scorecardA Former Tumblr Exec Admits The Site Is Struggling To Find Revenue
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A Former Tumblr Exec Admits The Site Is Struggling To Find Revenue

A Former Tumblr Exec Admits The Site Is Struggling To Find Revenue
Tech2 min read

David Karp and Marissa Mayer Tumblr Yahoo Portrait Illustration

Mike Nudelman/Business Insider

David Karp and Marissa Mayer

Ads have been rolling in Tumblr for 10 months now, since Yahoo acquired David Karp's social blogging platform in May 2013. But Yahoo has not once reported any significant revenue attributed to the $1.1 billion deal.

Today, we got a partial answer to that mystery. Tumblr doesn't have the identity information that advertisers say they need to be on the site, The New York Times reports.

That's worrying because at the time the deal was done, Yahoo CEO Marissa Mayer said ads would be driven into Tumblr's dashboard feeds by the Yahoo advertising marketplace. Ads started appearing in June 2013. Mayer again touted the availability of Yahoo's media brands within Yahoo Advertising in January 2014.

And yet...

The company has not once touted revenue from Tumblr. Mayer has, to her credit, repeatedly said that investors need to be patient as her acquisitions improve their products and grow their audiences before they start showing revenue. But still, Tumblr has 48 million unique visitors per month. Why can't it describe the money it's generating from them?

The New York Times interviewed CEO Karp and some of his colleagues. While the company is making progress - it doubled its staff to 220 - advertising on Tumblr is proving to be an "experiment" on an "immature" platform that is a "tricky," "hard sell" to advertisers.

In fact, Mark Coatney, who worked on Tumblr's media and business partnerships before leaving last year, said that Tumblr's inability to provide advertisers with the real-world identities of its users is Tumblr's key failing. On Facebook and Google, advertisers know they are reaching real people who have handed over real info about themselves. (The data is hashed and anonymized before it is offered to advertisers - they don't literally know it's you.) On Tumblr, all you need is an email address to sign in. Tumblr knows little else about its users. Here's what the Times reported Coatney said:

Mark Coatney, who managed Tumblr's media and business partnerships for three years until he left last summer, said marketers still saw Tumblr as an experiment, and a bit more immature than social media sites like Facebook and Pinterest.

"Tumblr doesn't get the same amount of traffic as some other sites, and the ask is bigger," he said in a recent interview, referring to the amount of work a potential brand partner has to do to build out its Tumblr presence, compared with setting up a Twitter or Facebook social media account.

He also said Tumblr could be a hard sell to marketers, who like knowing whom they are directing their ads at. This is tricky on Tumblr, because the service does not require people to give more than an email when they sign up for an account. "Real-world identities are valuable to advertisers," Mr. Coatney said. "Tumblr doesn't have that."