Nothing says Internet opportunity like a social media juggernaut. Tumblr, the meme-olicious, gif-tastic, photo-fabulous, (but also occasionally) thoughtful blogging platform that attracted 167 million visitors and nearly 18 billion pageviews in December, is certainly no exception.
The site now ranks as the 11th-largest in terms of traffic, according to Quantcast. (That’s down slightly from November, when it broke into the top 10 with 170 million monthly visitors globally.) But with all that activity comes the inevitable question: What's next?
Here’s a look at five areas where Tumblr has moved, and may move more toward, in the year ahead.
Advertising. Tumblr is very much one of the social media startups that was built for scale first, revenue later. And it’s been wildly successful with the former, bringing over 17.8 billion pageviews in December worldwide across its network of 80 million+ blogs.
But in 2012, the company got a little more serious on the latter point and introduced a new revenue stream based around ads – not straight display ads but “sponsor products” that promote Tumblr blogs based on brands or specific events.
Given that the company’s founder and CEO David Karp has made it clear he’s not a big fan of ads, it seems as if this were meant to counterbalance in-stream ads like Twitter’s Promoted Tweets or Facebook’s Sponsored Stories.
Update: a good Forbes profile of Karp, published after I posted this story, points out that the company had revenues of $13 million in 2012 and targets $100 million in sales in 2013, from the sales of these new ads.
Tumblr places the sponsored products out of the stream on actual pages, only suggesting them at a time when users are searching for interesting content promoted through Tumblr’s Spotlight pages and its Explorer or Radar pages of randomized, buzzy images.
An example Spotlight post is below, with a little dollar sign to signify that they’re not editorially selected or organically generated:
Explorer pages organize and filter posts by tag. This means that every tagged post has a chance to show up in front of an audience of millions that might not otherwise see it. An example Tumblr's Explorer or Radar page posts is below:
All fine and well, but earlier today, I got to wondering just how successful these ads are, or how much Tumblr is actually pushing them. Flicking through all of the Tumblr spotlights, I saw a total of six advertisers (seven if you count the two different ads for Standard Hotels). And these were by no means spread across all of Tumblr’s 50+ spotlight categories.
And through many, many refreshes on different pages, I actually never managed to catch a single Radar ad. In short, in-your-face ads these are not. It may be intentional to keep these numbers way down to maximize impact, but considering the amount of traffic Tumblr gets, it seems like even a few more wouldn’t compromise the experience that much. [Update: A Tumblr spokesperson says in regards to the lack of Radar ads that I "didn't see any Radar units this a.m. because we are launching an internal inventory scheduling tool today. If you check out your dashboard tomorrow, you'll see an ad from Texas Chainsaw Massacre 3D."]
Target audience. Branch founder Josh Miller a few days ago published a post about how his teenage sister (10th-grade, Californian hipster, Facebook resister) responds to social media. It included an eye-opening view of how she and her friends saw Tumblr: an aspirational site for middle-school kids who are still gathering material for the collage that they believe defines them — the online equivalent of blue-tacking pictures to your bedroom walls.
That may be news to those of you older than 16 who post on and read others’ Tumblelogs. And indeed, it doesn’t seem to be the full story. Traffic data for Tumblr, again as measured by Quantcast, pegs 25-34 year-olds as Tumblr’s biggest audience, accounting for 29% of traffic. The second-biggest is 18-24 year-olds. accounting for 27% of traffic, and those under 18 accounting for 13% of traffic.
Be that as it may, there are two things here that come to mind.
The first is that hefty dose of NSFW content on Tumblr. It may not be the biggest proportion of users, but 13 percent of Tumblr’s daily audience of 5 .7 million daily visitors still works out to about 741,000 minors visiting the site daily. Apart from older users who simply find the adult content offensive, I wonder how the minor contingent of visitors juxtaposed with adult content sits with would-be advertisers (a juxtaposition we’ve pointed out before). But immoral or not, it could just be a storm in a teacup as far as monetizing is concerned: Union Metrics, which provides Tumblr analytics based on the site’s full firehose of data, claims that in fact the question of adult content doesn’t come up in conversations with advertisers.
