Tumblr helped Yahoo increase its user engagement
Tumblr improved Yahoo’s user engagement
Tumblr’s engagement numbers have been really impressive. Tumblr’s time spend grew from 22 minutes to 28 minutes on Tumblr’s dashboard sessions.
On the earnings call, Yahoo’s CEO, Marissa Mayer, said that Tumblr’s revenue is growing nicely. It anticipates that it will achieve more than $100 million in revenue as well as positive EBITDA (earnings before interest, tax, depreciation, and amortization) in 2015. Today, more than 260 of the world’s top brands not only have a presence on Tumblr, but also have advertising spend on the platform. The number is growing constantly.
Since Tumblr’s acquisition in 2013, Mayer has been under constant pressure to reveal the material revenue growth from Tumblr. With Tumblr, Yahoo (YHOO) can tap into the younger generation and the millennials. Yahoo’s ad platform powers Tumblr’s sponsored posts. This monetizes the micro blogging platform.
The collaboration with Tumblr helped Yahoo to turnaround lagging advertising sales. The acquisition also enabled Tumblr to monetize its blogging content by making it a native-styled ad product. Big brands—like BMW, MINI Cooper, and MasterCard—have been sponsoring the content.
Interested in YHOO? Don't miss the next report.
Receive e-mail alerts for new research on YHOO
User engagement is an important parameter that drives ad pricing
User engagement is an important parameter for Internet companies. It helps drive ad pricing. Tumblr is helping Yahoo increase its user engagement. In its quarterly earnings, Facebook (FB) mentioned that the redesign of right-hand column ads is helping it gain user engagement. As a result, Facebook’s price per ad increased 123% year-over-year, or YoY. Similarly, Twitter’s (TWTR) average advertising revenue per thousand timeline views doubled as it focused on increasing user engagement.
Yahoo has also been trying to increase its user engagement. During the second quarter earnings announcement, Yahoo’s management mentioned that its new email application got a lot of attention from users. Yahoo claimed that it added one minute of time spent per user per day on Apple’s (AAPL) iOS app. Its page views increased 70%—compared to the previous mail app. On the Android platform, the time spent per user increased 65%.
According to a report from comScore, and as the chart above shows, Facebook’s reach on smartphones in the US is 74%. Google (GOOGL) (GOOG) properties—like Google Play, YouTube, and Google Search—are next. Pandora is the fifth app in terms of smartphone reach.