Tumblr Adds In-Stream Ads Online in First Post-Acquisition Bid to Grow Revenue

Move Follows In-stream Mobile Ads Announced Last Month

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A week after Tumblr was acquired by Yahoo for $1.1 billion, the blogging platform has announced that it's cranking up its ad business further.

Tumblr will roll out its first sponsored web posts next month, and they'll be integrated into users' streams, which until now on the desktop version of the site have only been populated with content posted by other users they follow. It's an inevitable move, but one that also seems bound to stir up Tumblr's most devout users, who were already worried about the platform's new corporate parent hurrying to commercialize it.

Denny's sponsored post on Tumblr
Denny's sponsored post on Tumblr

It comes a month after Tumblr introduced mobile in-stream ads. Previously ad formats had inhabited less prominent real estate and were constrained to the "Radar" post on users' dashboads, which alternates between paid promotions and images curated by Tumblr staff, and "spotlight" placements on pages highlighting top Tumblr blogs in categories like sports and architecture.

Tumblr generated $13 million in ad revenue last year, which was before it had any in-stream ads. An executive who got Tumblr's mobile ad pitch said those buys were priced at around $250,000. Tumblr didn't immediately respond to a request for comment on how its web ads will compare in terms of pricing.

It's also anticipated that having Yahoo's sales force at its disposal will help Tumblr's ad business expand quickly. Yahoo has about 2,500 salespeople, compared to Tumblr's pre-acquisition 25, Yahoo CEO Marissa Mayer said during a call last week. She and Tumblr founder David Karp also said that Yahoo would introduce new "native" ad formats to Tumblr, but today's web ads are clearly part of Tumblr's pre-existing roadmap.

The seven advertisers testing the web ads in beta are Viacom, Ford Motor Company, Universal Pictures, Capital One, AT&T, Denny's (whose ad is an animated GIF) and Purina. As with users of Tumblr's iOS and Android apps, desktop users will see up to four sponsored posts per day, and they'll be demarcated with a dollar sign shooting out rays of light.

Tumblr has 93.1 million monthly unique users, per ComScore. According to a Tumblr spokeswoman, more than half of "loyal users" use both the desktop version and native apps.

Contributing: John McDermott