Tumblr Debuts Beta Launch Auto-Play Video Ads

A week after debuting its new video player, Tumblr on Tuesday announced the beta launch of in-stream auto-play video ads.

Launch partners include Hulu, J.C. Penney, Lexus, Unilever’s Axe brand of products, and Universal. Another launch partner, The CW, is using the new format to promote several series, including “The Flash” and “Jane the Virgin.”

Lee Brown, Global Head of Brand Partnerships at Tumblr, promised that the new format would prove a boon for brands. It means a “massive opportunity to see incredible levels of engagement in our environment,” he said on Tuesday.

Sponsored video posts are supposed to automatically play in-stream on users’ desktop and mobile platforms. The videos loop infinitely until users scroll away, while audio is muted by default.



Video posts are already growing twice as fast as standard picture posts, Tumblr said on Tuesday. That bodes well for the social network’s aggressive monetization goals.

Last week, Yahoo said it expected Tumblr to take in more than $100 million in ad revenue -- and achieve positive EBITDA -- next year. Coming from CEO Marissa Mayer during Yahoo's quarterly earnings call on Tuesday, the disclosure offered a rare glimpse at Tumblr’s financial health.

During the first quarter, Tumblr's monthly mobile active users grew 71% year-over-year, with more than 60% of daily active users accessing the platform on mobile devices, according to Mayer. Tumblr also experienced a 122% rise in mobile engagement year-over-year.

Breaking down Tumblr’s ad business, Mayer said 150 brands now have a presence on the social platform.

In addition, the average sponsor post is re-blogged 10,000 times -- compared to the average user's post, which is re-blogged 14 times -- by Yahoo’s calculation.

“Tumblr's strength is really about the power of [its] distribution network,” Mayer told analysts on Yahoo’s earnings call last week. With regard to the re-blogging figures, she said they “will continue to grow as brands really recognize the unique and unmatched opportunities to engage across the platform.”

Since dropping about $1 billion on Tumblr last year, Yahoo has made a number of efforts to begin monetizing the social network.

This past June, Yahoo announced plans to begin pulling ads from Tumblr directly into the portal’s own properties. The plan was to run Tumblr’s sponsored post ads on Yahoo’s owned-and-operated sites, including Yahoo Finance, Yahoo Beauty and Yahoo Tech. The Tumblr ads are being sold through the Gemini ad marketplace -- Yahoo’s main platform for buying search and native ads.

Then, earlier this month, Yahoo announced the launch of a new content marketing solution built specifically for Tumblr.

To date, some analysts have waxed skeptical about Tumblr’s revenue-generating potential. “Monetization on Tumblr seems mostly elusive … so far,” Brian Wieser, senior analyst at Pivotal Research Group, wrote in a note released earlier this year.

Altogether, Yahoo and Tumblr now see more than 1 billion monthly active users, which is up by about 6% year-over-year, Yahoo said on Tuesday. On a device basis, Yahoo and Tumblr now attract more than 550 million monthly active users on mobile.

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