Bloomberg asked Rob Norman, CEO of WPP’s media-buying giant GroupM, what he thought of Tumblr, and Norman replied:
“The acquisition strategy is either not especially clever or too clever for me,” Norman wrote in an e-mail. “I am negative on Tumblr, as I don’t believe it’s truly social.”
That, in a nutshell, is Marissa Mayer’s biggest problem on Tumblr: Getting the world’s biggest ad spenders to understand how Tumblr actually works.
What’s surprising here is that Norman is wrong. And that’s costing Yahoo money. (Yahoo reports its Q2 2013 earnings today — we’ll be covering that live.)
Norman is a smart guy, and we respect the business he’s built at WPP. But his comment was either taken out of context or he fundamentally misunderstands how Tumblr works.
Sure, Tumblr appears to be a bunch of photo and image blogs — and therefore not especially social. But it’s only when you sign up and get your own account that you realise it’s basically like Facebook except with beautiful pictures. The images you post are about creating a way for a bunch of like-minded people to get in touch with you. The real “action” at Tumblr is the dashboard, with its asks, submits and direct messages from followers and fans. It’s very social.
There’s a pattern here: Ad agency holding company CEOs are always about a year too late in understanding how powerful social media can be for advertisers. Consider:
- In 2010, WPP CEO Martin Sorrell said social media was “not a medium that really lends itself to commercial exploitation. … it’s not always failed but often failed.” (A year or so later, WPP doubled its spending inside Facebook.)
- In 2011, Publicis CEO Maurice Levy said he did not use Twitter. “I understand how to wash dishes. I don’t do it regularly,” he said. (This year, his media buying group, Starcom Mediavest Group, committed to hundreds of millions of dollars in spending on Twitter.)
Add Norman to that mix.
Yahoo has said it might build an ad exchange inside Tumblr, or feed social context ads into users’ dashboard news feeds. We asked an executive familiar with the Tumblr ad sales pitch to describe what he thought Yahoo’s plans were. That source told us that although it was unlikely Tumblr would ever return to Yahoo in new ad revenue the $1.1 billion it paid to buy Tumblr, it was more likely that Yahoo could use Tumblr as a sexy, trendy new way to talk to advertisers about all of Yahoo’s media. That might result in maybe $600 million in incremental sales over time, he said.
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