Tumblr users will soon see ads on their blogs in a move to generate revenue
Soon, Tumblr will have a new parent and be expected to help pay more of the bills.
The blogging site, owned by Yahoo (which is in the process of being acquired by Verizon), is introducing a new advertising program that will place ads on each one of its more than 306 million blogs.
The ads will start appearing on Thursday, and Tumblr users must opt out of having the ads displayed. Users won't get a cut of any ads shown on their blogs, although a revenue split will be introduced at some point in the future.
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The news, first spotted by TechCrunch, comes just two days after Verizon secured a $4.8 billion deal to acquire Yahoo's internet business. That deal includes Tumblr, which Yahoo acquired for $1.1 billion in 2013, along with photo-storage site Flickr, Yahoo News and its ad tech systems. Verizon also owns AOL.
Tumblr has been in a rocky state while under the oversight of Yahoo CEO Marissa Mayer. The division failed to meet a $100 million sales goal set in 2014 for 2015. Analysts, including Eric Jackson, managing director of SpringOwl Asset Management, valued Tumblr at $0 as its parent company mulled a sale.
Now with the deal closed, Tumblr is pushing ahead to generate more funds, and its new sister company AOL could provide much needed ad tech as well as an understanding of how to work with online influencers.
"When you think about the alignment of all the AOL assets and their focus on original content, especially on enabling makers and influencers, there’s a natural fit," Tom Edwards, chief digital officer of agency business for marketing company Epsilon, told Mashable.
"I think it's bringing the best of the both worlds from the AOL content perspective."
AOL owns Huffington Post, TechCrunch, MAKERS and other content studios that could be integrated with Tumblr.
"I think it's bringing the best of the both worlds from the AOL content perspective and tying that into streamlining some of the native capabilities with Tumblr," Edwards said.
Drawing advertisers won't be easy. Tumblr faces tough competition for online ad dollars from the likes of Google and Facebook, which still far outrank the rest of the pack. Google claimed 33 percent of U.S. mobile ad revenue while Facebook garnered 19 percent in 2015, according to eMarketer. Twitter and Yahoo both pulled about 3 percent.
With Yahoo and AOL ad tech at its table, Tumblr may start to seem more favorable to once skeptical brands.
"We continue to deliver ad solutions to grow Tumblr’s business and maximize value for our advertisers and community. Featuring Yahoo display and Gemini native ads across the Tumblr blog network is another example of these ongoing efforts," a Tumblr spokesperson said in a statement.
While Tumblr has an engaged community — users spent 13 minutes on average on the mobile site — and many companies, like Snapchat, rely on Tumblr to host their corporate blogs, its overall numbers do not outshine competitors. Facebook boasts 1.65 billion monthly active users while Tumblr claimed to have more than 500 million.
In recent months, Tumblr has been introducing new features in an effort to capture user attention. The site entered the battle of video live-streaming by hosting YouNow and YouTube videos.
Topics Yahoo Advertising
Kerry Flynn is a business reporter for Mashable covering the tech industry. She previously reported on social media companies, mobile apps and startups for International Business Times. She has also written for The Huffington Post, Forbes and Money magazine. Kerry studied environmental science and economics at Harvard College, where she led The Harvard Crimson's metro news and design teams and played mellophone in the Band. When not listening to startup pitches, she runs half-marathons, plays with puppies and pretends to like craft beer.
