Memo to Mayer: 7 things so you don't screw up Tumblr

3:52 PM, May 21, 2013   |    comments
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USA TODAY - In announcing the $1.1 billion acquisition of Tumblr on Monday, Yahoo CEO Marissa Mayer now famously promised not to "screw up" the hot social media site for Millennials.

That was seen as part promise to Tumblr's innovative staff, which she needs and part promise to Tumblr's fans, who already were loading up the site with their fears and protests. It also was a not-so-veiled reference to Yahoo's pre-Mayer track record of letting acquisitions wither for lack of interest and support (the most relevant example here being Flickr). And it might even have been a warning to her own Yahoo staff.

But the vow also set off a flurry of advice from analysts, experts and shareholders on things she should do to keep her promise. Here are seven highlights:

• No. 1: Go slow. That was the key message from analysts and experts. Like a parent adopting a creative but unruly child, they say the search giant should take time and care in integrating operations and let be, with support, the way Tumblr's compelling blog posts are created and shared -- even if some popular user accounts contain content that is unsavory, amateurish, pornographic or not properly licensed.

"Make sure the integration is just in the back-end and nurture (Tumblr's) independence," says Ryan Jacob, fund manager of Jacob Internet Fund, a Yahoo shareholder, when asked what he would tell Mayer. "Make sure they continue to grow the way they have and be the parent that can provide operational resources that companies like Tumblr needs. I think Yahoo has to be really careful. It'll be a mistake to try to subsume it into Yahoo's bureaucracy."

• No.2: Give Tumblr real autonomy. David Karp, the 26-year-old founder of Tumblr, and his young team should be given the autonomy to run the company from his New York office without interference from the West Coast, Jacob and others say.

Yahoo should counsel Tumblr on selling and delivering ads for buyers, Jacob says, but avoid the temptation to dictate content. "Tumblr has done a terrific job on their own in managing (content)," he says.

Karp, who'll remain CEO, also apparently has been led to expect autonomy. In a message to his team, he wrote that Tumblr "is not turning purple," a reference to Yahoo's logo. "Our headquarters isn't moving. Our team isn't changing. Our road map isn't changing, Tumblr gets better faster. The work ahead of us remains the same."

* No. 3: Identify Tumblr's core audience -- and use it. Yahoo and Tumblr management must study and understand the behavior and preferences of Tumblr's core users, says Jason Schloetzer, a professor at Georgetown University. "Active users will be the initial targets for advertising."

How many there are and what they do are among the initial things to nail down. Yahoo claims there are 300 million unique visitors per month, while comScore reports about 117 million worldwide unique visitors in April. "There's a lot of discrepancy," he says. "And how many of those active users are accessing (inappropriate) content?"

* No. 4. Tread very carefully in introducing ads. Yahoo already is facing an onslaught of online petitions from Tumblr fans who are afraid of ad intrusion as Yahoo tries to "monetize" its acquisition. Tumblr, which relies on user-generated content from professionally produced videos by large organizations like Comedy Central to silly GIF images by teenagers, only started selling ads last year. But in the long run, it's the only way either company makes money.

Brian Wieser, an analyst at Pivotal Research Group, says Mayer has an opportunity -- if done right -- to prod a large base of Tumblr users to produce a volume of premium content for selling ads -- "inventory" in adspeak. But he says he challenge will be to "thread the needle" between holding onto Tumblr's users to create that inventory, while creating innovative ad products that appeal to ad buyers, without turning off the users.

Tumblr's minimalist appearance has always been a selling point for users and a sudden onslaught of randomly placed ads could drive many of them away, says Simon Dumenco, media columnist for Advertising Age. "There are people who will abandon any website that they feel they have personal ownership but has become cluttered with junk," he says, citing MySpace as an example.

"Going slow is the only real way to preserve the purchase. If (Yahoo) is willing to take this financial hit, they're willing to take the financial hit in going slow and not flood it with ads."

No. 5: Create ads specific to Tumblr content.Yahoo's ad strategy should center on ads that are "native" to Tumblr's blog content, with placements that flow with other posts without disrupting the user-experience and make messages relevant to the readers of particular blogs, Schloetzer says.

For example, a car manufacturer could place GIF images of its brand fans converting one of its cars into a racer and place them on blogs followed by racing fans.

"If I can successfully target native ads to this (active user) group, Yahoo can grow a business in which Tumblr provides ad agency support for firms that want to develop Tumblr-appropriate ads for younger users," Schloetzer says. "Yahoo can (offer) Tumblr experience in pushing ads, but Tumblr can use its knowledge of its users to do a better job of crafting that advertising experience."

• No. 6: Create content, not just ads. Dumenco agrees with Wieser that a Yahoo-Tumblr's ad strategy should focus on its "premium" blogs -- the best ones that drive the largest part of the site's traffic and that likely attract viewers who will tolerate well-done promotional messages in exchange for the reliable entertainment or useful information.

Google's YouTube suffered initially from a flood of amateurish home videos only to see its content quality steadily improve over the years, in part through YouTube's investment in original content and support for video producers.

Yahoo-Tumblr should consider a similar strategy in investing in original content, Dumenco says. "A lot of (its) blogs aren't getting traffic," he says. "The trick here is that they have to figure out a way to attract and (make money from) their best bloggers. (Ask them) 'What can we do to work together to make it a co-enterprise?'"

* No. 7: Communicate how this will work. Rather than deliberately distancing itself from Tumblr to try to preserve Tumblr's hip quotient, Mayer should communicate clearly how Yahoo and Tumblr may and may not work together in selling ads, says Renee Miller, founder of integrated advertising and marketing firm Miller Group in Los Angeles.

"There's a big disconnect between Tumblr and Yahoo," she says. "Explain to clients what's in it for them. Give me a reason to buy. At this point, I don't see any benefits."

(Copyright © 2013 USA TODAY)

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