Is Yahoo, Tumblr deal the blind leading the blind in mobile advertising?
It is no secret that Yahoo needs some mobile mojo. While yesterday?s $1.1 billion deal for Tumblr comes with a good-ized audience of smartphone and tablet users, the microblogging site?s mobile advertising know-how may be just as thin as Yahoo?s.
Tumblr is significantly smaller than Yahoo but it is quickly growing, especially among the young, mobile users that are attractive to advertisers while Yahoo?s has itself admitted that its own aging audience is an issue. It is Tumblr?s audience that is one of Yahoo?s reasons for wanting Tumblr.
?Tumblr is a site and a platform that has stood the test of time over the last few years as it gets more popular and more usage with a young, vibrant audience,? said Roger Katz, CEO of Friend2Friend, Palo Alto, CA.
?I think they are looking to the magic that Tumblr can help bring to the table ? a younger audience, high mobile engagement and a great mobile app that they just refreshed again today,? he said.
?Just like the overall trends with mobile and social platforms, very soon ? if not now ? the majority of the consumption of these posts will take place on mobile, and Tumblr has a quite capable and in some ways cutting-edge UI for their native mobile apps, both Android and iOS. So they are well set up there.?
Mobile social convergence
Increasingly, online companies recognize the need to have a strong presence in both mobile and social, as evident with Facebook, Twitter and Google.
The Tumblr acquisition is Yahoo?s first big mobile-focused deal after having made a series of smaller acquisitions in the space.
?Yahoo needs to have a seat at the table in order to compete in a world that has become increasingly social and mobile,? said Kamal Kaur, vice president of mobile at RadiumOne, San Francisco.
?Tumblr is just as much of a mobile property as it is a display property,? she said.
?Tumblr's ability to help Yahoo ramp up its mobile story could generate enormous growth for shareholders in an increasingly mobile world. Include the first party data it can transport onto mobile, and you have a great story to sell to brands.?
The right audience
In the United States, Yahoo?s sites collectively have an audience of approximately 191 million while Tumblr has about 29 million unique users.
However, Yahoo has an older audience that is not very engaged with social media or mobile.
Tumblr?s audience is very young, with 45 percent of visitors under the age of 35, according to a recent report from Compete.com.
The microblogging site?s mobile numbers are also attractive. Tumblr?s mobile audience is around 12 million, up from four million a year earlier.
Yahoo?s mobile audience is bigger, but growing more slowly, with 84 million mobile users, up from 63 million a year ago.
?Tumblr is close to Twitter in terms of average monthly unique users and potentially more inclusive in terms of the usage for posting, reading and interacting,? Friend2Friend?s Mr. Katz said.
?It is designed in a way that allows more degree of freedom for user engagement and interaction ? it is a lot more picture based and a lot more video friendly. It is very well suited to entertainment properties and fashion,? he said.
?They are not as strong as Twitter on the strictly mobile side of things.?
Tumblr offers a wide, if somewhat eclectic array of content against which ads could be run.
The site features over 108 million blogs in its network, with the most popular ones dedicated to the game Minecraft, a Portuguese site featuring reaction GIFs and a blog from the linguist who created the languages in ?Game of Thrones.?
Tumblr launched mobile ads in April, with ads from brands such as GE, Warner Bros. and ABC among the first to appear in the app experiences for iOS and Android users. The ads appear as part of a user?s content stream.
The mobile monetization strategy followed last year?s launch of a broader advertising program.
Yahoo introduced mobile-only ads earlier in the spring and they also appear within the content stream of its native mobile app.
?Tumblr has an earned media model for Brands,? RadiumOne?s Ms. Kaur said. ?Brands want more followers and more people to see their content.
?Similar to Facebook Ads driving Likes and Sponsored Posts, if Yahoo were to inject Tumblr into native ads across mobile and display, they can essentially allow brands to pay more money for distribution across its owned assets,? she said.
A fresh appeal
One of the challenges Yahoo will have is merging the two cultures, which are very different, with Yahoo the older, more established company and Tumblr still a fast-moving, up-and-comer.
Already, Yahoo executives have been careful to emphasize that they will be allowing Tumblr to operate independently.
?Yahoo doesn?t want to tarnish the Tumblr brand, which is quite fresh and not overrun with ads. So they are going to need to approach things cautiously,? Friend2Friend?s Mr. Katz said.
?What is going to help Yahoo in this space is getting in on a platform that is hot, that is populated with active users,? he said. ?I think this type of format and interaction really is the Internet going forward ? it is not the old Yahoo page and properties that you land on.
?In some regards, the CEO of Yahoo is using this as a model to rally Yahoo behind and look at how to retool their presence and their offerings.?
Chantal Tode is associate editor on Mobile Marketer, New York