Second, if Tumblr doesn’t figure out how better to show itself off and attract older users, the site might end up losing some of those users (and advertisers) to sites like Pinterest or Facebook instead.
Mobile. In the last couple of months Tumblr’s made some significant advances in the area of mobile. It released an update for Android, adding support for tablets; and it released an updated iOS app, including the company’s first support for iPad tablets.
For a platform that prides itself on quick content bursts — just the kind of consumption you associate with users on mobile devices — Tumblr is getting a relatively small part of its overall traffic from mobile: 14 percent globally and 18 percent in the U.S. It’s similarly not tapping Android as well as it could. At the moment, only 32 percent of its mobile traffic comes from Android devices, with iOS accounting for 66 percent. Those new apps, and any more mobile developments Tumblr has planned, could not come a moment sooner to build on that.
Competitors. Tumblr has been described as a more fleet-footed version of WordPress, as well as others that are a part of the new wave of social networks, such as Pinterest. As you can see from the Alexa table below, it looks like Tumblr is very close to Pinterest in terms of traffic while trailing Facebook, Twitter, and WordPress. You can also see how sites like Tumblr and Pinterest are nipping at WordPress’s heels.
It’s tempting to think about how this might play out for Tumblr as a standalone company, or as one that becomes part of a bigger platform, in particular because it feels like it’s yet to really come into its own as a revenue-generating business.
For now, it seems like the price tag on the site continues to rise. In November, PE Hub reported that Tumblr was looking to raise another round of capital at a $1 billion valuation, although Tumblr denied the story. The last time Tumblr raised money from VCs was in September 2011 when it picked up $85 million from a consortium of VCs and Richard Branson. That was reportedly at an $800 million valuation. Tumblr has, to date, raised a total of $125 million in funding.
Transparency. Tumblr has been described as a social network rather than a blogging/WordPress-style competitor, but it marches to a different kind of social beat from the likes of Twitter and Facebook.
As you may already know, you can tap into Facebook and Twitter to find people on Tumblr to follow, but unlike these networks, you cannot see who follows different Tumblr blogs, or even how many followers a person has; and it’s up to Tumblr users to decide whether to reveal who they follow.
But you do get a more public sharing metric in the form of notes detailing who else reblogged or liked a particular post. This is one clear sign of how and where certain content goes viral, but, conversely, it is also a sign of how little mileage a lot of posts get. The long tail is long.
As we enter 2013…
It will be interesting to see whether Tumblr tries to introduce more data on how users interact with each other on its network — and whether that data follows in the form of sites like Twitter and Facebook, or whether it can continue to grow without that extra detail. If the latter is successful, it also throws into question whether metrics like friend counts or follower numbers amount to much in the longer term.
And will Tumblr add more features to snare in more users? The core of Tumblr’s “social” experience is how people consume and share content based on their interests, rather than through a conversation with their social circles. This has been one of Tumblr’s most distinctive traits, but it also leaves a window open for features that the company might also try to introduce or encourage more in the future.
In the last year, visitors and visits to Tumblr were both up, but pageviews remained more or less the same (with fluctuations). I know that traffic can go up and down for any site, but that seems to point to less engagement. That’s something you might expect from a site with a lot of quick hits of content, but also a sign that if sites like Facebook and Twitter are focused on increasing engagement, then Tumblr has a shot at carving out a different kind of business path. And you know how much we all love a little disruption.
COMMENTARY: Tumblr is a microblogging platform and social networking website, owned and operated by Tumblr, Inc. The company was launched in February 2007 by David Karp a 26-year old, high school dropout. The service allows users to post multimedia and other content to a short-form blog. Users can follow other users' blogs, as well as make their blogs private. Much of the website's features are accessed from the "dashboard" interface, where the option to post content and posts of followed blogs appear.
