Two Years Into New Ownership, Tumblr Wants to Shake Off Its Underdog Status

In August 2019, Tumblr was acquired by WordPress parent Automattic for a reported $3 million, a huge discount to the $1.1 billion Yahoo bought the company for in 2013. The story went that the blogging platform lost its mid-aughts glory and a chunk of its audience, especially when banning porn on the site in 2018. One headline at the time of Automattic’s acquisition read: “13 things that are worth more than Tumblr’s $3 million price, from an empty lot in San Francisco to a two-bedroom luxury apartment in New York City.” Cavel Khan, Tumblr’s chief revenue officer, has a different story to tell. He says Tumblr’s uniqueness from the other social media platforms—its option for a chronological feed, community of fandoms and canvas-like ethos—is an asset. “Our users come for that difference,” Khan said. Are You Ready to Get Serious About Attention? Khan, who's had roles at Vice, Twitter and Microsoft, is working to convince brands that Tumblr is special, and was hired in part to build the platform’s direct ad-sales business (at Verizon, which acquired Yahoo in 2017, it was bundled with other media properties). He can tout impressive statistics to back this up: 74% of active Tumblr users aren’t on Snapchat and 50% aren’t on TikTok. And though it was founded in 2007, ancient by the standards of the internet, the vaunted Gen Z demographic makes up 48% of active users and 61% of new users. So far the pitch is working. Direct ad sales jumped 230% in the fourth quarter of 2021 from the fourth quarter of 2020, though the company declined to give specific revenue figures, but it's likely from a low base. Request for proposal (RFP) volume in the second half of 2021 was 185% higher than in the first half, and as of this month, RFP for 2022 is projected to be 445% higher than Tumblr's pipeline at this same time in 2021. But there’s still a long way to go. “We’re still nowhere where we want to be. We know we’re an underdog,” Khan said. Turning fan love into brand love Khan says Tumblr’s uniqueness lies in its active, loyal audience which makes it a place for fandoms and creators, particularly artists. “I had a call with a very senior person at an agency [who said] ‘If we want absolute reach, we know where to get that. What we like about what you’re offering is your audience and how different the content is,’ because of this fan love that drives brand love,” Khan said. This can be a particular asset to entertainment brands, an area of focus for Tumblr. The platform found that people spent an average of 44 minutes on 2021’s top 50 entertainment programs, any program that’s built for an entertainment brand which can have ad integrations. For example, Tom Hiddleston, star of Disney+ Marvel Studios TV show Loki, ran a "Tomblr" page where he answered fans' questions in order to promote the series. The program included creative editorial and paid elements, Khan said. Tumblr is not a reach play for marketers. Monthly users have been declining every year since at least 2019, according to eMarketer forecasts. In 2021, the platform had 18.3 million monthly users, which is projected to drop to 17.5 million by 2023. For comparison, eMarketer forecasts Reddit to have more than 2.5 times Tumblr's number of monthly users in 2022. As such, marked social ad budgets have been focused on other platforms, like Facebook, Twitter and Snapchat. Tumblr declined to share their own figures, but did note there were over 11 million posts per day on the platform. "Long-form content is experiencing a resurgence, and if Tumblr can attract enough creators to its service, it's possible that their fans will follow them," Jasmine Enberg, eMarketer senior analyst said, adding that even though it has a dedicated user base, competition in the creator economy is fierce. Avoiding past mistakes Part of what can differentiate Tumblr is offering distinct ad units, said Ana Milicevic, co-founder of strategic consultancy Sparrow Advisors. This is especially important given Tumblr’s past life at Verizon Media, when it was pitched to advertisers along with a disparate group of media properties. “They were trying to sell them as one thing, but it’s like selling pet food with an iguana, shark and a dog," she said. "You can’t buy one food to feed everyone with." Tumblr’s ad units include sponsored posts, sponsored days, an expanded offering called Total Takeover, and access to Tumblr’s Dashboard Radar unit, a featured spot at the top of users’ feeds, reserved for brands working with Tumblr’s creator network, Khan said. Tumblr relies on a mix of programmatic and direct sales. Before the Automattic acquisition, Tumblr didn't have a direct sales team. As well as lower reach, limited targeting, placements, safeguards, and ability to prove ROI made executing campaigns back in 2015 complex, said Raul Tafur, vice president of paid social at Canvas Worldwide. “Wherever we decide to put our dollars, we want to make sure we are putting them somewhere that they’re going to stay for a while and it’s not a phase,” Tafur said. The challenge for Tumblr will be to prove itself worthy beyond experimental budgets. “There is an appetite for continued innovation and invention but there’s a limited amount of time to prove that something is working,” Milicevic said. “It might be hard to get out of that test budget mentality.”