Tumblr CEO David Karp talks monetization, user franchises, and the power of the reblog button

david karp

As the visualization of the Web continues to evolve, all eyes are on one of the network’s that started it all: Tumblr. David Karp, the blogging platform’s CEO and co-founder, took to the stage during an Uncubed panel in New York City yesterday to discuss the company’s future as a content distribution network.

tumblr fiminmytwenties bookIt was apparent that during Karp’s discussion with Reuter’s Felix Salmon, when Karp was drawing comparisons between Tumblr and YouTube, the “blog” was being taken out of social blogging. Tumblr has become a hub for creative users turn to the platform to get their careers off the ground and snag book and film deals. But an economic trend that Karp is seeing now more than ever is that the audiences being built around a Tumblr blog are being leveraged to sell digital goods or to promote a Kickstarter campaign. Look no further than the franchise being built around the Fu*k!I’mInMy20s or the meteoric rise of Kelly Oxford, whose Tumblr has a massive following. 

And the company recognizes that there’s an economic opportunity here that Tumblr can monetize, and it’s something that Karp admits he wants to experiment in — although, for now, he says the company is just focusing on building its audience. He did point out, however, that while Tumblr and YouTube are both content distributors, YouTube’s economic model is proving to be creatively restrictive to its users. Because YouTube is sending a check to its users at the end of every month, YouTube’s monetization structure “shapes the behavior of the community” and normalizes content creation. It motivates content creators to churn out work for the sake of generating revenue on YouTube.

Tumblr, on the other hand, “has different sensibilities,” and intends to keep its platform “open” for its users. Users have room to flex their creative muscles using the platform, whether it’s for making money or for garnering recognition.

“One of the nice things about the economics of Tumblr being wide, wide open, is that we’ve got people who are just in it for the fame, and who are just in it for the fortune. But, that fortune might be from becoming on air talent, or from getting the next big photograph gig,” said Karp. It’s clear that there isn’t just one way to leverage Tumblr and the company is a marketing platform, with some bells and whistles, at heart.

While Karp knows Tumblr has plenty of opportunities to really go after the marketing angle, he still seems wary of totally turning the network into a means of capitalizing on its users’ promotion and content — like YouTube has done with its content creators. Unlike YouTube, Tumblr won’t say “you need X number of views to receive $Y.” At the same time, Tumblr isn’t going to provide its users with a clear-cut strategy to monetize their blogs, so it’s not to say that one strategy is better than the other. 

Tumblr also isn’t just a platform that strictly promotes original content. Karp was fond of Tumblr’s reblog feature, which enables users to republish another’s content onto their own blog with a press of a button (like Twitter’s retweet), and explained that it was a tool that lets users express themselves through the curation of content. The reblog feature also helps distribute content virally throughout Tumblr’s network of users. In fact, Karp revealed, if an original piece of content is published to Tumblr, that content is on average reblogged nine times, appears in four Facebook feeds, and five Twitter feeds. So among the 80 million blogs on Tumblr, only between 10 and 15 percent of the content is deemed “original.” The remainder is reblogged — something you can either interpret as the inspiring power of the Tumblr network or the slow death of original Web content.

When we asked Karp how Tumblr was performing, he told us they were finally able to return calls from the advertisers that were anxious to promote their content on Tumblr. We also asked how Tumblr was monetizing its features like reblogs, and Karp explained that while the company doesn’t generate revenue directly from its features, the platform is able to monetize the audience by selling ads against the resulting traffic. “A big chunk of the traffic represents reblogging, it represents logged in users viewing the dashboard, people who spend hours a day sitting there hitting refresh, it represents views for people who search for something, so in a sense we’re monetizing all the behaviors there.” And Tumblr generates most of its advertising revenue by elevating content from brands on Tumblr Spotlight, which features influencers each week, and Tumblr Radar, essentially an image-based promoted link to a brand’s Tumblr blog. Tumblr also offers individual users the option to Highlight or Pin posts (a feature much like Facebook’s Promoted Posts) for the small fee of $2 and $5 respectively. “It’s doing pretty well,” Karp said about Tumblr Radar.

Karp remarked that things could have gone very differently for Tumblr, and the network could have taken a sharp turn back in 2008. At that time, Tumblr received $4.5 million in Series B funding and which was to be invested into its freemium model, but after a couple of months of conversations Karp was finally convinced by “smarter people” in his team who realized that by releasing features for free instead of going the premium route, Tumblr would end up attracting audiences who were creating the “best creative content in the world.”

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