As of March 2, 2013, Tumblr has over 96 million blogs. According to comScore, it scored 13.4 million unique visitors in the United States alone in July 2011—up 218% from July 2010. Its headquarters is located in New York City.
Tumblr Traffic Timeline
- As of July 2010, the site received 25,000 new users each day.
- As of September 2011, the website received more than 13 billion views per month.
- As of March 2013, 71.7 million posts were created on the site each day.
- As of March 2, 2013, Tumblr had over 96.1 million blogs and more than 44.3 billion total posts.
- As of March 12, 2013, Tumblr had 49 million unique monthly visitors (Quantcast)
The service is most popular with the teen and college-aged user segments with half of Tumblr's visitor base being under the age of 25. As of 2009, Tumblr had an 85% user retention rate, compared with 40% for Twitter.
According to internet research firm comScore, Tumblr, Pinterest and Instagram each gained over 10 million new unique visitors between December 2011 and December 2012.
Click Image To Enlarge
Share of Time Spent On Social Networks
According to internet research firm comScore, among leading social network,s Tumblr ranked No 2 with a 5.7% share of total online time spent by users compared to a 83% share for No 1 Facebook.
Share of Time Spent on Social Networking Sites - comScore - December 2012 (Click Image To Enlarge)
In a March 5, 2013 Bloomberg interview, Tumblr VP Derek Gottfrid said the blogging network has already tested the product internally, will roll it out in the first half of 2013, and is currently looking for advertisers who want to sign up. No word yet, however, on exactly how promoted posts will actually be promoted, or what tools bloggers will have to decide who they get promoted to.
The new revenue will, Gottfrid thinks, drive the 162-employee and 100-million-blog company into profitability this year. Which seems to be a likely goal, even if only a fraction of its 16 billion total page views transition over to the ego-driven monetization model.
David Karp the Minimalist
David Karp, the 26-year old high school dropout (Mark Zuckerberg, Facebook CEO and co-founder dropped out of Harvard) is in sharp contrast to CEO's of other successful internet startups when it comes to where they live.
- Mark Zuckerberg‘s and wife Prisclla live in a deluxe but dowdy $6 million mansion in Palo Alto.
- Sean Parker, co-founder of Napster, and the first President of Facebook lives in a Greenwich Village carriage house-cum-party palace.
Karp’s choice says a lot about him–and Tumblr, the blogging platform he founded nearly six years ago. The 1,700-square-foot, $1.6 million loft, located in the hip neighborhood of Williamsburg, Brooklyn, N.Y., which he’s currently remodeling, is quite modest for a 26-year-old whose net worth, on paper, exceeds $200 million. He’s quite possibly the richest person in the neighborhood. But the most telling feature is on the inside, which contains … virtually nothing. A spartan bedroom with a half-empty closet. A living room area with nothing but a sofa and a TV. (One concession to opulence: a restaurant-grade kitchen for his girlfriend, Rachel Eakley, a trained chef.) Karp says.
“I don’t have any books. I don’t have many clothes. I’m always so surprised when people fill their homes up with stuff.”
Marco Arment, Karp’s first and, for a long time, only employee at Tumblr says.
“He owns, like, three items. He’s always looking for ways he can get rid of something.”
Even Karp’s person is spare in the extreme: His one suit, though trimly cut, flaps around his 6-foot-1 frame when he fidgets, which he does a lot. Maybe it’s all the calories he burns this way that keeps him skinny, like a teenager who has yet to fill out his bones. He says.
“I’ve always been 40 pounds underweight.”
For Tumblr’s CEO, minimalism isn’t just an esthetic choice. It’s the key to freedom. When he travels he avoids making plans more than a few days in advance, even on his trips to Japan, and packs only the sveltest of carry-ons. He says.
“It’s my Jason Bourne or James Bond fantasy, wanting to be perfectly mobile.”
One of Tumblr’s directors, Roelof Botha of the Silicon Valley venture firm Sequoia Capital, recalls showing up at a board meeting in New York toting only “the tiniest of duffel bags” for his trip.
