Yahoo’s weekend deal to buy Tumblr for $1.1 billion is seen as a move by CEO Marissa Mayer to capitalize on the growth in mobile advertising, but Mayer is buying a company that is still just learning to monetize mobile users. The popular blog site launched its first mobile-only ads less than a month ago, integrating paid posts into the user streams for its iOS and Android apps.
Advertisers say Tumblr is a good platform for mobile ads that use video. ABC has used the service to promote its programming, and Warner Bros. has promoted movies on Tumblr. Not all Tumblr mobile ads are aimed at consumers, however. GE has used Tumblr to target the community of potential buyers for industrial machinery, showing them videos of the machines at work.
One year ago, the 6-year-old Tumblr started selling ads for the first time, allowing advertisers willing to commit $25,000 or more to sponsor posts in its Radar and Spotlight sections. These ads were not specific to mobile browsers, and were not part of a user’s content stream like its newest ads.
Roughly one of every six dollars spent on digital advertising this year is expected to go to mobile ads, according to eMarketer. eMarketer estimates that the total size of the digital advertising market will reach $42.52 billion, almost two thirds the size of the $66.35 billion TV advertising market.
Yahoo has also introduced mobile-only ads this spring. Like the Tumblr ads, Yahoo’s mobile ads appear within the content stream of its native mobile app.
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