Yahoo! + Tumblr = Great Potential Opportunity for Marketers

With Yahoo!’s recent acquisition of social media network Tumblr, the Internet giant plans to bring its personalization and search infrastructure while promising “…not to screw it up.” Yahoo!’s rich advertising capabilities, platforms and deep targeting data combined with Tumblr’s vast audience reach potentially create a powerhouse for brand marketers.

The Deal

Let’s take a closer look at Tumblr: About one-third of users are 18 to 24 years old (for comparison, this audience segment only comprises 12% of the total Internet), a critical demographic for many brands. It also boasts:

  • 110 million registered users
  • 111.2 million blogs
  • 300 million monthly unique visitors

The Opportunity

If Yahoo!’s top priority continues to be creating great products and content, advertisers will come. Its advertising revenue is pretty impressive, even with an average 10% decline over last year. Q1 display advertising revenue was $455 million and search advertising was $425 million.

Yahoo! will likely ramp up advertising on Tumblr to increase its profitability after it generated just $13 million in 2012. Tumblr can benefit from Yahoo!’s extensive advertising experience and technology, but this is where Yahoo! will need to tread lightly to not scare away current Tumblr users. In a recent TechCrunch interview, Marissa Mayer spoke of “native advertising formats,” and finding ways to enhance the user experience by incorporating ads within content, which could prove similar to the in-stream ads that Yahoo! launched with its new homepage earlier this year. Additionally, Yahoo! may integrate some features of its search platform as well as slowly building up display advertising.

Advertising as a whole has shifted to content marketing and two-way audience engagement — an approach Yahoo! has embraced for its other properties. For opportunities on Tumblr and beyond, marketers would be best served to focus on creating content around the topics and keywords that are aligned with their brands and product offerings.

Expanding content in the form of video, interactive sites, applications and articles will not only serve the savvy marketer well once Yahoo! opens up Tumblr, but will help drive user engagement across the web and other social networks today.