“David took one look at me and said, ‘You really brought all that stuff?’”
Karp’s intolerance for the inessential imbues Tumblr. Where others looked at the twin revolutions of blogging and social networking and saw new tools for communication, Karp saw possibilities for making them radically easier and more intuitive. Tumblr lowered the bar to creating a beautiful, dynamic website and raised the payoff in the form of positive social reinforcement.
Tumblr The Minimalist Social Blogging Site
If Facebook is where you check in with your real-life friends and Twitter is how you keep up with current events, the Tumblr experience can be boiled down to people expressing themselves publicly. Like those other two networks, Tumblr is organized in the form of streams of posts. But it’s far more sensory and emotive, a swirl of photographs, songs, inside jokes, animated cartoons and virtual warm fuzzies. On the main Tumblr feed compiled by its editors, a photojournalist’s visual diary of Afghanistan might be followed by a cartoonist’s impressionistic drawings of Darth Vader, which give way to a gallery of hamsters that look like President Obama.
The tools for creating Tumblr's multimedia posts are simple: seven buttons that let you add text, photos, hyperlinks, video, music, dialogues or quotes with a click.
The result: classic hockey-stick growth that’s getting steeper by the month. In November 2012, it shouldered its way into the top ten online destinations, edging out Microsoft’s Bing and drawing nearly 170 million visitors to its galaxy of user-created pages, according to the measurement firm Quantcast. Tumblr’s tens of millions of registered users create 120,000 new blogs every day, for a total of 86 million and counting, which drive some 18 billion page views per month. Its latest funding round, in September 2011, valued Tumblr at $800 million, making Karp’s 25%-plus stake worth more than $200 million. Then its traffic doubled.
Venture Capital Funding
Tumblr's original funding came from Karp's earnings as a software consultant at parenting site UrbanBaby. Tumblr has raised funding from Union Square Ventures, Spark Capital, Sequoia Capital, and angel investors Martin Varsavsky, John Borthwick, Betaworks and Fred Seibert to name a few. Tumblr shares two lead investors with Twitter. President and COO John Maloney was the founder of UrbanBaby with wife Susan Maloney.
According to secondary market broker SharesPost, Tumblr has raised $125.3 million in venture in five separate rounds:
According to Business Insider, Tumblr's $750,000 first round, valued the company at $3 million, and that David sold about 25% of the company.
The company had a $800 million valuation in August 2011. In September 2011, the company raised $85 million in a round of funding led by Greylock Partners and Insight Venture Partners.
In an interview with Nicole Lapin of "Bloomberg West" on September 7, 2012, David Karp, founder and CEO of Tumblr, said the site was monetized by advertising, and he argued that with the high number of users of the service, advertisers would start to look seriously spending money there. Their first advertising launch started in May 2012 after 16 experimental campaigns.
You now something, I am really cheering for David Karp and Tumblr to become successful as hell. In a previous blog post, I discovered that more teens and tweens were using Tumblr more than they were Facebook, so if I were Facebook, I would buy Tumblr while it is still cheap. 168 million users and 49 million unique visitors per month is nothing to sneeze at, and the company plans on making $100 million in revenues (and profitable) in 2013, up from $13 million in 2012. That's impressive.
My biggest concern is whether a 26-year old high school dropout has the chops to run a billion dollar company. Mark Zuckerberg just turned 27, and is a mult-billionaire, but he has surrounded himself with some very smart people. Is David Karp capable of realizing his weaknesses and do the same thing? If I were Karp, I would hire an experienced CEO that can take Tumblr to the next level. Tumblr is going places.
Courtesy of an article dated Jauary 2, 2013 appearing in TechCrunch , an article dated March 4, 2011 appearing The Atlantic, an article dated October 26. 2007 apparing in Business Insider, an article dated March 5. 2013 appearing in VentureBeat, an article January 2, 2013 appearing in Forbes, TechCrunch Company Profile - Tumblr, Wikipedia.org and Tumblr Apps