Tumblr's next step: Become a real business

With personnel constraints no longer an issue, the social site can finally try to capitalize on the attention of its massive audience.

An example of a Tumblr ad from a "Hunger Games" blog created by Lionsgate to promote the film. Tumblr

LAS VEGAS--Tumblr sits alongside the Internet elites in terms of audience, but the 5-year-old blogging medium has lagged far behind the likes of Facebook and Twitter in the money-making department. That could all change in 2013 as the social site pushes forward on a more aggressive strategy to get big brands to pay top dollar to reach its highly influential community.

Derek Gottfrid, vice president of product at Tumblr, told CNET that the company has seen a ton on inbound interest on its Tumblr Radar and Spotlight ad units, first launched in limited release in May of last year.

"We didn't have the staff at the time," Gottfrid said. "Now we're building out teams across the country so that we can handle the volume."

When released, Radar and Spotlight ads, which allow advertisers to gain visibility for their Tumblr presence through the service's dashboard or content discovery sections, were only available to hand-picked advertisers with a budget of $25,000 or more, mostly because the company had a team of three people allocated to the program. Today, Tumblr has more sales staff manning the ad helm and a more open-door policy, though packages still start at $25,000.

Tumblr now has the bandwidth to work with any advertiser interested in the platform, Gottfrid said. "We've ramped up really quickly," he said.

To date, Tumblr has run a "couple hundred" campaigns with large brands such as American Apparel, Adidas, and Burberry experimenting with the sponsored messages. Gottfrid insists that Tumblr's units offer advertisers an alternative way to spread their messages. "We're giving brands and marketers the opportunity to tell much bigger stories," he said.

The New York-based company paid particular attention to making a product that they would actually enjoy, he said. "We spent a lot of time thinking about how we wanted to see advertisements. There's not a lot of stuff online that we've enjoyed," Gottfrid said. "Based on those conversations, we built a strategy that we're really committed to and excited about."

That strategy is all about storytelling in a way that is holistic to the Tumblr community. Units are meant to be compelling and on par with high-quality television spots. On Tumblr, advertisers don't have pages -- they have blogs, just like regular users, which means brands must be creators and interesting contributors to the community in order to participate. For this reason, so-called self-service units are off-limits, said Gottfrid, who added that Tumblr is still undecided as to whether it wants to create a self-service component at all.

2013 will also be the year that the blog maker works on making its sponsored messages more visible to members on their mobile phones. Currently, just the Radar units show up on mobile.

Should Tumblr succeed at connecting advertisers to its massive audience -- the service reached a global audience of more than 165.5 million people this month, according to Quantcast -- the blog network could quickly become a force to be reckoned with in more than just the traffic department.

 

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