

Among the first brands to advertise on Tumblr are ABC and Lacoste, both of which created their first Tumblrs in April. “This provides us with a wonderful opportunity to present interesting content to our fans in an advertising unit that they’re not used to seeing,” said Marla Provencio, CMO of ABC Entertainment Group. “Digital advertising platforms can saturate quickly.”

Meanwhile, Lacoste digital communications manager Constance Smith said that while Tumblr afforded the ability to reach a “nice, fashion-forward, avant-garde” audience, “the limited advertising formats can present a challenge with the platform.”

That’s another challenge for Tumblr—its platform doesn’t offer many options. Digitas svp and social marketing practice director Jordan Bitterman said Tumblr would likely need to have four to six ad products in market next year to tap into the growing demand. However, it’s been well publicized that Tumblr CEO David Karp is no fan of banners.

So what to do? New sales chief Lee Brown, who came over from Groupon last month, said that while he doesn’t plan to begin developing new units during his first 90 days on the job, more ad opportunities are on his to-do list. Still, Tumblr is likely to steer away from generic placements, regardless of pressure from advertisers, since ads on the platform are presented as editorially curated content. “We’re saying, this is great content that’s worth it for [users] to check out,” said Brown. “[Some buyers] just want to buy units for reach and frequency. I’m working through that with them now.”

Brown is also likely to work closely with Tumblr’s product side. He hardly has a choice. “I sit right next to Derek [Gottfrid], who’s our vp of product and was one of the initial architects of Tumblr’s ad products.”

Also on the docket is better metrics. Last week, Tumblr announced Union Metrics as its first analytics partner, helping brands track content, monitor trends and analyze interactions across the site.

It's the interactions with Tumblr ads that has gotten early advertisers exctited about the platform's potential. Take Adidas for example. On days Adidas opted to run ads on Tumblr, the brand saw its rate of reblogs and likes rise from zero to one per day to more than 10,000 a day, though that number has eased post-sponsorship to roughly 100-200 notes daily.

Coke also saw a quick jump in user interacation during the start of a Tumblr campaign: effect Tumblr ads can have, including a 717 percent reblog increase for a single post, from 4,000 reblogs to 32,700.