This may be Instagram's week, but it has been Tumblr's year. On Wednesday, the social platform announced a partnership with Spotify. A few weeks ago, Tumblr released some staggering numbers: 20 billion posts, 50 million blogs -- many of them from the increasing number of brands and publishers using it as a hub for social-content efforts.
One of the clues to Tumblr's future as a business came with the February launch of "highlighted posts," which let Tumblr users pay $1 to gain more visibility for their work.
In 2010, Tumblr CEO David Karp told the Los Angeles Times that the thought of ads "turns our stomachs." But can it be a business without them? Next week, Mr. Karp will take the stage at Ad Age's Digital Conference to talk about what he sees as the future of brands on the platform.
Ad Age spoke with Mr. Karp to get a preview of that, some upcoming features and his personal favorite Tumblogs.
Ad Age: Tell me about "highlighted posts." Do you think that will become an important revenue stream?
Mr. Karp: This is just the first step of a few user-oriented promotion features. Our attitude toward all this attention on Tumblr, which we could very easily throw a Google Adsense on and be profitable tomorrow -- that's so far down the list, I mean, we're selling our desks to avoid that, it's a complete last resort. But that's known. We have about 4.5 billion impressions a week. There's value in that to advertisers, but it's a lot more interesting to us to think that some chunk of that attention ... can actually be made available to our users as a feature. That's the feature that creators are drawn to today on Tumblr.
Ad Age: Can you give us some numbers? How many people have used it?
Mr. Karp: Not yet, but we'll definitely be talking about those when the rest of the features have filled out. This is the very beginning of what you'll see.
Ad Age: The beginning of what exactly?
Mr. Karp: [Not] a bunch of buttons to pay for things, but we want to offer a set of nuanced creative tools for users on Tumblr. And [highlight posts] was the right starting point. And this is not the first user-oriented promotional paid feature. There are two in production -- the highlight posts and the ability to purchase and sell themes, but before that we had the ability to put your blog's avatar up on the dashboard.
We tested the ability to promote yourself in our directories. That was one of the most successful revenue-generating features, not only in driving traffic to our blogs but in acting as a filter on our network, and it's something we want to get back to very soon.
Ad Age: Are brands using it, too?
Mr. Karp: They are. We designed it without brands in mind, trying to work it in such a way that it makes it clear that this isn't the killer feature for you. We're not expecting Vogue to spend a buck on every one of their posts to make it stand out. In fact, that would make the experience kind of crappy. In fact, one of my favorite use cases is Reuters, when they use it to highlight breaking news.
Ad Age: Should we expect to hear more about that directory coming back?
Mr. Karp: Yeah, but not immediately. And that's something that will absolutely be relevant to brands but is really meant for the users.
Ad Age: The highlighted posts and the directory, if these are aimed at individual users, is that where long-term monetization efforts lie, or will that be from the brands?
Mr. Karp: We see it as a blend of both. There will be places where the features touch each other. It's possible I'll be singing a different tune in three months, but right now my thesis is that we can make these features better for everybody, more useful and friendly to brands who have different considerations than users … to design features that allow that brand to promote themselves and the unique features they do have. And give different tools to the aspiring photographers. I think those features can be different and be optimized for different uses.
AdAge: Not one revenue plan, but many?
Mr. Karp: And that's the question we've been talking about with our investors: Is it better to break things up and optimize? I don't think there's much precedent for it. If you look at Google and Facebook, they're ubiquitous platforms that scale the whole way through. Adwords isn't a particularly useful or creative platform for a band debuting their first album or a photographer trying to get that gig. There's a novel opportunity there, and we want to explore that as much as we want to make it easy for partners to participate in our network.
Ad Age:What do you see as the role of brands on Tumblr?
Mr. Karp: We didn't build Tumblr for brands, and about a year and a half in they just started to show up, particularly in the fashion and publishing communities. They were giving us a different perspective on their world. For the last few years we've really been looking to them and taking notes, trying to figure out what it is that people have found valuable. And when we see things that may be repeatable, going out and implementing those patterns.
Ad Age: Do you work directly with marketers and media companies, or do they come to you?
Mr. Karp: We have had our strategic-outreach team doing that for three and a half years, run by Mark Coatney, formerly of Newsweek. Mark has spent a lot of time talking to these guys to see what's working, and he has dozens of models. He can talk to a poet or the "Today" show and have different tactics for each -- one to five things that can make a big impact in our network.
Ad Age: But these are all organic, right? Not paid?
Mr. Karp: Well, we've run a handful -- about a dozen -- test campaigns, but they've been more about the product cycle than they've been about selling ad inventory. They're varying forms of promotion. Anytime we see an opportunity like that, we have a product. But we've done about a dozen of them to date and applied varying rates and models. Some have been handshake deals and others have had signed contracts. All varying levels that have been some proof of concept and a lot of research.
Ad Age: It's been reported you're looking to hire an executive to head revenue. Are you thinking more along the lines of sales or those strategic partnerships?
Mr. Karp:We've been talking to lots of those types of people over the last couple of years who know how to navigate this world and who have insight to set priorities and expectations for the products we're building. At our heart, we're a product company.
Ad Age: Anyone on the short list?
Mr. Karp: We're not even in the formal finalists. We're trying to meet every brilliant person in this industry for guidance. I'm looking for insight across-the-board. It's not necessarily an OSO person or a 'build a big sales org' person or strategic-partnerships person, or someone who can run a creative-services team. We don't have specific criteria for that today, we're just looking for a partner who can take on a broad set of roles, someone with insight into this industry but also what we'd be encountering in building these products, who's seen this before.
Ad Age:What are your favorite Tumblogs?
Mr. Karp: If you'd asked me a year and a half ago it would have been Kim Jong Il Looking at Things. Today, however, I've also been superimpressed with The Verge. The stuff they're doing on Tumblr is right on. They're really high on my list. There's also From Me to You, by Jamie Beck, who coined the term and medium "Cinemagraphs" for her gorgeous animated .gifs.