Tumblr has signed a deal with analytics firm DataSift in order to provide consumer-engagement info to advertisers for use in placing ads throughout user’s feeds. According to TechCrunch, DataSift is now providing analytics to Tumblr in addition to Twitter, helping both companies turn their large user bases into equally large revenue streams.
While Tumblr is relying on the same research firm as Twitter, their move is more broadly similar to the business plan Instagram revealed last week. When we covered that announcement, we speculated that parent-company Facebook was the driving force behind the targeted advertising, having paid $1 billion for the so-far profitless company. In similar fashion, Yahoo! bought Tumblr last year for $1.1 billion, is now looking to generate a return on that investment. CEO Marissa Mayer has said that on-site advertising would increase significantly in 2014, and this partnership with DataSift is likely the groundwork for just such a push. For advertisers, they’ll be able to tap into data cataloging the 5.5 billion interactions that occur on Tumblr every day.
Of course, as we pointed out with Instagram, whether or not Tumblr’s user base will stick around once ads become increasingly prominent will determine the success of such a strategy. It’s also worth noting the huge volume of tech services that are turning towards targeted advertising as their sole means of revenue, including Twitter, Facebook, Instagram, and now Tumblr. It’s hard to know if there’s a limit on the amount of effective advertising that can be spread across such services, but it with the frequency of these announcements, it seems we’ll out sooner than later.