Yahoo! wants to get in front of 18-34 year olds—and soon it will for the price of $1.1 billion to acquire the popular blogging platform, Tumblr. Yahoo! is counting on this young crowd to increase its traffic, gain “cool” status, and sell digital advertisements. These Millennials are the most coveted demographic for advertisers, especially online as they are spending hours on blogs every week. Will this investment pay off for Yahoo?
Let’s take a look at Tumblr’s performance against the competition.
Tumblr continues to grow with a loyal audience.
Tumblr may have the fewest monthly Unique Visitors (UVs) compared to the other major blogging platforms—Blogspot and WordPress—but Tumblr is the only one that saw an increase in traffic over the past year. Tumblr’s UVs grew 7% year-over-year (YOY), with 23.1 million UVs in May.
What Tumblr’s audience lacks in quantity, it more than makes up for in quality. Visitors to Tumblr stay on the site 3x as long as visitors to Blogspot and WordPress. In May, the average stay on Tumblr was 12 minutes, versus four minutes on the competitor blog platforms. Tumblr’s users are highly active and devoted; this trend has been steady for the past two years. The longer users are on the site, the more ads they are likely to see, including in-stream advertisements–which Tumblr recently launched on its desktop site.
Tumblr has the audience advertisers want.
Tumblr has the youngest audience. 18-34 year olds accounted for 42% of Tumblr’s UVs in May—more than its competition and the general U.S. browsing population.
Tumblr’s best asset—a large, active base of young users—may however, be its biggest liability.
Tumblr’s largest age group is 18-24 year olds and in May, 32.4% of Tumblr’s visitors earned a yearly income of less than $30,000—a higher percentage than its competitors and the U.S. browsing population. Blogspot and WordPress visitors on the other hand receive more traffic from 25-34 year olds, who are older, more settled and have higher incomes.
If Yahoo! was set on purchasing a blog platform, Tumblr was certainly the best choice. If Yahoo! wants to get serious about generating advertising revenue from their new asset, they need to recognize Tumblr’s strengths and weaknesses.
- Most young people on Tumblr don’t have excess money to spend. Advertisers who are selling reasonably priced goods and necessities will be the most successful. Luxury brands will not be welcomed.
- Tumblr users are Tumblr-fanatics, but they are not loyal to Yahoo. They will leave if ads take away from their experience. Advertisers must create content that is interesting and seems natural, such as images and GIFs.
- Similarly, too much irrelevant sponsored content will not go over well with Tumblr users. Tumblr lacks extensive user data to help advertisers to target their audience (unlike Facebook). Tumblr and advertisers must work together to ensure ads get in front of the most appropriate people with the information that is available.
Yahoo! has a huge opportunity to revive its brand and earn back share of the online advertising market–if they do it right. What is your prediction?
Carro is excited to join the Compete team as the Digital Marketing Co-op for Compete.com, with a focus on all things social media. A third-year student at Northeastern University, Carro is pursuing a major in Communication Studies and a minor in Political Science. She has a passion for digital media. Follow her on Twitter @carrohalpin or connect on Google+